Shopify Shipping Rates: A Practical Setup for Healthy Margins
Shipping strategy is margin strategy. The goal is predictable customer expectations and controllable cost, not “free shipping everywhere.”
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Step 1: Know your shipping economics
- Average order weight and dimensions (packaged)
- Carrier cost bands by zone
- Contribution margin per order
Step 2: Pick a rate strategy
| Strategy | Best for | Risk |
|---|---|---|
| Flat rate | Simple catalogs | Over/under-collecting |
| Free shipping threshold | Increasing AOV | Margin leakage if threshold too low |
| Carrier calculated | Heavy/variable items | Checkout complexity and sticker shock |
Step 3: Configure zones and handling rules
- Separate domestic vs international zones.
- Use clear SLA language: processing time + transit time.
- Add handling buffers during peak periods.
Use case: subscriptions
Subscriptions amplify shipping costs. Consider bundling shipments (monthly vs weekly) and set expectations in the subscription UI.
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