Shopify Shipping Guide: Know Your Options and Rates When Fulfilling Shopify Orders

If you run a Shopify store, you need to ensure the customer experience is seamless even after checkout. Between the time a customer places an order on your site and the moment a shipment arrives at their doorstep, a lot can go wrong.

Not only is the customer experience on the line when it comes to shipping, but so are your profitability and margins.

Executing a smart shipping strategy is easier said than done, and chances are you didn’t launch your Shopify store to get into the business of packing boxes and shipping orders.

How can Shopify merchants ace shipping and fulfillment? This guide walks you through your options to determine your ideal process and pricing strategy to help you understand the best way to ship your products to your customers.

How Shopify shipping works

Shopify merchants have several options for shipping orders. Without using any additional third-party shipping apps or order fulfillment services, there are a couple ways to handle shipping through Shopify alone.

Shipping settings in Shopify

When referring to shipping in general in Shopify, we are talking about the built-in feature for all Shopify merchants where you manage your store’s shipping settings via the Shipping page in your Shopify admin.

To start shipping products from your Shopify store, you need to complete the following tasks:

  1. Set your address as the shipping origin
  2. Add product weights
  3. Choose your preferred package types
  4. Add shipping zones to choose the regions your store will ship to
  5. Define shipping rates for each zone that will show up during checkout (free shipping, cost by order price, or cost by order weight — all with the ability to set certain conditions)

Shopify Shipping

When referring to the add-on feature called Shopify Shipping, we are talking about the shipping suite that gives merchants access to calculated rates to process orders and print shipping labels in bulk without using a third-party integration.

Shopify Shipping is available to Shopify stores that are based in the US, providing rates for USPS, DHL Express, and UPS, as well as Canada, which exclusively uses Canada Post.

Here’s how it works:

  1. List dimensions and weights for all of your products and product variations
  2. Set up carriers
  3. Buy shipping labels from Shopify
  4. Pack your box and put the label on it
  5. Ship your orders from your post office of choice

Shopify Shipping features

The Shopify Shipping suite has several features to help merchants manage shipping costs and the overall process.

Bulk order management

Shopify merchants have the ability to prepare several orders at once with bulk order fulfillment and label printing. This feature works out of the box to help fulfill and ship orders to customers faster and on time.

Centralized database

Shopify tracks every part of the customer order, so merchants don’t have to copy and paste customer info and addresses, duplicate effort, or integrate any third-party systems.

Shipping option management

Shopify merchants can show exact rates from carriers or offer flat rate shipping to customers. Either way, merchants get to maintain control at checkout while offering various shipping speeds to customers.

Label generation

Shopify merchants can print labels from their phone or computer using a thermal label or desktop printer. Then it’s ready to be affixed to the box and shipped to the customer.

Shopify Shipping rate options

Before a Shopify merchants ships any orders, they need to have their shipping rates and options configured. This includes understanding how much you will pay for shipping and how much you will charge your customers.

Here are the most common ways to charge customers for Shopify store shipping.

Exact shipping cost

An exact shipping cost is when you charge a shopper the same amount that carriers like USPS or UPS will charge to ship the order.

Pros:

  • Avoid over-charging customers by providing the true cost for each order
  • You won’t have to worry about losing money

Cons:

Free shipping

Free shipping means that you don’t charge customers a separate line item for shipping. This can be site-wide, for orders over a certain amount of money or weight, or through a promotion code.

Pros:

  • Reduces shopping cart abandonment and encourages shoppers to complete their purchase
  • Helps you stand out from the competition
  • Seen as a value and can be used in your marketing

Cons:

  • You can lose money if you haven’t calculated how it will affect your margins
  • If you ever change your offering, repeat customers may not buy from you again because they expect to receive free shipping

Weight based shipping

Weight-based shipping refers to charging customers for shipping based on how much their order weighs.

Pros:

  • Keeps shipping costs for each order more accurate (or at least closer to the cost you will incur), since shipping rates are calculated based on the weight of the products you’re shipping
  • You can charge different prices for different weight ranges

Cons:

  • Doesn’t take the total cost of the order into consideration
  • Dimensional weight can be a confusing concept for customers to grasp
  • You’ll need to know the exact weights of each product and have them recorded in Shopify

Flat rate shipping

Flat-rate shipping is when you charge a fixed shipping rate for every order.

