How to Increase Sales and Offer a Better Customer Experience with Flat Rate Shipping — Backoffice (2021)

Whether you’ve just started your business or have been running it for years, shipping can be one of the most challenging things to figure out. And while there is no one-size-fits-all shipping strategy, there are some best practices you can follow to help you get started. One of those best practices is using flat shipping rates to create a more thoughtful shopping experience for your customers and increase your sales. 

What are flat shipping rates?

Flat shipping rates are specific shipping amounts that you charge a customer based on their order. You can offer a general flat shipping rate that will always be the same regardless of what you’re shipping, or conditional flat rates based on product weight or order price. For example, you might charge $10 for orders shipping domestically, $15 for orders shipping internationally, and $5 for all orders over $100. Many merchants set up a few flat shipping rates to account for their different shipping scenarios.

So how many flat rates should you set up? You might need to play around with different options to find what works best for your business. But ultimately, you want to be able to balance your costs while offering attractive shipping rates to your customers.  

How flat shipping rates can lead to more sales

One of the main reasons flat rates are so attractive to customers is because they manage expectations and provide transparency. Flat rates allow you to let customers know how much you charge for shipping before they even get to the checkout step. And this is important because shoppers don’t like to be surprised by shipping costs when they go to complete their purchases. In a recent study, these additional costs at checkout were found to be the number one reason for abandonment during checkout. But with flat rates, you can minimize the surprises by communicating your shipping costs right away, either through an announcement bar or on your shipping policy page. You can even offer free shipping over a certain cart total to encourage customers to add extra products to their cart and, in turn, increase your average order total. 

What’s more, flat rates within Shopify are attached to shipping speeds based on the shipping class you want to use (not yet available in all markets). This means that when you go to set up your flat rates, you’ll automatically be setting up delivery time estimates. When customers check out, they’ll see these time estimates and will be able to get an idea of how quickly their order will arrive, which could lead to improved conversion and increased sales. 

A flat shipping rate of $10 with 3 to 9 business days in transit.

How much to charge for flat-rate shipping

What you should charge for flat-rate shipping will depend on your products, where you’re located, and where you’re shipping to. While you want to offer customers a good checkout experience, you also need to consider how much it will cost you to get your orders out the door. Ideally, the two should work hand-in-hand to create a strategy that increases sales without cutting into your bottom line

The best way to figure out how much to charge is by estimating your average shipping cost. This average can be set as your general flat rate and means that, depending on the order, you might end up making a little money on shipping or losing a little money. The goal is for everything to balance out in the end.

To estimate your costs, you’ll need to know the weights and dimensions of your products and packages. Use an online shipping calculator and take note of all the different shipping estimates. Once you have all of your estimates, calculate the average cost. Your flat rate should ideally be a round number. For example,  if your average comes out to $11.72 for domestic shipping, round that up to $12. 

Keep in mind that what you decide 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 Cyber Monday, you might choose to offer a more attractive flat rate as a promotional strategy. Overall, you should find a rate that works for your business and also considers your potential fulfillment challenges.  

Using weight and price conditions

You might want to build off of your general flat shipping rate by introducing weight or 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, suppose you wanted to charge different rates for orders below and over 5 kg. Using weight-based rates, you could set a flat shipping rate of $7 for orders under 5 kg, and a flat shipping rate of $15 for orders over 5 kg. Using the example above, a customer with a cart that has a combined weight of 7 kg would have only the $15 shipping option appear at checkout. This option is useful if you’re shipping products on the heavier side and you don’t want to absorb the higher costs for shipping heavier packages. 

With price-based rates, you can charge a specific amount for shipping based on your customer’s total cart value. For example, suppose 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. Price-based rates can encourage customers to add additional products to their cart to qualify for cheaper shipping options. While this means that you’ll absorb more of the shipping cost, it might be a viable option if it means increased cart totals. 

The Sill offers 3 different flat rates based on order price: $5 for orders under $10, $10 for orders between $10-$100, and $25 for orders over $100.

Offering free shipping

When it comes to increasing sales, free shipping is the way to go. Our research found that for 59% of customers, free shipping improves their online shopping experience. The same study found that Shopify stores that offer free shipping tend to receive more sales. But while free shipping can increase sales, it will also come at a cost to you. Luckily, there’s a more manageable way to offer free shipping—making it available over a certain cart total. Offering this kind of incentive, like free shipping over $100, can help you balance out your shipping costs and increase your average cart total while still offering an attractive option for your customers at checkout. 

Kinsfolk offers free shipping to Canada for orders over $100, and free shipping to the United States for orders over $150.

How to set up flat rates

  1. From your Shopify admin, go to Settings > Shipping and delivery.
  2. Next to the shipping profile that you want to add a shipping rate to, click Manage rates.
  3. Next to the zone that you want to add a rate to, click Add rate.
  4. Enter the name and amount for the rate.
  5. Optional: Add weight-based or price-based conditions.
    1. Click Add conditions.
    2. Select whether to base the condition on order weight or price.
    3. Enter the minimum and maximum value for the conditions

Learn more about setting up flat rates

Bringing it all together

While there’s no single shipping strategy that works for every business, flat rates can help you offer a better checkout experience and encourage repeat business. When it comes to online shopping, customers are looking for fast, affordable options that manage their expectations and provide flexibility, and flat rates can help you provide all of those things. From the ability to manage price expectations early on, communicate delivery speeds, and offer affordable pricing based on cart totals, flat shipping rates can help you increase sales while balancing your costs. 

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