How are people deciding what flat shipping cost to charge customer?

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Excursionist
92 0 8

I am about to dive into the shipping part of setting up my website. One thing I considered is just doing flat shipping pricing across the board of $4.95 or something like that. Does anyone have an opinion of if thats good or bad?
-And would my Shopify account know to charge me the rest?
-And where can I get an estimate of what it actually will cost to ship it?
-Is it worth it to get a label printer?

This whole shipping thing is for some reason more overwhelming than I though. Any advice helps?

Thank yoU!
Marisa

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Shopify Staff
Shopify Staff
60 0 13

Hey Marisa,

Trey here from Shopify!

It might be best to double check with your local post office directly to see what kind of shipping rates they would normally charge you to ship orders out to different areas that you plan on shipping to, to give you a better idea of what you would want to also charge your customers so that you don't take a huge hit on shipping in case it costs more than $4.95 to ship your order out.

In case you plan on using USPS to ship your orders with, it's possible to purchase and print USPS shipping labels directly from your Shopify Admin as well. With this in mind, you could consider creating a test order or 2 within your Admin (Orders > create order) that you can then use to generate some shipping labels and costs which can also give you a better idea of what you may want to charge your customers for shipping as well (You're able to see how much a shipping label is going to cost before you decide to purchase it or not, so you won't need to actually purchase any shipping labels here).

More info on creating orders through your Admin can be found here, and information on setting up and generating Shopify shipping labels can be found here as well.

Regarding the need to purchase a label printer, are you referring to a label printer to print out shipping labels? If so, you don't really "need" to purchase one, as long as you have access to a desktop printer, this can be used to print out your shipping labels as well! You can always start off with printing shipping labels through a normal desktop printer, and then upgrade to a special Zebra printer down the road for instance!

Hope that helps :)

 

Trey S
support@shopify.com

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Excursionist
92 0 8

Oh wow. Thank you. And if I do decide to stick with the flat $4.95 through my Shipping settings, but it actually costs $7.95, does my Shopify account get charged the rest? How does that work?

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Shopify Partner
27 0 25

I do this on my store. The shipping rates across Canada are so variable that it gets confusing for people, and they hate having to fill their cart and only finding out the actual shipping upon checkout.

I would start on the higher end of the spectrum. You can always go down. I've divided Canada in 3 regions: West, East and Territories, each with their own flat rate shipping (and free shipping on orders over $XX).

When you're just starting, go with what you'll think you'll sell most, package it, weigh it, measure it and find out what that package would cost, shipped to several places in your country. Average that price and that's your shipping cost. Then, later, when you have actual user data, grab a spreadsheet, put in all the shipping costs you've made over time and average that number as your shipping rate.

Having average flat rates will cause some loss on some packages and some gains on others.

Hope that helps.

edit: I see you're asking about the difference in shipping. Shopify doesn't charge you for shipping rates. You'll either pay the shipping fee at the post office or through an online portal at the shipping company (like Fedex or UPS). You pay them directly. Shopify has nothing to do with that.

Funky Moose Records / PoppenWorks
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New Member
1 0 1

heres our take - we ship about 2000 pacjkages a month

1 - you need a label printer. Just TRYI taping paper labels to a package - and laser labels are wasteful and expensive. It's worth a label printer, unless you are doing 3 labels a week.

You will be eating costs on shipping based on weight and distance. It makes mroe sense to charge what the USPS charges, and be fair with your customers and let them make the call on what type of shipping (cheap) or fast (exp). Offer free shipping when it economically makes sense. Unless you are doing huge volume, free or flat rate will shut you down in terms of $$$.

Postal costs have gone up a LOT. Make sure you cross check what your costs will be before you go out of business. :)

 

judy

1 Like
Pathfinder
109 0 40

Hi Marisa,

We will periodically do a review of our total shipping charges and simply divide it by the number of orders to get the average cost to ship. 

Most people will see shipping costs as a barrier to buying, which is why many sites either offer free shipping outright or free shipping at a certain threshold. (ie. free shipping with purchase of $49 or more as in our case). Generally, free shipping will substantially increase conversion rates. 

In terms of how much to charge for flat rate shipping, it will depend on a number of things: 

  • Your average cost to ship (as I've mentioned above)
  • The cost of your products - ie. if you have a high priced item, the percentage that shipping adds to the cost will be proportionately lower
  • and, most importantly your MARGINS. ( I have a full article on pricing for healthy margins here >>)

We have been experimenting with different free shipping thresholds with the idea of upselling people to buy more in order to get free shipping. Before you do this, you will have to get a good idea of your margins and what you can afford to give away. Then, when you have enough data, you can also look at your median order value and, if it's too far below your free shipping threshold, consider lowering the threshold. 

Hope this helps!

