Shipping Rate Strategies for Your Online Store

 

Shipping Rate Strategies 

Do you want to offer free shipping? A flat rate? A variable rate? Or even combination of these? Which one should you choose? The answer depends on two components: Your margins and your customers experience. Here are four different shipping rate strategies for you to consider: 

1. Free Shipping

This reassures your customers that they won’t be charge excessively for shipping at checkout. It’s also very easy for you to setup in Shopify. This strategy works great if your store has a limited number of products that only you sell, and where shipping cost is no more than 20% of the product price. 

2. Flat Rate Shipping

Flat rate shipping shares the same advantages of a free shipping strategy. Customers know exactly what they will be charged and it’s also easy for you to setup.

Consider this approach if all your products have similar shipping costs, like for a t-shirt store. In the United States, USPS now offers “Priority Mail Flat Rates”, one standard rate for whatever fits in their boxes. If you can take advantage of this, you should consider flat rate shipping.

3. Variable Rate Shipping

Variable rate shipping charges your customers a different rate based on what they purchased. This method is commonly used and favored by retailers as it gives you more control on how much to charge based on your customers order.

If you sell many products with variable weight and dimensions or/and customers buy more than one at the time, you should favor a variable rate strategy. In other words, your shipping cost varies a lot order to order.

4. A Combination of These Strategies

A lot of online store owners choose to use a combination of all the above shipping methods. For example:
  • Free shipping for orders over $75 and everything $10 shipping flat rate.
  • Free shipping for orders over $100 and a variable rate for anything under.
  • $10 shipping for orders over $100 and a variable rate for anything under.

This a great way to offer special promotions and increase your average order by encouraging customers to spend more to save on shipping.

Here are instructions on how to set your shipping rates

Quick Advice About Shipping

  • To estimate your shipping cost use carrier calculators such as USPS's.
  • Make it easy for customers to understand your shipping fees by stating them on your website. Include the destinations you ship to.
  • Be careful using carrier calculators for packages that aren’t standard dimension. Visit your local carrier’s office for an accurate rate.
  • Charging the exact rate is tricky. You will win on some orders and lose on others. Over estimate by 10% and continuously adjust, adjust and adjust.

 

27 comments

  • Gina
    Gina
    February 19 2013, 05:47PM

    Will Shopify ever implement shipping profiles. Some of my items can only be shipped to the U.S. and Canada.

  • mishael
    mishael
    April 06 2013, 07:36AM

    We are thinking of moving our online store to Shopify as we believe your shipping support may be better for your product.
    Our carton sizes are all the same although clients will most likely order between 1 and 5 before it will be cheaper to have them delivered on a pallet. Can we do this through your customised shipping page?
    Do you use Australian based shipping companies such as Australia Post.
    All our sales are within Australia and mostly to country areas.
    Our cartons weigh 8kg however dimensions are 37×47×29 which I think equates to 22kg package
    Looking forward to hearing from you
    Mishael

  • Kyra
    Kyra
    April 17 2013, 05:10PM

    AGREE WITH GINA!!! Man on man when are we going to have the ability to apply shipping profiles to specific products or collections.!! that would be a massive improvement to shopify.

  • Keith R. Brown
    Keith R. Brown
    April 21 2013, 06:32PM

    Here’s a workaround I use, if you are fed up of being shut out of auctions because the eBay seller does not ship to your country. The same goes for online retailers who refuse to ship to your destination.

    When you sign up with BPM, you get local shipping addresses in 6 countries.
    Drop points include: USA, UK, Germany, France, Belgium and Luxembourg. You then use these for buying from whom you want, regardless of where the seller ships or not.

    You then have all your purchases combined into one, even from the different countries, and use the parcel mail forwarding service to have everything sent home in only one shipment, wherever you are in the world!

    Membership for renting these addresses and using the service is only 5€ per month.
    You can check it out on http://www.bpm-lux.com

  • Xabi
    Xabi
    June 08 2013, 02:08AM

    Ok. So, If I’ve 10 suppliers that distribute to my different customers from different locations around the world, how could I do to offer them a real shipping rate? Is there a solution?

