Beginner’s Guide to Ecommerce Shipping Pricing
To start an ecommerce business, you need four things:
- Products—something that customers in your niche need and you can provide with.
- Storefront—a place where they can find and purchase those products.
- Payment processor—a tool that will carry out the business transaction between you and your customers.
- Shipping—a way to deliver your products to your customers.
Take one of the four essentials out of the equation, and your retail business will no longer be functional.
We’ve already spoken about creating products, setting up your online storefront, and finding the best payment gateways. It’s about time we covered the last subject—shipping.
Basic elements of ecommerce shipping
Shipping expenses are something you as an ecommerce business owner can’t avoid. What you can do, however, is map out all the costs associated with product shipping to decide how much you should charge your customers for delivery.
Here’s what goes into the shipping price of any product:
- Product size and weight. The shipping cost is directly affected by the size and weight of your product. The weight of your packaging and pack-ins matters too!
- Shipping destination. As a store owner, you need to decide whether you want to ship domestically, internationally, or both. And if internationally, to which countries.
- Shipping method. Think how fast you want your products to reach your customers.
Based on these variables, carriers will offer you shipping rates which you can later use as a base when setting up shipping prices on your store.
How does shipping work with Printful?
As a store owner, you need to keep in mind two shipping prices:
- The shipping rate that Printful charges you to deliver products to your customer.
- The shipping price you set up on your storefront and your customers have to pay.
No matter what shipping price you display on your storefront—the same as Printful’s, lower, or higher—you still need to pay Printful what it charges you for the shipping.
Here’s what I mean:
Let’s say you want to use free shipping to grow your store. The shipping price of your product is $3.99 (that’s what you’ll be charged by Printful once a customer places an order). You can either incorporate this cost into the product price, or pay for it out of your pocket.
To give you a better picture of what to expect from Printful’s shipping, in the next section we’ll take a look at:
- How fixed shipping prices are calculated at Printful.
- What your options are if you want to use live rates on your storefront.
- Things you need to keep in mind when finalizing the shipping setup on your storefront.
Shipping rates at Printful are calculated using the Standard shipping method. The prices are grouped by product category, so all items within a single category have the same shipping fee. Several items of the same category delivered in the same order will have an additional, lower fee.
For example, the Standard shipping rate for sending one t-shirt is $3.99. Every additional t-shirt in the same order adds $1.25 to the shipping cost:
- 1 t-shirt = $3.99
- 2 t-shirts = $5.24
- 3 t-shirts = $6.49
The Express and Overnight shipping methods are available at Printful if your ecommerce integration supports live rates.
Live shipping rates are shipping price calculations made by the carrier at the time your customer is making a purchase. When you set up shipping on your storefront using live rates, your customers can pick and pay for the shipping method they prefer.
To set up shipping on Printful’s side, head to Dashboard > Settings > Store > Shipping. Standard and Express are available for all regions. Note that Overnight shipping is only available for US domestic and manual orders.
When setting up shipping prices on your storefront, keep in mind:
- Your ecommerce integration specifics. Most ecommerce platforms offer setting up shipping based on product weight or order value (you can use Printful fixed rates for that). But if you want to enable live shipping rates, make sure your ecommerce platform supports this feature.
- Your shipping pricing strategy. There are different ways how you can charge your customers for the product delivery. We’ll get to it a minute.
- Delivery time information on your storefront. To give your customers the most accurate ETA for receiving their order, combine the estimated shipping time with our fulfillment time. We take about 2-7 business days to create apparel products (t-shirts, leggings, etc.) and 2-5 business days for non-apparel products (posters, mugs, etc.).
4 ecommerce shipping pricing strategies
Shipping price and delivery are a make-or-break deal for online shoppers:
- 75% of them expect free delivery even on orders under $50.
- 44% of customers agree orders sent with a fast shipping method should arrive in 2 days.
- 80% of shoppers want their purchases to arrive within 7 days at the latest.
This puts a lot of pressure on merchants as they’re not only expected to offer different shipping methods, but also charge a reasonable price for the delivery. There are several different shipping pricing strategies that will help you be in sync with these expectations without having to sacrifice profit.
