Flat Rate Shipping: How To Increase Sales, Prices and Speed

Whether you’ve just launched your business or have been in the game for years, figuring out shipping can be one of the biggest headaches. There’s no one-size-fits-all shipping strategy, but a flat rate can be a game-changer when offering a better checkout experience and encouraging repeat business. 

Customers today are looking for fast, affordable shipping options that manage their expectations and provide flexibility. That’s where flat rates come in. By offering predictable, transparent shipping costs, you can give your customers the confidence they need to hit the Buy button.

From managing early price expectations, communicating delivery speeds, and offering affordable pricing based on cart totals, flat shipping rates can help you increase sales while balancing your costs. Here’s how to offer it through your ecommerce website. 

What is flat-rate shipping?

Flat shipping rates are predetermined shipping amounts you charge a customer based on their order. You can offer general flat-rate shipping that remains the same regardless of what you’re shipping, or conditional flat rates based on factors like product weight or order price. For instance, you might charge $10 for domestic orders, $15 for international orders, and $5 for all orders over $100. 

Benefits of flat-rate shipping

Manage customer expectations

One of the main reasons flat-rate shipping is appealing to customers is it manages expectations and provides transparency. With flat rates, you can tell customers exactly how much you charge for shipping before they even reach the checkout step.

A recent study found unexpected additional costs at checkout were the number one reason for cart abandonment. But by communicating your flat rate shipping costs upfront, either through an announcement bar or on your shipping policy page, you can minimize surprises and build customer trust. This transparency can significantly reduce the likelihood of customers abandoning their carts due to unexpected shipping fees.

Increase average order value

Price-based rates can motivate customers to add more products to their cart to qualify for cheaper shipping options. While this means you’ll absorb more of the shipping cost, it can be a smart move if it increases cart totals. 

Consider offering free shipping on orders over a particular total to incentivize customers to add extra products to their cart, boosting your average order value. It’s a win-win: Customers feel like they’re getting a deal, and you’ll see a boost in sales.

Lower packaging costs

Shipping carriers like USPS, FedEx, and UPS offer flat-rate shipping boxes with set rates for delivering items contained within them. This is often cheaper than buying your boxes and getting a custom shipping quote.

This can be especially beneficial for businesses that ship a high volume of products or sell items that fit well into standard flat-rate box sizes. Plus, carrier-provided packaging can help ensure that your products are adequately protected during transit, minimizing the risk of damage and reducing the need for costly returns or replacements. It’s a simple way to save money and keep your customers happy.

How much to charge for flat-rate shipping

Estimating your average shipping cost is the best way to determine how much to charge. You’ll need to know the maximum weight and dimensions of your products and packages. 

Use an online shipping calculator to get estimates and calculate the average cost. Your flat rate should ideally be a round number, making it easy for customers to understand and remember your shipping costs. For example, if your average flat-rate fee for domestic shipping is $11.72, round that up to $12. 

Rely on flat-rate box prices from shipping carriers

Most shipping carriers charge set rates to deliver boxes of a specific size. For this option, you’ll have to forgo any branded or custom-size boxes, but shipping tends to be more cost-effective. You can pass those savings on to your customers.

Here’s a breakdown of shipping rates amongst the top three carriers based on the smallest flat-rate box size as of publication of this article:

Keep in mind that flat-rate envelopes tend to be cheaper. While they offer less protection than boxes, they’re a better option if you’re shipping low-value or small items that can fit inside an envelope. This can help you keep your shipping costs down and offer more competitive rates to your customers.

Use weight and price conditions

Weight-based rates let you charge a specific amount for shipping based on the total weight of all the products in your customer’s cart. For example, let’s say you wanted to charge different rates for orders below and over five pounds. Using weight-based rates, you could set a flat shipping rate of $7 for orders under five pounds and a flat shipping rate of $15 for orders over five pounds. 

Using the example above, a customer with a cart that weighs seven pounds combined would have only the $15 shipping option appear at checkout. This option is helpful if you’re shipping heavier products and want to avoid absorbing the higher costs of shipping bulkier packages like furniture. 

With price-based rates, you can charge a specific amount for shipping based on your customer’s total cart value. For example, let’s say you wanted to charge different rates for orders below and over $50. Using priced-based rates, you could set a flat shipping rate of $4 for orders under $50 and a flat shipping rate of $10 for orders over $50. This approach can encourage customers to add more items to their cart to qualify for the lower shipping rate, boosting your average order value.

Offering free shipping

When it comes to increasing sales, free shipping is a powerful tool. Shippo’s State of Shipping report found that 62% of shoppers won’t buy from a retailer if it doesn’t offer free shipping. But while free shipping can increase sales, someone’s got to pay for it—usually your business. 

Luckily, there’s a more manageable way to offer free shipping: making it available over a specific cart total. Offering this kind of incentive, like free shipping over $50, can help you balance out your shipping costs and increase your average cart total while still providing an attractive delivery option for your customers at checkout. 

