How to Ship Shopify Orders
Whether you use checkout options like Free Shipping or something more dynamic like Shopify Shipping Profiles or In-Cart Delivery Options, you need to figure out which shipping options work best for your different orders. In this section, we’ll go over different shipping options that you may offer in Shopify. We’ll also discuss different add-ons like shipping insurance and packaging.
How to Offer Free Shipping
Free shipping is the preferred shipping option. As larger retailers and marketplaces begin offering this for more customers, it begins being demanded of smaller merchants too. In fact, over 50% of customers expect shipping to be free.
Generally speaking, you want shipping to be no more than about 10-20% of your profit margins. There are a number of ways to learn the cheapest way to ship a package, but a good way to offset free shipping costs is to incorporate shipping costs into the item cost. This is a common practice for merchants selling on marketplaces that require merchants to offer free shipping. And it also works well on your own online store. However, if you inject too much cost into the item price, you run the risk of losing the customer to shopping around elsewhere.
Typically free shipping is reserved for lightweight items with high-profit margins. It may even be used on a per-item basis. This is a good use case for using a Shopify Shipping Profile.
How to Offer Minimum Purchase Threshold
Free shipping at a minimum purchase threshold is a great way to encourage customers to spend a little bit more money to get free shipping. Food delivery services like Grubhub are a great example of this model. Free delivery is a reserved minimum cost of about $12.00. You may not want an order of eggrolls, but a customer is more likely to spend $4 on an appetizer with their $11 entree instead of spending $3 on shipping. Using this principle can be a good way of getting customers to spend a little more from your site to drive up your profit margin while also getting the cart conversion.
How to Offer Flat-Rate Shipping
Flat-rate shipping is a common option for most retailers. Customers don’t like surprises at checkout. That can lead to cart abandonment. If you need to charge for shipping, try and offer flat-rate shipping.
Let Your Customer Choose Their Shipping
Because ShipStation offers discounted shipping rates on carriers like USPS, UPS, and DHL Express, you may want to pass these savings onto your customers. In Shopify, you can display rates from these—or adjusted versions of them— to your customers at checkout. This allows you to have responsive shipping rates that can both protect your profit margins while also giving your customers greater shipping options and saving them money.
How to Offer Shipping Insurance
Shipping insurance is a way to cover damage or loss of a parcel during transport. Things like order defect rates and lost parcels can impact profit margins far more than the cost of shipping insurance because, luckily, shipping insurance is not very expensive. However, there are things to remember about shipping insurance. Not everything you think will be protected actually is.
Providing Insurance as a Checkout Option
If you want to pass the cost of shipping insurance onto the customer, typically it is offered as an item option at checkout. Shopify has a great insurance guide to help set this up. To set this up in ShipStation, you simply need to apply the insurance option prior to generating a label. To avoid forgetting this, applying insurance and other add-ons can be automated in ShipStation. A common example of automating insurance is to apply it to any order with a total order cost exceeding $50 since this is the amount that is covered by USPS Priority Mail. You can learn more about the insured value covered by different carrier services.
Should I Use Carrier Insurance or Third-Party Insurance to Cover Parcels?
Deciding which insurance to use comes down to coverage and pricing options. Typically, carrier insurance costs between $0.75-0.85 per $100 value, with a base cost of roughly $2.50. However, third-party insurance like Shipsurance doesn’t have the minimum base rate. So you only pay the rate per $100. So, it can save you substantial amounts of money if you use insurance a lot. However, different providers have more coverage than others. For instance, some policies don’t cover a parcel if it includes branding on the packaging. There are also different restrictions based on destination. If you ship to Russia, for instance, there is the chance that damages occurring in Russia are not covered. However, insurance can be applied but it is only covered up until it leaves a country that has coverage. So it would only be covered up to the point it is put on the plane. Just be sure to read your provider’s terms and conditions prior to purchasing insurance for your orders to make sure everything is covered.
Packaging Tips for Shipments
Shipping boxes help protect your items, but they also add weight to your shipment. Most shipping carriers charge based on the size and weight of a package, so it’s more cost-effective to keep your packaging as small and lightweight as possible. If you have different sizes of items, you may want to keep a few box sizes on hand. A good rule of thumb is that a box should always have 1.5 – 2″ on all sides, in order to protect the item and make the item eligible for insurance if needed. In addition, make sure to leave at least 2″ on top of the height of your object. Using a box that’s similar in size to your item(s) will also save you money by eliminating the need for excess package fillers.
Where to Get Shipping Boxes
There are two routes to take for getting your shipping supplies affordably. One option is to get your supplies in bulk. Websites like Uline.com or customizable packaging from Noissue are common ways that ecommerce companies get their boxes, tape, and other shipping supplies.
Another way that companies get boxes is to use free packaging provided by carriers like USPS. Most free shipping boxes, however, are flat rate boxes. Keep in mind that these boxes can only be used for the Priority Mail service advertised on them. If you use the packaging for a different service, you will likely be charged a cost adjustment.
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