Pros:

  • Offer a consistent price for everyone
  • Keeps shipping options simple and easy to manage
  • You can charge one shipping rate for all orders going to a certain country

Cons:

  • While it should be a calculated average across all shipments, Shopify flat rate shipping may not end up completely covering your costs for some orders
  • Flat rate shipping can also seem too expensive for smaller order values, which in turn can cause shopping cart abandonment

Price tiered shipping

Price-tiered shipping refers to charging customers a delivery cost based on the total cost of the entire order. For example, a $10 order would have a different shipping price than a $100 order.

Pros:

  • Provides a more tailored shipping rate based on how much the shopper spent
  • Prevents shopping cart abandonment for shoppers who spend very little (and wouldn’t want to pay more for shipping than the actual order)

Cons:

  • Must be calculated strategically
  • Doesn’t take order weight into consideration (not always a good option for cheap but heavy products)

Downsides of Shopify’s default shipping

There are a few limitations of the default shipping settings within Shopify. This prevents ecommerce businesses from doing much beyond the basics and requires some manual intervention.

Calculating the right rates

Your Shopify store must be based in the United States or Canada to use Shopify Shipping and display calculated rates to your customers. Otherwise, you are stuck with flat rate shipping. You must be on the Advanced Shopify plan or higher to set up your own account credentials with USPS, Canada Post, UPS, or FedEx. Other courier options are limited.

Calculating the right rates gets even more complex if you’re shipping internationally as you need to complete the Customs declaration form. Shopify doesn’t automatically calculate tax and duties for international shipments. You will have to manually update the rates yourself at the country-level.

“We partnered with ShipBob to scale up operations in the United States. We’ve seen a reduction of 70% on shipping costs in the US, which helps keep conversions high. It makes it a lot easier to spend marketing dollars when we know exactly what shipping costs are going to be.”

Greg MacDonald, CEO & Founder, Bathorium

Although you can (and should) set up product weights for each item you sell, you can’t add product dimensions. Because dimensional weight is used by many carriers, basing a shipping rate on the order weight alone may not reflect the ultimate shipping cost.

Time-consuming fulfillment

Managing shipping and logistics is a big undertaking for any ecommerce business. When you’re spending time packing boxes and running to the post office, that’s valuable time that’s taken away from more strategic tasks.

“ShipBob can process shipments more quickly than we could in-house and at scale. These time savings translate into cost savings as well.”

Sarah Chalos, Co-Founder and President, I Heart Keenwah

Because there are some manual aspects to managing Shopify shipping without any apps or order fulfillment partners, it can be difficult to get everything done that you need to. If you can’t get orders shipped on time, customers may become unhappy.

Difficult to scale

Managing Shopify shipping yourself is possible to do until you reach a certain point. If you remain consistent in your sales and don’t plan to grow, keeping it simple may work for you. As your business grows, it’s inevitable that you’ll need to incorporate new systems, shipping options, markets, and sales channels.

You will want to offer a consistent customer experience and find the best shipping rates, services, and speeds to compete with top brands. As they grow, many Shopify merchants will turn to external providers and expand into multiple fulfillment centers.

“ShipBob offered us the best solution and was tailored toward our needs as an early startup business on its way to growing.”

Tamarin Oblowitz, Co-founder, Baja Bae

How to optimize Shopify Shipping rates

Setting up the right shipping options and charging the correct amount on your Shopify store is a make-or-break factor for all ecommerce businesses. If you want to be accurate with charging each customer the true shipping cost of their order, what’s displayed for one customer can be very different for another customer buying the same item.

Shopify shipping rates will vary for customers depending on where your inventory is located, the product weights and prices, shipping destinations, service selected, and much more. Here are some tips to optimize your Shopify shipping rates.

Real time shipping app

Shopify’s real time shipping is an advanced and accurate method of calculating shipping costs to display to your customers at checkout. It’s done automatically for any product and is based on the customer’s location and delivery preferences.

