One of the bigger decisions when it comes to how you’re going to get your products to your customers is shipping and the costs you’ll charge to do so. Some stores will offer free shipping on all orders and build the shipping cost into their COGS (Cost of Goods Sold). Others will have a flat rate shipping option “$5 shipping on all domestic orders and $25 shipping on all international orders.” This still might eat into your COGS but you have minimized it by adding the extra flat fee. The final option is using carrier calculated shipping. This requires that you provide the weights and dimensions of your products but the shipping provider (USPS, UPS, FedEx) calculates the exact price that it will cost to get the order to the destination provided by the customer.
We highly recommend carrier calculated shipping to those clients that don’t have the ability to build the shipping costs into the product. Carrier calculated shipping ultimately saves you from losing money not just on the shipping but on the product as well. Without carrier calculated shipping it is possible that someone’s actual shipping cost (the cost you pay to ship the item) to be greater than any of your estimates since you can’t theoretically calculate all the shipping costs to all locations. Losing money on shipping when you can’t afford it is no fun. The other benefit of carrier calculates shipping is the option to adjust the shipping price that the customer sees by a percentage or a flat rate. This is done by the calculated shipping cost being marked up during checkout by the Shopify carrier calculated system. We recommend carrier calculated shipping to be activated as well as offering a free shipping option, something like “Free shipping on all orders over $45.” We have experienced stores that offer carrier calculated shipping plus a free shipping option convert higher. Click here for more steps on setting up Carrier Calculated Shipping through Shopify.
At Ships-a-Lot we can analyze your store and help you decide which option best works for your business, you can inquire about our services here.