One of the major reasons why customers abandon their carts at checkout is because of high shipping costs. Customers tend to favor options where they get free shipping or drastically reduced shipping rates. However, it’s not always in the best interest of your Shopify store to offer free shipping because it hurts your margins.
The best approach towards calculating shipping rates is by considering all the factors like shipping costs, customer preferences, your resources, average order value, and the goals of your business. The goal is to manage rates in such a way that you and the customer benefit.
Understanding Types of Shipping Rates
When it comes to shipping rates, there is no one-size-that-fits-all option. Offering what type of shipping rates will work the best for your business depends on a variety of factors like your resources, your business goals, and the volume of your sales. We have explained the different types of shipping rates below so that you can have a better understanding of them.
Flat shipping rates
Flat rate shipping is a shipping rate in which you charge the same shipping fees for packages of all weights and sizes. Flat-rate shipping works successfully for Shopify stores that sell products that don’t vary much in weight or size.
However, if your Shopify stores sells products that differ immensely in their weight and size you should consider other shipping options instead of flat rate shipping.
Assign a flat rate to shipping zones
When setting up Shopify shipping you can select different shipping zones based on where you want your products to be delivered. It is quite likely that the destinations in different shipping zones will have a different amount of sales as your customer base may be stronger in a certain region than others.
This difference in sales volume can make it more profitable for you to offer reduced shipping charges in one shipping zone than the other.
Plus, shipping costs for different shipping zones can vary due to a variety of reasons like distance and legal requirements. In any one of these cases, Shopify shipping allows you to easily set-up different rates to a different shipping zone. You can use this feature to make your customer base grow by assigning a low flat rate to a shipping zone where shipping costs are less.
Assign shipping rates based on weight or order price
Shopify shipping lets you add conditions for shipping rates. You can use this feature to charge different shipping fees for shipments that exceed a certain order value in terms of price. Offering low shipping charges for orders that exceed a certain value can encourage the buying behavior of your customers and move them to order more products.
The same distinction can be made between shipping rates based on order weight. Products that weigh more or have more dimensional weight (calculated based on package dimensions including height, length, and width) can incur high shipping costs. Offering a flat rate for products of all weights and sizes can thus be a problem for businesses and might result in sellers being at a loss.
The wiser option will be to have a different rate for products that have low costs and a different one for those having high shipping costs. Shopify allows you to select weight and price ranges to apply a certain shipping rate to.
Free shipping rates
A free shipping promotion is a great advertising tactic that can encourage sales. If you’re only looking to experiment with how free shipping will work out for your business and are afraid to make a long-term commitment, you can create an advertising campaign promoting free shipping that expires on a certain date.
You can also check your customers' response to free shipping by creating a free shipping discount code and giving it only to some selected customers that meet a certain marketing criteria.
When you’re sure that free shipping is the right thing for you based on factors like customers' response, sales volume, and business resources, you can permanently shift to offering free shipping.
Use an order minimum
If it’s not feasible for you to allow free shipping on orders of all values, you can create a free shipping threshold using Shopify. This will enable you to offer free shipping only to the orders that reach a certain value.
For example, you can offer your customers a free shipping service as a reward for spending over $200 dollars on a certain order. In this case, $200 dollars will be your order minimum.
Assigning an order minimum for free shipping can increase your conversion rates and cause the buyers to buy more than they actually intended.
Calculated shipping rates
Shipping carriers that integrate with Shopify include FedEx, Canada Post, DHL, UPS, and USPS. The shipping choices offered by these carriers can differ from each other with regards to shipping zones, package sizes, and other such aspects.
The shipping service offered by one of these carriers may be more suitable for a customer than that offered by some other carrier. Shopify allows you to display the calculated shipping rates of different carriers at checkout and your customer can choose the option that suits him/her the best.
Use the Shopify Shipping calculator
Shopify shipping calculator allows you to calculate shipping charges for DHL and USPS. The use of the shipping calculator is extremely simple. All you need is to fill in some details and the calculated charges for the above-mentioned shipping carriers will be available with a single click.
The information you are required to enter includes package type, package weight, package size, the Shopify shipping plan you are using, the zip codes of shipping destination, and shipping origin.
Add shipping rates from specific carriers
Shopify is integrated with shipping carriers like DHL, FedEx, Canada Post, UPS, and USPS. Different shipping carriers have different shipping policies which cause their rates to vary. Some of these shipping carriers are more suitable for shipping orders with small package sizes and others are more suitable for larger shipments.
Shopify allows you to display the calculated shipping rates of different carriers to your customers so that they can choose the option that works the best for them.
Offering your customers the right shipping rates can go a long way for the growth of your business. The key to knowing what rates will work the best for you is to do a thorough analysis of your business goals, your business resources, and the performance of your business. Taking all these factors into account will allow you to come up with a solution that provides you the best return on investment.