E-commerce businesses require intensive planning before they can start running smoothly. The prerequisites for online start-ups include hosting and web development, inventories, maintenance, etc. Most importantly, the understanding of shipments is a crucial aspect.
Both customers and sellers should know the various shipping methods to engage in transactions. One of these methods is flat rate shipping, which is more profitable for small or medium-sized businesses.
What is Flat rate shipping?
For flat rate shipping, the vendor fixes the cost of shipping, irrespective of the size or weight of the package. This shipping rate is applicable to all shipping packages and boxes. The only criteria upon which the cost depends is distance. Although, there are limits for the maximum weight allowed for Flat rate shipping. For instance, for the USPS flat rate shipping, the envelope or package can weigh at most 70 lbs.
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Flat rate shipping also includes pre-determined delivery time durations and is dependent on the shipping zones. Click To TweetThese zones measure the distance between the vendor and the customer. Depending upon this distance, there are eight zones: Zone 1 to Zone 8. The higher the number of the shipping zone, the higher the cost for the package.
As a result, the shipping process becomes simple with the help of flat rate shipping. The cost remains fixed for a particular range of weight to any destination, leaving out complicated calculations. In addition to that, setting shipping costs provides clarity to buyers and also makes shipping rates more affordable. However, flat rate shipping is not suitable for time-sensitive shipments, since there are fixed delivery periods.
According to a survey by North American Technographics, 44% of buyers abandon their shopping carts because of high shipping rates. Moreover, another 22% of the customers do it because shipping rates are listed too late during the checkout. Thus, it is convenient for your customers if the shipping costs don’t vary dramatically for your products. By using flat rate shipping, you give your buyers transparency while avoiding excessive shipping rates.
How do E-commerce Companies Pre-determine the Shipping Costs?
When determining shipping costs according to the Standard Rate Shipping, multiple elements fall under consideration. These elements include the dimension and weight of the package, the destination, the shipping carrier, etc. Another significant determinant of shipping costs is the Dimensional Weight of the parcel.
The Dimensional Weight (DIM) is calculated by multiplying the length by the width by the height of the package. Shipping carriers like the USPS, FedEx, UPS calculate shipping charges by comparing both, the actual weight and the dimensional weight. The higher number determines the final shipping cost.
Several shipping carriers provide online tools to determine shipping costs beforehand. For instance, the following image is the online calculator of shipping costs for FedEx. Similarly, other shipping carriers, like USPS, UPS, DHL, provide online calculators to pre-determine the shipping costs. You can measure the dimensions and weight of the package and utilize the online tools.
How Should you Set Shipping Rates for your Online Store?
There are three different kinds of shipping rates:
Standard Rate Shipping
As mentioned above, the determinants for these shipping costs include the dimensions, the destination, and the speed of delivery.
Flat rate shipping
Since this shipping allows for a range of packages of various sizes and weights, it’s more convenient for the buyers.
As the name suggests, in this case, the seller pays the shipping charges, costing the buyers nothing.
According to a recent survey by Convey, 64.3% of 2,500 buyers believe that cost is the most significant factor for shipping. Thus, the task of the seller is to set shipping rates for their online store appropriately. Which is to say, the seller should provide cheaper shipping costs but not at the risk of their profit. Using flat rate shipping, will exclude any surcharges for the customers and provide them with accurate delivery estimates.
To set shipping rates for your store, you need to determine the average shipping cost for each product. Follow the steps noted below to do the same.
- Pick a shipping carrier, like USPS.
- Measure the size and weight of each product.
- Go online to the website of the shipping carrier you have chosen.
- Enter the dimensions of your product and the destination ZIP code.
Enter multiple ZIP codes around the country, including both rural and urban locations.
The different shipping costs for a single product across destinations provide an idea for a possible average shipping cost. This average cost would aid you in determining the appropriate shipping rates for your online business.
While it may be much work, once you calculate the average rates, later, it would be worthwhile. You can avoid all repetitive calculations for shipping with the fixed shipping costs. Moreover, this step will decrease the probability of the occurrence of weighing errors.
Reasons to consider USPS Flat rate shipping
The USPS Priority Mail Program includes flat rate shipping options. There are two flat-rate options available: an envelope or a box. As mentioned before, the weighing limit for the USPS flat-rate mailing package is 70 lbs. Moreover, the USPS flat-rate mailing box comes in three sizes: small, medium, and large. The USPS Flat rate shipping options are beneficial for small and medium-sized businesses with domestic deliveries.
There are multiple reasons to consider USPS Flat rate shipping for your online business. Here are a few of them:
- USPS Flat Rate Boxes and Envelopes: As mentioned above, USPS provides shipping boxes and envelopes, and they are for free.
- Known costs: One benefit of USPS Flat rate shipping is that the seller knows the cost of shipping before they have packed the envelope or box.
- Priority Delivery: Depending upon the destination, the estimated time for delivery is one to three days for all packages.
- Profitability: Via USPS Flat rate shipping, the customer and the vendor, both can save some expenses with cheaper shipping rates. As there are no restrictions to weight, the seller can ship small, heavy items at a reasonable cost. The cost depends on how much the seller can stuff into the USPS flat-rate envelope or box.