Shopify grabs the exact rates from its carriers so you can charge customers the amount you incur to ship the order. You need to be on the Advanced Shopify plan to use real time shipping.

Optimize packaging

A common reason for spending too much on shipping is when packing mistakes occur. Using too large of a box may end up costing more, while shipping an order in a box that’s too small may damage the goods inside. The size of your box should allow for little buffer room to add protective fillers.

While not always a direct line item of the overall shipping cost, the cost of packaging should also be considered. Using custom branded boxes is a great way to provide an in-person extension of your Shopify store, but it’s an expense that doesn’t work for every business.

Inventory management

Where you store your Shopify inventory is a key factor that impacts shipping costs. Understanding where your orders are shipped to can help you distribute your inventory to areas that will reduce time in transit and shipping costs.

If your customers reside in several geographic regions across the country, splitting your inventory would be a financially viable option. That way, each time an order is placed on your Shopify store, the fulfillment center that is closest to the shipping destination will fulfill it.

To understand where your ecommerce business should distribute your inventory, download the free Inventory Distribution Calculator.

Top 3 Shopify Shipping apps

The shipping category of the Shopify App Store has countless third-party options to help with everything from saving on shipping rates to automating the shipping process. Here are some of the top Shopify shipping apps.

ShipStation

ShipStation makes importing, managing, and shipping your orders exceptionally efficient. Whether your monthly shipments total 50 or 500,000, every merchant can take advantage of their discounted rates. ShipStation lets you choose from nearly 40 different carrier services across the US, Canada, Australia, and the UK.

Shippo

Shippo provides cheap and convenient shipping to help you succeed, including access to discounted shipping rates and the ability to print labels and send tracking info to customers from one place. Shippo helps you streamline your shipping, so you can focus on growing your business.

Order Printer

Shopify’s very own Order Printer app is free and easy to set up. You can quickly print custom packing slips, invoices, labels, or receipts for all your orders. Print documents in bulk or one at a time depending on your needs.

Using a third party to fulfill Shopify orders

Unlike the third-party options we listed under Shopify Shipping apps, using a third-party to fulfill Shopify orders involves physically sending your inventory to a company that eliminates many tedious tasks for ecommerce businesses.

A third-party logistics (3PL) company provides not only shipping rates and labels, but a multitude of order fulfillment services. These include the warehousing of inventory, picking and packing orders as they are placed online, returns, and more.

Many Shopify merchants outsource fulfillment to a 3PL instead of handling it in-house. There are pros and cons of having a third-party fulfillment partner handle Shopify shipping.

Benefits of 3PLs:

  • Save time by taking care of packing and shipping for you
  • Provide more sophisticated shipping options
  • Are shipping and fulfillment experts
  • Hold inventory and handle operations for you
  • Have the ability to ship from different geographic regions
  • Get better rates from carriers

Downsides of 3PLs:

  • They don’t know your product as well as you
  • You hand over control of inventory management and packing
  • Some have a confusing pricing structure and/or expensive fees

Each Shopify merchant must evaluate their order volume, shipping costs and speed, special requirements, and various 3PL options to understand if outsourcing fulfillment is right for them.

5 benefits of integrating with ShipBob

ShipBob is a tech-enabled 3PL that helps Shopify merchants fulfill orders as quickly and cost-effectively as possible to meet their customers’ expectations every day.

ShipBob works with major US carriers like DHL, USPS, and UPS. Given the incredibly high volume of orders they fulfill daily, ShipBob has been able to negotiate bulk discounts with each carrier, and those savings are passed on to our clients.

Learn why ShipBob’s fulfillment solution is the ideal fit for Shopify merchants.

1. Connect your Shopify store in 30 seconds

Since technology drives order fulfillment, you need a 3PL like ShipBob that can handle the technological piece for you as well as deliver on your customer experience.

ShipBob seamlessly integrates with Shopify, making it possible for you to link your store with the click of a button, and then import your products and orders. The backend work is already done for you, so it’s very easy to get started without any developer work.

shopify integration connect to shipbob fulfillment 3pl

This two-way flow of information lets you combine data sources for a more cohesive view of your orders, inventory, fulfillment centers, shipments, and customers.

