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Tiered flat rates

To help offset the shipping costs that dropshipping suppliers charge, you can charge your customers flat shipping rates based on the total weight or price of a customer's cart. This helps keep the shipping costs more accurate based on the customer's order so you don't end up with lower profit margins.

Create a tiered flat-rate shipping strategy

Before you add tiered flat rates to your Shopify shipping settings, there are a number of things to consider. Review the following to create a tiered flat-rate shipping strategy that works for you.

Know how much it costs to send products to your customers

See Check the shipping costs you pay your supplier.

A tiered flat-rate shipping strategy can get complicated, so it's important to understand how much each product costs you to ship at each quantity.

For example, you might have three products that cost $1, $3, and $6 to ship out a quantity of one and $1.50, $4, and $8 to ship out two. In this example, on average, sending one product costs you around $3.33 and sending two costs $4.50. Knowing these averages can help you determine your tiered flat shipping rates.

Decide where to offer tiered flat rates

Choose which countries or shipping regions you want to offer tiered flat shipping rates to based on how much it costs to send products to each country. If you need to change the regions you ship to, then see Shipping zones.

Reevaluate your product prices

Although tiered flat shipping rates help offset your own shipping costs, they can deter customers at checkout. Keeping the rate as low as possible can keep your checkout conversion rates high.

A strategy to keep the shipping rates low is to add part of the shipping cost into the product. For example, if the lowest cost of shipping to any shipping zone is $5, then you could add $2 to your products' price and use $3 in your calculations for what tiered rates to charge instead of $5. This strategy provides shipping prices that are lower at checkout, and helps your customers see more accurately how much the product costs to get to them upfront.

It can be hard to find the right balance between higher product prices and lower shipping costs. Testing different amounts and gathering feedback from customers can help you find out what works best for your store.

Decide if you want to store some products yourself

Another strategy to maintain your profit margins on orders with many products from different suppliers with products from many different suppliers is to bulk order products to your own location so that you have inventory available. When a customer orders products from different suppliers, you can then package and ship out the products yourself because you have some on hand.

The benefits of this method are that you can control the branding for the package you send out, the customer receives all their items at once, and you only need to pay for one shipping rate.

Create tiered flat shipping rates

After you decide which shipping zones should have a tiered flat-rate shipping strategy, you need to add flat rates to those zones. For instructions on how to add flat shipping rates, see Add price-based manual rates.


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