E-commerce Tools & Best Practices

Shopify Shipping 101: How to Optimize Shopify Shipping Rates

By: Michelle McNamara | August 1, 2018

For sellers on Shopify, shipping rates are incredibly important. In fact, 68 percent of online retailers consider the cost of shipping to be their biggest operational challenge. With different carriers, service levels, box types, shipping integrations, and more, there are many aspects of shipping that can be modified to improve costs. When it comes to your Shopify shipping rates, even saving a few cents per package can make a big difference on your bottom line.

Here are a few tips to make sure you’re getting the best rates for your parcels.

Optimize Shopify Shipping Rates for Top-selling Packages

If you’re short on time, you’ll want to focus on improvements that will have the most impact. Start by identifying your most popular packages and looking for ways to save on these shipments. If you’re just starting your e-commerce business, target a few items that you think will sell well and then closely monitor performance over the next year.                

Are You Using the Best Box Sizes?

First, look for ways to minimize the box size. If your product is extremely popular, you may want to purchase customized boxes to fit the package perfectly. Also, consider padded envelopes and poly mailers. Oftentimes, these packaging types are more cost effective, because they take up less space in the delivery truck.

Can Your Packages Stand to Lose Some Weight?

Weight is a huge factor in the cost of shipping. To decrease package weight, you’ll have to get creative. That might mean you send two different packages, so you can benefit from the affordable service levels that support lightweight packages. Whenever possible, take advantage of cost-effective delivery options like USPS First Class Package Service for packages up to 13 ounces.

Can You Leverage Special Service Levels?

There are many other unique service levels that will help keep some money in your pocket. For example, if you’re shipping to a local address, consider a regional carrier or a USPS Regional Rate Box.

If you have a small, heavy product, see if it fits in a USPS Flat Rate Box. It’s a great option since the weight won’t impact the cost of the product, letting you avoid the hefty price tag that comes with hefty products.

If you only ship educational material, like books or instructive DVDs, consider USPS Media Mail. It’s very strict about the contents you can ship, but if your packages qualify, you’ll save significantly.

Store Products in Multiple Locations

One of the key indicators of your Shopify shipping rates is the distance the packages travel. Longer distances between origin and destination addresses usually mean more expensive shipping costs.

Take a look at where your packages are going and optimize around the most-popular destinations. If you have a majority of packages getting shipped to California, consider renting warehouse space in the state and leveraging a mix of regional and national carriers to deliver your packages locally.

Renting warehouse space has never been easier. Now, you can use an on-demand warehousing service like Flexe which allows you to store products in one or more warehouses under a short-term contract. Flexe supports your growth, since you can start with one location and grow into many. There are no long-term leases and a single set of terms for all providers.

If you do sell on Shopify, starting in August you’ll be able to save multiple sender and return addresses to help you manage products in multiple locations. That way, you can manage inventory in your warehouse locations with a seamless fulfillment process.

Compare Rates in Real Time With a Shopify Shipping App

After you’ve done your research and prepped your packages, you’ll still want to compare rates with each package you ship.

Find a Shopify shipping app that lets you compare Shopify shipping rates in real time between international, national, and regional carriers. That way, you can have peace of mind that you’re getting the best rate with every package.

Shippo is a multi-carrier shipping software that lets you compare shipping rates for more than 55 carriers worldwide. With Shippo, you can also manage orders, automatically send tracking information, and seamlessly process returns.

Shippo will support Shopify’s multiple locations functionality once it’s launched. With Shippo, you can opt for the Pay As You Go plan that has no monthly subscription fee—you just pay five cents per label—or you can choose the Professional subscription plan with no label fee and more customization options.

This is the second of a series of posts dedicated to helping Shopify sellers optimize their shipping strategy to boost their bottom line. You may also be interested in the first post on how to choose a Shopify shipping app. If you’re looking for more advice, check out our e-commerce tools and best practices page.

Michelle McNamara

Content Strategist at Shippo

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