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Volume based shipping (volumetric) takes the dimensions (height, width, depth) into account.
The price for weight based shipping depends on the weight.
In reality, there are only 2 ways shipping carriers do it.
The question what's better is a question of physics, you want to prefer volume based shipping for denser products (a good example would be gold), but as I said in that case they would just switch to weight bsed. Weight based shipping is better for light products (for instance blankets).
Usually your agent will tell you what pricing method is used by the shipping service when you get to the part where you can choose one.
Volume and weight based shipping require different approaches to save money, and dependent on the possibilities the items in your warehouse give you, you can have the agent remove components for weight or volume savings.
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