How to set up flat-rate shipping

If you’ve decided that flat rates are the best way to charge for shipping, here’s the easiest way to set them up:

1. Measure your product sizes.
2. Choose a shipping carrier.
3. Order samples of the carrier’s flat-rate boxes.
4. Determine how many products can fit inside each flat-rate box.
5. Choose the flat-rate shipping cost for each parcel size. 
6. Save this parcel information in your ecommerce platform.

These steps ensure your flat-rate shipping options are set up correctly and ready to go. By streamlining your shipping process you reduce customer confusion, and ultimately, drive more sales for your business.

Best practices for flat-rate shipping

Consider product margins

While you want to offer customers a good checkout experience, you must also consider the cost of shipping orders. Your shipping strategy should cover both aspects to increase sales without cutting into your bottom line. 

Once you’ve calculated how much it costs to ship a product based on size, weight, or volume, set the average as your general flat rate. This means that, depending on the order, you might make a little money on shipping or lose a little money. The goal is for everything to balance out so shipping costs don’t eat into your profits. It’s all about finding that sweet spot that keeps your customers happy and your business thriving.

Record product weights and box sizes accurately

Most flat rates are based on product size and weight, so it makes sense to measure each product and enter the data into your ecommerce platform for automatic calculations. 

Shopify, for example, has a weight section in each product listing. Use a weighing scale to weigh your product in pounds, ounces, grams, or kilograms. Whenever a customer adds an item to their shopping cart, Shopify will pull these product weights and use your rules to calculate the flat-rate shipping cost. This ensures you’re always charging the right amount for shipping without manual calculations or guesswork.

It also helps to measure the boxes you’re using to ship products. You likely have a selection of box sizes depending on which product a customer has ordered or how many items they’ve purchased. Shopify can store these package measurements to calculate flat-rate shipping costs at checkout, making the process seamless and accurate. 

Opt for lightweight packaging

Packaging has a significant impact on shipping costs. Bulky or heavy packaging, like double- or triple-walled cardboard, is heavier, so most carriers charge higher fees to deliver it. Opt for lightweight materials like paper or plastic to reduce flat-rate shipping costs for your customers. Not only will this save you money, but it’ll also make your customers happy when they see lower shipping prices at checkout.

This is a great time to consider how sustainable your packaging is, too. Studies have shown 28% of US participants consider the environmental effects of shipping methods when making online purchases. Eco-friendly packaging made from corn, sugar cane, or recycled materials helps your customers feel they’re doing their part to combat climate change. They’re also lightweight enough to pass on discounted flat-rate shipping costs for your customers. 

Upsell expedited shipping or insurance

Flat-rate shipping works because it tends to even out over time. While you may profit from shipping for low-value orders, you might fork out some cash to pay for shipping on more oversized orders. 

Upsells like expedited shipping or shipping insurance can help you increase profit margins at checkout. Customers can pay an additional fee to get their order faster or feel more confident that you’ll replace their product for free if it’s damaged in transit. These little extras can make a big difference in your bottom line, giving your customers more options to customize their shipping experience.

Combine shipping offers with promotions

The flat-rate shipping strategy you decide on today may not be the best strategy at all stages of your business, or even at all points of the year. For example, during peak periods like Black Friday and Cyber Monday, you might offer a more attractive flat rate as a promotional strategy, helping you stand out from the competition and driving more sales during these crucial shopping periods.

Some carriers also increase their prices or extend delivery commitments during busy periods. Watch for changes in carrier shipping costs and change your flat rates accordingly so you’re not left out of pocket fronting the difference between what you’re charging customers and the price of shipping labels. Staying on top of these changes and being proactive with your shipping strategy ensures your business remains profitable and competitive, no matter what the season brings.

Integrating flat-rate shipping with ecommerce platforms

Most ecommerce platforms are equipped with the features you need to charge flat rates for shipping. Shopify, in particular, allows you to save flat-rate box sizes and record product dimensions and weights, so your customers always get the most appropriate flat rate at checkout. 

Here’s how to set it up:

1. From your Shopify admin, go to Settings > Shipping and Delivery.
2. Next to the shipping profile to which you want to add a shipping rate, click Manage Rates.
3. Next to the zone to which you want to add a rate, click Add Rate.
4. Enter the name and amount for the rate.
5. Optional: Add weight-based or price-based conditions.
6. Click Add Conditions.
7. Select whether to base the condition on order weight or price.
8. Enter the minimum and maximum values for the conditions.

If you’d rather not deal with the complexities of shipping, consider outsourcing the entire order fulfillment process to the Shopify Fulfillment Network. It will connect your store with Flexport, a leading third-party logistics company that can handle packaging, shipping, and delivery for you. This is a great option if you want to focus on growing your business and leave the shipping headaches to the experts.

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