  • Tiago
    Tiago
    September 21 2013, 11:21AM

    Here is my solution to manage the rates. I have different suppliers for diverse products, so for each supplier I have a specific shipping rate based on weight, example:

    Supplier X: 0kg to 1kg; 1,1kg to 2kg…

    Supplier Y: 100kg to 101kg; 101,1kg to 102kg..

    Supplier W: 200kg to 201kg; 201,1kg to 202kg..

    This is a good solution if you have light weight products.

  • Grant Ovenden
    Grant Ovenden
    December 11 2013, 04:15PM

    This is really good general info, but here in New Zealand (and I’m sure this applies around the world) we have to pay considerably more to ship to RURAL addresses.
    Currently I’m loosing a small fortune off my bottom line as I cannot identify this at the Time of Check-out and legally I cannot make a one-off charge after the fact either to recover.
    Does ANYONE know of a Shopify App that can collect/handle the shipping info better and recover these extra charges please?

  • Dave
    Dave
    February 10 2014, 12:58AM

    I like just about everything about shopify, except when it comes to shipping. For any real online seller where shipping is an important part of their business (not someone shipping extremely light or digital goods)the ability to customize your shipping rates is essential. Shopify’s approach to shipping is pitiful. Shopify recommends first and foremost free shipping… If you don’t want to use this model, you either assign some junk catch all rate with a ridiculous range for example 1 to 20 pounds or make a general flat rate. The only other alternative is to pay $179 a month for real time rates, a feature offered free from Volusion or Big Commerce on their base plans. Sadly ancient ecommerce platforms like Yahoo have more shipping customization than this. Gotcha sales?

  • Janine
    Janine
    February 26 2014, 06:56PM

    I’m with Dave – i like just about everything about shopify except for the shipping. My online store is based in Melbourne Australia and I need to ship everything from furniture to concrete statues to very lightweight items. As in NZ, our shipping rates vary enormously for rural areas so this is a hurdle we need assistance with.
    I am very concerned i am not getting sales purely because of my pathetic shipping function. Can anyone suggest a solution please? Oh, from what i can glean, even if i paid the $179 for real time rates, that only applies if you live in the US and countries near the US.
    I am about to open a new store and don’t know whether to use shopify or to go with someone else.
    ANY SUGGESTIONS WOULD BE GREATLY APPRECIATED.

  • Helen
    Helen
    March 07 2014, 01:25AM

    Having the same problem as Grant and Janine! We would like for our customers to use real time calculator for shipping our irregular size and weight products and feel we are losing sales due to not providing this. It seems people do not want to fill contact forms out for a quote these days. Is there a way we can improve this issue?

  • Lori Pearl
    Lori Pearl
    March 12 2014, 02:31PM

    We setup our Shopify site a few months ago, and so far, we love everything but the shipping. We sell lots of different products with various weights and prices – neither option of setting rates by weight or price seem like good options. I had planned to use the real-time shipping with USPS, but the price is way too high! Now I may look for another solution.

  • Tracy Hughes
    Tracy Hughes
    May 19 2014, 09:45PM

    The extra $100 per month for real time carrier calculations is really high. We only use UPS, and only ship to North America. Simple needs. Why aren’t there any Shopify Apps that provide an interface with carrier calculators?

  • Janet White
    Janet White
    July 01 2014, 04:52PM

    I agree! I am re-launching my website from a Wordpress site to Shopify and am disappointed in the shipping options. I was able to set up each item or category of items with its own shipping fee. Also, I would love to see the weight option in oz and lbs. I use USPS and the rate changes at 13 oz. My customers often buy in multiples so it could get pricey if the weight of a single item is 3 oz and they are charged a 1 lb price for each one.
    Are there any changes to this being planned? We would like to hear a that a solution is being worked on.

  • Tom
    Tom
    July 16 2014, 02:28PM

    Janet, Janine, Dave – have you come up with any alternatives, or found any apps that address the shipping issue?

  • Helana
    Helana
    July 30 2014, 02:23AM

    I am about to launch my site next week and am really disappointed with the shipping options available, and the upgrade is way too expensive.

    Could someone from the Shopify team please get back to some of these comments in terms of what the future is for the shipping options on the site.
    It would be greatly appreciated.

  • Nicole
    Nicole
    August 06 2014, 02:14PM

    I agree with all of the above. The only reason I haven’t yet committed to Shopify for my E-Commerce needs is the fact that is way too expensive for real time shipping in comparison to many other popular sites.