Not sure where to start? Take a look at the most common shipping pricing strategies you can try out today.
1. Let customers pay the full shipping price
If you’re looking for a hassle-free way to handle product shipping costs, charge your customers what your shipping (or fulfillment service) service will charge you. This option can work for stores that:
- Offer lightweight products with low shipping prices.
- Have earned their customers’ trust—the full shipping price is part of the brand’s transparency.
- Sell one-of-a-kind products—the full shipping price isn’t a turnoff and customers are willing to pay extra.
2. Increase prices of products to cover part of the shipping cost
An unexpected or high shipping price is one of the reasons why customers abandon their shopping carts. To reduce shipping price shock, include part of the costs in the product price from the get-go and present a lower delivery fee on the checkout page.
Let’s say you’re selling phone cases for $16.99 a piece. After considering all shipping methods, you decided to offer standard delivery for this product at $3.50 per item. Add $2 dollars to your product price, and reduce the shipping cost to $1.50.
Even though the money customers spend on the order is the same, the idea of paying less for delivery will make them feel better.
3. Incorporate the shipping price in the product price and offer free shipping
Offering free shipping is one of the most recommended ecommerce marketing strategies out there. But remember, free shipping is never really free. Try the following shipping pricing strategies to enable free shipping on your store.
3.1 Free shipping on all orders
If you’re selling small and lightweight products with a high profit margin (like jewelry), add the delivery cost to the product price.
A few extra dollars on account of shipping won’t make a difference for customers who’re already eyeing expensive goods. But if you’re worried that the price increase will scare them away, reformat your price tags to make your expensive product look like a total steal.
3.2 Free shipping with an order minimum
Setting a free shipping threshold is a time-tested way to increase a store’s average order value. The key is to set the threshold keeping your customers’ average order value in mind. The threshold has to be low enough so people still want to add more products to the cart, and high enough so that it’s profitable for you.
3.3 Free shipping for specific products only
Use this strategy to run a limited-time promotion to encourage customers to buy:
- New products
- Slow-selling products
- Seasonal products
- Products with a low shipping cost
3.4 Free shipping to certain locations
If you’ve never offered free shipping on your store, deliver products for free only to certain cities, states, or countries. If the strategy works and your sales go up, expand to more regions.
3.5 Free shipping to loyal customers
Run free delivery campaigns for returning customers to reward their loyalty. Set up an automated email that delivers a free shipping coupon code for customers depending on their purchase frequency, average order size, or other criteria. For example, you can offer free shipping for customers who have spent $500 in the last 90 days, or customers who’ve placed 3 orders in the last 60 days.
Another way you can offer free delivery to loyal customers is by building a loyalty program with free shipping perks. Enable free shipping to all loyalty program members or make it available to customers who meet a specific spending threshold (say $500 per calendar year).
4. Combine different shipping pricing strategies
To meet your customer needs, sometimes picking just one shipping pricing strategy isn’t going to cut it. You might need to combine different strategies.
That’s exactly what clothing, accessories, and home decor retailer Anthropologie does.
Anthropologie ships products globally. Both domestic and international customers can pick the delivery method they prefer.
The brand offers three shipping methods based on delivery time and shipping charges. Returning customers are also welcome to join Anthropologie’s loyalty program to get extra shipping perks. And those who can’t wait to receive their package can pick it up from the store.
Putting together a shipping pricing strategy like this takes time, but it can be a game-changer for brands that want to cater to different customer needs while keeping the shipping speed and price expectations under control.
What is your shipping pricing strategy?
Shipping is a fundamental part of your online business, so handle it with care. Identify the shipping costs based on your product type and potential destination as soon as you have these variables on hand. Then, evaluate customers’ expectations and start defining your shipping pricing strategy one step at a time.
Just like with everything in ecommerce, picking shipping prices that work for both you and your customers will take time. So welcome customer feedback and be ready to make some changes.
What’s your experience with different shipping methods and pricing strategies? Share in the comments!