- Reduced Shipping Costs: In comparison to other methods, when shipping small items, Flat rate shipping is advantageous. The customers don’t have to pay any surcharges, but only a minimal, fixed amount for shipping.
- More Addresses: Unlike other shipping carriers, USPS delivers to every U.S. address, including government addresses and P.O. boxes.
- No Weighing Estimates Required: Once again, as the cost does not depend on the size or the weight of the items, there is no need to measure them.
- Law Enforcement Protection: The U.S. Federal Law protects the USPS Flat Rate Shipments, which prevents thefts and frauds.
USPS Priority Mail Flat rate shipping & Flat Rate Boxes
Having taken a look at the benefits of the USPS Priority Mail Flat rate shipping, consider the functioning of it. As mentioned above, USPS provides free flat-rate envelopes and boxes for shipping. For each size of the box, there is a fixed shipping rate. What then matters more is how much the seller can fit into the USPS flat-rate box.
As an online website points out, Eugene Nilus, the Shippo Director of Demand Generation, referred to a blog post. In the blog post, the writer compares USPS Priority Mail and USPS Priority Mail Flat rate shipping. In response to that, the Director said that one should ship small, heavy items via Flat Rate. On the other hand, one should use USPS Priority Mail to ship large and lightweight items.
Therefore, the USPS Priority Mail Flat rate shipping method works perfectly for smaller, domestic deliveries. Nevertheless, the procedure for the USPS Flat rate shipping is quite easy as well. What the shipper needs to take care of is to know the appropriate size of the box they require.
For instance, if the items can be accommodated in a medium-sized box, then buying a large one is worthless. The Flat rate shipping method is cost-efficient, but the shipper and the customer, both need to be attentive.
The following steps form the simple procedure of shipping via USPS Priority Mail Flat rate shipping:
- Get a free flat-rate envelope or box from the local USPS office. Pick a suitable size for the flat-rate box.
- Pack the items to be shipped, and write down the address.
- Carry the box to the local USPS office and ship via Priority Mail. The estimated time of delivery is one to three days, depending on the shipping zone.
Now, if one compares the USPS Flat Mail Shipping services with other shipping carriers, the former is also more cost-effective. The following are the USPS rate sheets for 2018 and 2019.
On the other hand, the following are comparisons of USPS Flat rate shipping rates with UPS shipping rates. The basis of the comparisons is the varying size of the flat-rate box.
The origin of the packages is Caldwell, Idaho, ZIP code 83607. The first two tables compare the USPS Flat rate shipping expenses with UPS Ground expenses. While the third table compares the Flat rate shipping expenses for USPS and FedEx.
Which is better: FedEx, DHL, or UPS?
We have already established the USPS Priority Mail Flat rate shipping as suitable for smaller shipments. However, when sellers are considering another shipping carrier, it’s advisable to ask three basic questions before they choose.
- Does the shipping carrier provide free envelopes or packages or boxes?
- What are the restrictions for the box size and weight?
- What are the average delivery estimates?
Keeping these questions in mind, one can begin comparing the three well-known shipping carriers: FedEx, DHL, and UPS.
FedEx has a variety of available delivery options. The FedEx One Rate Shipping is equivalent toUSPS Flat rate shipping. Although the envelopes and boxes are not free, they do not require any additional cost for packaging. They also come in twelve different sizes.
Moreover, the cost includes the expenses for the drop-off locations. One of the advantages of FedEx is that 80% of the U.S. population lives within five miles of a FedEx drop-off location. Therefore, even though it does not cover all U.S. addresses, FedEx services encompass a large population.
The maximum weight of packages allowed is 50 lbs. Although that limit is lower than the USPS’s, FedEx does offer a better price on shipping for heavier packages.
While FedEx provides a better shipping price for heavy items, the UPS Flat rate shipping can provide a quicker delivery at the same cost. However, the UPS Flat rate shipping services do not provide free packaging.
The price for the flat-rate box also includes the transportation charges for the shipment within 48 hours. The maximum weight allowed is 70 lbs.
UPS Flat rate shipping does provide better flexibility and branding opportunities. Once again, UPS shipping services are more agreeable with heavy packages.
DHL is widely known for its international shipping capacities and global reach. Within the U.S., it is not a feasible option. Being a non-American company, DHL does not have access to domestic flights between U.S. airports.
The Flat rate shipping method is not globally viable. Shipping a product internationally includes other variable expenses. For example, transportation fees, currency conversion, duties, and others.
Thus, it is preferable to utilize DHL Standard Shipping services for international buyers.
Comparison FeDEx, UPS, DHL
For upcoming and growing businesses, flat rate shipping is a reliable, cost-effective, and profitable method of shipping. The fixed rates save the buyers confusion from varying shipment charges. Moreover, they also save sellers from unnecessary expenses.
For small and heavy packages, the USPS Priority Mail Flat rate shipping is the most suitable shipping carrier to approach. On the other hand, if your business sells large products, although lightweight, consider FedEx and UPS shipping services. For international shipments, DHL is the most widely-known shipping carrier as it is.
Providing customers with cheaper and quicker shipments is to grow your e-commerce business. Fewer complications with shipping charges attract a larger audience and leave a lasting impression. Click To TweetFlat rate shipping will aid in maintaining the sustainability of your online store.