If you sell on any marketplaces, you can just as easily connect those to ShipBob for integrated fulfillment and inventory management across all sales channels.

“We researched several different fulfillment providers before choosing to partner with ShipBob. We were impressed with the transparency of pricing and services provided by ShipBob, as well as the easy onboarding and tech integration with our Shopify store.”

Nicole Humphreys, Founder, August Effects

2. Ship orders from fulfillment centers in largest US markets

ShipBob helps clients split their inventory across our network of fulfillment centers, which are all located in major US cities: New York City, Los Angeles, Chicago, San Francisco, and Dallas.

shipbob fulfillment center locations 2018 chicago new york city dallas los angele san francisco usa map

Instead of having to ship all of your orders from a single location, you can reduce time in transit and save money by automatically shipping from the fulfillment center closest to your customer.

Storing inventory near your customers reduces the shipping zones or distance your orders have to travel. The higher the shipping zone shipped to, the more expensive it typically is to send an order from Point A to Point B.

 

3. Offer affordable same-day and 2-day shipping

ShipBob has predefined coverage for cheap guaranteed 2-day ground shipping offered at each fulfillment center.

ShipBob’s technology validates the destination zip code entered at checkout in real-time — comparing the items ordered with real-time inventory counts in each fulfillment center — to determine if the order qualifies for the discounted 2-day shipping option.

Only customers that have a shipping address within the coverage area will see the new shipping option.

ShipBob’s 2-Day Express Shipping Program lets Shopify

This means customers near the fulfillment centers that store your inventory can get affordable two-day shipping – which reduces shopping cart abandonment – for a fraction of the price of costly expedited air shipping. Shopify merchants choose how much they charge for the 2-Day Express shipping option.

Speeding up deliveries and keeping them affordable for customers is a top concern for us. With ShipBob, we can comfortably assign a shipping cost to each order by pinpointing the product weight and destination zip code.

Greg MacDonald, CEO & Founder, Bathorium

[Download: The Guide to Offering Affordable 2-Day Shipping]

ShipBob also offers same-day delivery to your customers in the same large cities our fulfillment centers are in.

4. Have orders automatically sent to ShipBob to be fulfilled

When your Shopify store is connected to ShipBob’s technology and we have your inventory, staff at our fulfillment centers pick, pack, and ship items as soon as your customer places an order on your Shopify store.

ShipBob’s software automatically routes the order to the fulfillment center that can ship the order to your customer in the most efficient and cost-effective manner. This means no manual steps or extra data entry required for you.

If you need to make changes to a customer’s order post-purchase, you can easily edit or pause the order up until we start fulfilling it.

5. Send shipping information back to customers

ShipBob’s technology lets you view the status of each order at any time as it moves from processing to shipping, along with a time-stamped history.

shipbob order tracking shopify order shipped

Once an order has shipped, ShipBob automatically sends confirmation back to your Shopify store, so your customers receive their tracking information and stay in the loop throughout the delivery process without you lifting a finger.

Learn more

Interested in hearing more about ShipBob’s integration with Shopify? Check out the case studies below to hear Shopify merchants share their experience with ShipBob.

Bathorium Saves 70% on Shipping Costs As They Increase Delivery Speed & Expand in the US

Canadian luxury bath brand Bathorium partnered with ShipBob to fulfill orders and saved thousands on shipping costs with improved speed when breaking into the US market. Shopify paired with ShipBob’s intuitive software gives the Bathorium team all the tools they need to manage orders, inventory, and shipments, and achieve long-term scalability.

Why Creepy Co. Selected ShipBob to Handle E-Commerce Order Fulfillment

Because Creepy Co. uses Shopify and ShipBob, they experience a seamless connection between the two systems. Even though they outsource their fulfillment, the Creepy Co. team doesn’t feel like it’s out there happening without knowing what’s going on.

Why Bierstick Chose ShipBob to Fulfill Orders From Their Online Store

With Shopify as the backend platform for their website, Bierstick enjoys the ease of integration between their shop and ShipBob’s software. With one click, Bierstick is able to import products from their store – populating pictures, SKUs, and more – for customers to buy and ShipBob to automatically fulfill.

Connect your Shopify store