What Shipping Rate to use for Single Packages?

What Shipping Rate to use for Single Packages?

September 3rd, 2009

Previously we established that it’s best to include total package weight when determining the shipping rate for single packages, but small online retailers also want to know if they should build shipping rates specific to each package weight or if they should use one rate for a range of weights such as 0-5 pounds $10.00?  And what if weight doesn’t vary much or amount to much as is the case for some clothing?

UPS recommends that the answer goes back to the general principle that simpler is better and a range is usually simpler than specific weight rates. 

There’s risk here however.  Risk that your shipping cost may be less than the actual and you’ll end up eating cost or that your shipping cost is way too high and so you may lose some customers who see your shipping cost as too high given what they think their product weight is.  The greater the range that you build the greater the risk will be.  If you do choose to go with a range try to keep your shipping rate at the midpoint of the range.  On a 0-5 pound range, go with a 3 pound rate.  You’ll lose money on 4 and 5 pound orders but make money on 1 and 2 pound orders.  Over time you may observe that your orders are skewing towards the higher or lower ends of the range and you can adjust your rate accordingly.  Keep in mind also that in calculating your average rate you’ll need to take into account not only the average weight but also the average zone. 

You can take this a step further if you’re selling a very narrow variety of products or products that don’t vary much in weight such as CDs or lingerie.  If this is the case then you should consider a very simple flat rate for all shipping.  Industry experts agree that this far more appealing to consumers than providing product specific rates.  It also enables you to communicate shipping costs immediately to shoppers on your home page.  If you’ve got a competitive flat rate you’re going to have significantly less shopping cart abandonment than if you don’t.

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