Jeremy

I co-run www.soyoung.ca and document my experience in building a 7 figure brand at www.indiebrandbuilder.com
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New Member
4 0 0

So I do similar to what's mentioned above - I have my domestic shipping set to local, west, east and territories (because I'm also in Canada and prices vary wildly). I use Canada Post website to get shipping quotes and then get the average cost and that's what I charge. That way if I'm over a little it will balance out with the times when I've under charged. Then for international orders, it's pretty much the same across the board so I've just got a flat rate that I charge. 

I use an app for my shipping labels that also prints packing slips, and I just print my labels on my regular printer right now. I'm looking into getting a label printer but for shopify to have calculated shipping rates at checkout I'd have to upgrade my account which my little business isn't ready for yet. 

 

To to answer your question about under charging - when you purchase a shipping label through shopify via either Shopify or an app it charges directly to the payment option you've set up for billing. It doesn't really "acknowledge" the price the customer paid for shipping, so really what it breaks down to is bookkeeping. When you do your balancing your bank account will show the credits from the shipping you've charged (included with the full payout from Shopify) and then separate debits  for the labels. At least that's the way it works for me, using an app to generate my shipping labels.

 

i hope that helps!

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Shopify Partner
19 0 0

I use shopify to sell t-shirts and it took me a while to price out how everything is shipped. I don't recommend going off what a local USPS prices are because they will be higher than online shipping. Another variable that came up for me was USPS has flat rate padding shipping envelopes. Believe it or not I fit a 3XL hoodie in one of these things. I use EasyPost to ship because it has a built in API and the cost is determined based on what is being shipped on my end. The flat rate envelopes save a lot for me with shipping based on my structure. I do normally make extra profit on shipping because I charge $3.75 for 1 shirt but lighter shirts like a small and medium actually cost around $2.02 but keep in mind the other variables such as shipping labels, printer ink and the polymailer bags (which I use)....not to mention you are hit with credit card fees of 3% so it helps me recover the expenses by charging more and not just what the actual shipping cost is.

Hopefully that's some insight for you.

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New Member
1 0 0

Shopify will charge your customer based on what you have set for shipping rates. When you go to ship the item, you select the best service and enter order details. The amount for shipping is charged to your account and does not effect the amount the customer is charged.

Private label candle manufacturing experts & professional quality candle supplies at wholesale prices
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New Member
4 0 0

I feel your pain Marisa, figuring out shipping has been quite the hassel but let me try and save you some work.

The first thing you should do is download the shippo app from the store (free) and then link a usps, ups, fedex, account etc. to it.  For UPS and Fedex you'll probably have to visit their website to apply for a merchant account.  Also this all assumes you are in the U.S. as shippo doesn't work elsewhere I don't think.

Next you'll want to print out zone maps for your selected shipping services.  I couldn't find one for UPS but you can use this link for USPS: http://apps.endicia.com/apps/zonemap. Just plug in your zip code.  Why do this?  With this map, you can see a. roughly what percent of the country each zone makes up and b. you'll be able to see example cities for each zone which you'll use in your next step. 

Now that you have your shippo account, carrier accounts, and can see a couple big cities in each zone, go into your shippo app, start creating a new shipping label, and plug in your average package size and weight (i.e. most popularly purchased products plus box and packing materials weight). Create a spreadsheet with one city from each zone and look up and add a zip code from that city (just search denver zip code in google for example). Now go in and complete the label creation process but stop before purchasing for each of the zones you ship to (about 7 or 8 if you are just shipping in the states).  Also, don't waste your time finding an entire address in each city, you can get accurate pricing with just the city, state, and zip code. This will give you a good idea of what your average shipping cost to each zone is.  Add some padding for safety and that's probably a good flat rate shipping option TO START WITH.  I'm sure you and I both will need to continually monitor and update our flat rate shipping as orders start to roll in.  As someone mentioned before, play it safe and charge a little more than your calculated avg price.  It's a better customer experience to come down instead of going up.

Finally here's a point I probably should have put at the top and I think will help a lot of people.  Per Shopify's pricing page you have to upgrade to their most expensive plan to get the real time shipping calculator.  In reality, you can add it as a stand alone option for $20 a month OR get it for free by paying for a year or two of Shopify hosting up front (which I believe also comes with a discount).  Just call customer support and they can get you set up. No one should write off real time shipping rates just because they are a smaller store.

The above being said, Shopify's real time shipping is far from perfect.  The biggest issue is that you can only set one standard package which makes it really difficult if you have both small boxes and large boxes to ship.  For example, most of my items are very small and light but I have a painting kit which is a core product that needs a 14x14x4 box. If I didn't get creative, my options would be to set up shopify to use the big box even for a 1 ounce jar of paint or to use a small envelope even for a large painting kit. I think I was able to trick the system into working for me but my solution wouldn't work for everyone.  If anyone is curious I can elaborate on what I did that I hope will work well in practice.

I haven't even started on dimensional weight yet but long story short if you can ship everything with USPS and avoid Fed Ex and UPS entirely that will save you hours of time and frustration. :)

Hope some of this helps, I know setting up shipping was one of the biggest challenges for my store.

- Brent

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