    If anyone has a solution to this problem I’d love to hear it.

  • Andrew
    Andrew
    August 19 2014, 07:44PM

    I agree with other posts about the shortcomings of Shopify’s shipping setup.

    I’d really like to find a way to offer a flat rate shipping to only one product for a promo (free product w only $x shipping) while keeping all of my other products at real time carrier rates. Its seems you have to choose one or the other.

    Does anyone here or from the Shopify team know of any apps that allow you to set flat rates for shipping to individual products while keep all the rest at real time carrier rates?

  • Cherie
    Cherie
    September 21 2014, 02:23PM

    I want to echo what has been said by previous posters. I have been thinking of moving my existing store to Shopify. I signed up for the free trial and love everything about it except the shipping. Why do I have to pay $179/month for something Bigcommerce provides on their basic plan. Shopify needs to address this issue!

  • Kenny
    Kenny
    September 22 2014, 03:49PM

    If 0.1kg = £1
    Say you have an item that you want £6 p&p
    then you set its weight at 0.6kg
    Yes, you will need to add a lot of shipping rates – i.e 0.0 to 0.09 = £1 0.1 to 0.19 = £2.00,… but in my book until shopify sort this, its an ok solution no?

  • Geoff
    Geoff
    October 03 2014, 11:03PM

    Shopify: your refusal to allow real-time carrier shipping rates on even your mid-level plan ($79/month) is a deal breaker for me. The $179/month premium package prices out a ton of small business owners.

    We were on a custom platform before and I’ve been wanting something with more features but I’ll be going with Volusion ONLY because of shipping rate thing that you don’t offer and Volusion does. I suspect many other people feel the same way. If you changed just this one thing about your $79/month plan, I think you’d have an amazing package to offer. An honestly, how much can it cost to look up a shipping rate on a public USPS database based on weight/location??

    Adios for now, I hope we can work together sometime in the future though!

  • Marcelo
    Marcelo
    October 07 2014, 02:13PM

    we are a new shop with Shopify. Will will be shipping glass bottles of oil and vinegar only in the US. I am concerned because don’t know how or what to charge yet, but I thought about the following:giving two different flat rates, one for orders under $50 (7.99) and the other for orders over $50
    (10.00)
    Would that make sense? our margins are good.

  • Carol
    Carol
    October 14 2014, 11:03PM

    Hi Everyone, I am in desperate need of direction.

    I am setting up an online retail store selling internationally, focusing primarily in Korea.

    What do you recommend as far as shipping? Do I bulk ship items to Korea? Is there an affordable and reliable company anyone can recommend?

    Or would you use some type of parcel forwarding?

    Any thoughts, recommendations?

    thx

  • Rick
    Rick
    October 15 2014, 07:04PM

    For anybody needing Real Time Carrier Shipping on the cheaper Shopify plans, you can add it for $20/month by emailing customer service.

  • Lancej
    Lancej
    November 10 2014, 08:02PM

    U nerds have not one word of profanity between you all…" Material lends thy way to the five sense " Lancej fbook

  • Dan
    Dan
    November 12 2014, 10:27PM

    I have been reading reviews of shopify (currently with bigcommerce) and the shipping calculator seems like a no-brainer – it’s basically the only reason I haven’t switched – I use shipstation with bigcommerce and shipping is always dead on… if you add an add-on like shipstation to your shopify account, does it provide the real-time stats? I don’t think it will help the shopify calculate since typically it’s a one way relationship (e.g. orders in shopify are exported to shipstation and shipstation has no way to pass shipping data back to shopify…. ugh.

  • TS
    TS
    December 10 2014, 09:13PM

    I would also love for shopify to comment on this. I am new to shopify and am about to make my site live. The shipping is the last piece and I haven’t figured it out yet. I am a small shop and would love to have the real-time carrier option available to me. Are there no apps that offer this?

  • Dee
    Dee
    December 15 2014, 01:58AM

    Informative post, that! The mad holiday retail and shipping rush is here. I am looking to pick up a couple of tips here and there. And I have also signed up for a webinar on this. Check it out if you are also interested in shipping cost optimization- ShipTalk @ http://blog.lateshipment.com/post/105000081010/shiptalk

Leave a comment ...