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Shipping strategies

There are many shipping strategies you can use in your business. Taking the time to understand which one works best for each region you ship to helps keep your profit margins positive, ensures customers are charged a correct shipping cost, and helps maximize checkout conversion rates.

Key factors for dropshipping shipping strategies

The following factors apply to most shipping strategies.

Suppliers send out products on your behalf

You don't need to send products yourself. This means that you don't need to buy shipping labels for your orders. However, if you choose a shipping strategy where you first order products from Oberlo to your location, then you need purchase shipping labels and ship the items yourself.

Suppliers charge you, you charge your customers

As a business owner, you decide how much you charge your customers for shipping. The shipping rates set by your supplier are what they charge you to send a product to your customer, not what your customer is charged. The shipping rates that you create in your Shopify admin are the rates that your customer is charged.

For example, a supplier may charge you $5 for shipping, but you want to offer your customers free shipping. In this scenario, whenever a customer places an order on your store they see your free shipping rate, and when you pay your supplier for the product cost you are charged an additional $5 for shipping. For strategies on how to set your shipping prices, see Shipping strategy examples.

Different shipping regions need different shipping strategies

You can set different strategies for each of the shipping zones you create. For example, if your suppliers offer free shipping to only the United States and Canada, then you could have a free shipping strategy for only those two countries and charge a flat shipping rate to the rest of the world.

Check the shipping costs you pay your supplier

Knowing how much it costs you to send products to your customers helps you determine which regions to ship to and which shipping strategy to use for each region.

Steps:

  1. From your AliExpress account, go to the page of the product you want to see shipping costs for.
  2. Next to Shipping, click the country and shipping method link:
    Highlighted country and shipping method link
  3. Change the country in Ship my order(s) to to see the cost of shipping for each of the countries you want to ship to:
    Highlighted

Evaluate the different shipping strategies

Your shipping strategy depends on your line of products and which types of suppliers you have. The more products and suppliers you have, the more things that you need to consider when setting up your shipping rates.

Method Strategy used by Considerations

Free shipping

Your customers don't pay any shipping costs at checkout.

Most stores

Helps with marketing

Easy to set up

Leads to higher conversion rates

Could reduce profits

Single flat rate

Your customers are charged one amount for shipping, regardless of the products and quantities they order.

Stores with 1-3 suppliers

Stores with 1-3 items per order

Helps offset shipping costs

Easy to set up

Can lead to lower profits

Tiered flat rates

Your customers are charged a specific rate based on the value or weight of their cart.

Stores with 1-5 suppliers

Stores with 1-10 items per order

Helps keep profit loss low

Can be complicated to set up

Per-item shipping rates

Your customers are charged a shipping rate that is the total of all the products' individual shipping costs.

Stores with many suppliers

Stores with many items per order

Shipping costs are accurate

Minimal profit loss

Can lead to high shipping costs and deter checkouts

Time-consuming to set up

Requires an app

Determine when to accept returns

Returns are a good way to recover inventory that was sent to the customer in error. Because you likely still need to send the customer the correct item that they ordered, asking for a return of what was originally sent can help you use the returned item again in a future order.

Most AliExpress suppliers do not accept returns. However, you can choose to accept returns yourself and have the customer ship the product to you instead of the supplier. Accepting returns only when there is nothing faulty with the product, such as if the wrong product was shipped, can be a good strategy. This lets you use the returned products for promotional materials or for selling in person.

If you and your customer are both in the United States, then you can buy return labels directly in the Shopify admin. Otherwise, you must purchase a return label to email to your customer through a third-party shipping carrier service, such as UPS or FedEx.

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