Foundation · 2 min
What you need to know
How should I set shipping rates for my online store?
Start with the actual carrier rates for your most common parcel sizes and destinations. Then decide whether a flat rate, weight-based rate, or real-time carrier quote best matches those real costs. Verify the method against a sample of completed orders, not just the cheapest or most expensive ones.
What is a flat shipping rate?
A flat rate charges the same amount regardless of order weight or destination within a defined zone. It is simple to communicate but only works well when orders are consistently similar in size and weight. If orders vary significantly, a flat rate will over-charge small orders and under-charge heavy ones.
What is weight-based shipping?
Weight-based rates charge according to the packed parcel’s weight, using bands or a formula. The accuracy depends on having correct product weights recorded in the store. Missing or estimated weights produce incorrect rate quotes and unexpected invoices.
What is real-time carrier pricing?
Real-time carrier pricing fetches a live rate from the carrier at checkout using the parcel’s destination, weight and dimensions. It is the most accurate method but requires correct weight and dimension data for every product. If data is missing, the carrier may return no rate, and the customer cannot complete checkout.
What is a calculated shipping rate?
Calculated rates use the carrier’s rate tables or a connected integration to estimate the cost based on order details. They sit between flat rates and fully live quotes: more accurate than flat rates but not dependent on a live API call at every checkout.
How do I decide which shipping rate method to use?
Compare what the different methods would have charged for the last thirty to fifty orders against what the carrier actually invoiced. Choose the method with the smallest average shortfall that you can keep configured correctly. Recheck when product mix or carrier pricing changes.
Foundation · 2 min
Frequently asked questions
Why is my shipping revenue less than my carrier costs?
The rate charged at checkout is lower than the carrier invoice. Common causes are flat rates set too low, missing product weights causing carrier quotes to default to a minimum or not accounting for packaging weight. Audit recent invoices against checkout rates to find the gap.
Should I offer free shipping on some orders?
Free shipping can increase conversion but must be funded either by the order margin or a threshold that ensures the order value covers the carrier cost. Calculate the average order value where the margin covers your typical shipping cost before setting a threshold.