Something that can often cause a headache for ecommerce retailers is calculating shipping rates.
Running an ecommerce store comes with a whole host of business-critical tasks, and shipping rates can have a major impact on your profits and customer retention levels.
The software provides various shipping features including discounted shipping rates. And with the purchase of logistics start-up Deliverr in July 2022, users can expect more benefits in the future. For now, we’ve put together everything you need to know about Shopify Shipping rates and how you can make the most of them for your ecommerce store.
Shopify Shipping is free to all Shopify users who have a monthly subscription; however, it can only be used by ecommerce stores that are distributing orders from within the US, Canada, or Australia.
The great thing about Shopify Shipping is that it’s integrated into the Shopify platform, meaning you don’t need to rely on installing a third-party app.
The website builder also provides you with real-time shipping rates, ensuring you don’t under- or over-estimate your shipping costs.
You can also use the Shopify Shipping rates calculator to compare the prices of Shopify’s partner carriers (more on those later) for your specific items, allowing you to make an informed decision that will benefit your business.
Whilst you can use your chosen carriers to dictate your shipping rates with Shopify Shipping, you can also set pre-determined shipping rates for every purchase:
Flat Rate Shipping
Flat rate shipping is where you set an exact shipping rate for every order.
For example, if you set a flat rate of $5, every customer will be charged $5 for shipping each order, no matter its size, cost, or delivery time.
You can also set a basic flat rate and a higher flat rate for larger items or international delivery.
The benefit of using a flat rate is that you can predict precisely how much every customer will be paying for shipping and calculate this into your overheads and profit margins. It’s also handy for return customers as they will pay the same price each time.
The downside to flat rate shipping however is that you may over- or under-charge. This can not only cause your profits to take a hit if you under-charge but may lead to customers finding a cheaper alternative if you’ve set your shipping rate too high.
If you’re running to a tight budget or want a simple shipping solution then flat rate shipping is a good option.
General shipping rates are similar to flat rate shipping in that you set an exact amount for shipping; however, here you can provide customers with different options.
For example, you can set a flat rate for next-day delivery, another for standard delivery, and another rate for tracked shipping.
General shipping still gives you the ability to predict how much a customer will be paying for the shipping but it allows you to be more flexible with the shipping options you provide for customers.
When a customer gets to the checkout, they’ll be given the general shipping options and can pick the one that suits them best. This can be beneficial when aiming to provide the very best customer service.
Weight-based shipping allows you to adapt your flat rates depending on the weight of a customer’s order.
For example, you can set shipping rates that are dependent on weight so you may decide to offer $5 shipping for all orders that weigh up to 10kg, whilst any orders over 10kg are charged at $10.
If you set up weight-based shipping, customers will only be presented with the shipping rate that is correct for the weight of their order.
Weight-based shipping is particularly useful if you sell a wide variety of products that differ greatly in weight. For example, a home furniture store probably wouldn’t want to charge a customer buying a blanket the same shipping fee as someone buying a new armchair.
If you opt for weight-based shipping then it’s essential that you have listed the weight of each individual product you sell accurately to ensure that customers aren’t wrongly charged.
Price-based shipping allows you to set your shipping rates based on the price of a customer’s order.
For example, often stores will set price benchmarks that customers have to spend in order to access cheaper or even free delivery rates. Your flat shipping rate may be $5, but if a customer spends over $50 you may offer shipping for $3.99 instead.
Price-based shipping can be a great incentive to try and convince customers to spend more in your ecommerce store, especially if you’ve included a free shipping option.
Often customers who fall just under the price needed will add more to their cart in order to qualify for the discounted shipping rates.
Free shipping is exactly what it sounds like: free shipping for your customers’ orders.
If you want to offer free shipping as standard on all orders then you can simply set your flat rate shipping cost as $0.
Free shipping is an excellent way to convince customers to make a purchase and helps to build up trust and loyalty to your brand – however, you need to ensure that you can afford to offer free shipping. You’ll still have to meet shipping costs with your chosen carrier so it’s essential that you do the math to check it won’t eat up your profits.
Shopify Shipping also allows you to use one of its partner carriers to ship your orders. The carriers that Shopify currently partners with are USPS, DHL, UPS, and Canada Post.
However, as of 7/11/22, Shopify acquired the e-commerce logistics start-up Deliverr for $2.1 billion! The company, based in San Francisco, boasts a logistics network that delivers more than $1 million per month to thousands of merchants across the United States. With this, Shopify hopes to offer a single platform for all their logistics needs and act as a worthy opponent to Amazon Prime by offering next-day and two-day delivery through their service.
There is no news as to when Shopify will roll out Deliverr’s features to its users, so till then, users can still get exclusive access to the aforementioned suppliers.
They can even get discounted rates from these suppliers with real-time rates calculated by the supplier. When a customer is ready to checkout, their basket and delivery details will be sent to the carrier, who will automatically return a shipping rate for that order.
The key benefit of using the carrier-calculated shipping rates is that you’ll be charging the customer the exact cost of shipping their product. So whilst you won’t be making any money, you won’t be losing any either.
Based on the Shopify plan you’re on, you’ll have access to different discounted rates with each supplier. The table below shows the maximum discount offered by each supplier in 2021 for domestic shipping:
|Shipping Carrier||Basic Plan||Shopify Plan||Advanced Plan|
|USPS||Up to 64.5%||Up to 88.5%||Up to 88.5%|
|DHL (International)||Up to 71.5%||Up to 73.9%||Up to 76%|
|UPS||Up to 66.53%||Up to 66.86%||Up to 67.20%|
|Canada Post||Up to 17.7%||Up to 23.5%||Up to 30.5%|
The United States Postal Service (USPS) is ideal for shipping smaller products and is often the cheapest option for small, lightweight packages.
You can purchase USPS shipping labels through Shopify, meaning there’s no need to stand in line at the post office, and it has no minimum shipping requirements.
USPS also allows you to ship internationally and offers order tracking for your customers to keep an eye on the status of their delivery.
DHL specializes in fast, global deliveries, so if you’re planning on extensively shipping internationally it may be the best courier for you.
DHL reaches over 95% of the world’s population and currently ships to over 220 countries and territories. Through Shopify Shipping, you can access DHL customs forms and guaranteed international delivery, usually within three to five days.
UPS offers the fastest delivery of any of the Shopify partner carriers and is, therefore, the best option for time-sensitive deliveries.
Its Next Day Air service offers guaranteed next-day delivery and it also has extensive tracking capabilities, allowing both you and your customers to monitor the shipment.
UPS also allows you to schedule pick-ups from different locations which is great if you have stock stored in multiple places.
Canada Post is Canada’s primary mail carrier service. Canada Post is only available to Shopify retailers who are shipping their products from Canada.
It’s the perfect option for those who are selling domestically within Canada – however, if you’re based in the US then you’ll need to choose an alternative carrier.
Canada Post’s rates differ depending on your location and whilst they do offer international delivery, rates are different for delivery to the US and the rest of the world.
If you opt to use Canada Post it’s important to remember that it doesn’t support envelope packages through Shopify Shipping, only boxes, and soft packages.
If you’ve set up an ecommerce store on Shopify then Shopify Shipping can help to make your life considerably easier.
With different shipping services, carriers and rates you can find the shipping option that’s right for you and your business.
Key things to remember about Shopify Shipping include:
- Shopify Shipping is included in your monthly subscription, you don’t need to pay extra.
- Shopify Shipping gives you access to discounts with their partner carriers.
- Shopify Shipping allows you to set your shipping rate in various ways: flat rate, weight-based, price-based, and general.
Shopify Shipping has partnered with major carriers USPS, UPS, DHL, and Canada Post in order to offer you and your customers a high-quality shipping service that won’t eat up all of your time and profits.
If you decide to use Shopify Shipping for your ecommerce store then be sure to let us know in the comments what you think.
There is no news just yet on exactly how Shopify plans to integrate Deliverr, but users should expect some announcement by the end of the year.