Shipping costs can be a bit of a headache for eCommerce businesses, but opting to use flat-rate shipping can help make things a bit more manageable. Flat-rate pricing is far easier for both businesses and customers to wrap their heads around, and it’s a popular shipping method for all kinds of eCommerce businesses across the world.
Today, we’re going to take a look at what flat-rate shipping is, how it differs from standard shipping, the advantages and disadvantages of flat-rate shipping, and under what circumstances flat-rate shipping is a good solution.
In this article
What is flat-rate shipping?
Flat-rate shipping is a type of shipping in which the price is determined by the packaging, such as the envelope or box, rather than the weight or dimensions of an item. It’s a way of standardising shipping costs, removing the huge variations created by different weights, dimensions, delivery locations, and so on.
Flat-rate shipping options will usually have a maximum weight and measurement that an item mustn’t exceed in order to be eligible.
An example in the UK would be Royal Mail’s Large Letter service, or in the US, the USPS’ Flat Rate Envelope service. These services have the same shipping cost regardless of the item your shipping, and each each major courier as regular shipping services that follow this model.
Virtually all carriers offer flat-rate shipping options, and they’re commonly used by eCommerce businesses who want to make their shipping options and fulfilment process more straightforward.
Flat-rate shipping vs standard shipping
Flat-rate shipping and standard shipping are actually used pretty interchangeably nowadays, but there’s significant differences between the two.
As explained above, flat-rate shipping allows eCommerce businesses to ship their products at fixed price, as long as it meets the weight limit and measurement requirements of the courier service.
There will be variants between services (Royal Mail Letter and Royal Mail Large Letter, for example, have separate flat rate shipping costs), but never within a shipping service.
For standard shipping, the cost is calculated based on the weight, dimensions, and delivery location. There might also be seasonal variations to account for.
For flat-rate shipping, delivery time is also standardised. Flat-rate shipping methods usually have an estimated delivery time that specifies the expected number of days it will take for an item to be delivered, usually within a small range(1-3 business days, for example, is common in the UK).
Standard shipping will usually take longer, and there’s more variation between locations. However, there’s more flexibility on where you can send items with standard shipping, making it a popular option for international trading.
Advantages of flat-rate shipping
Simplifies the shipping process
Offering flat-rate shipping is much more straightforward for both eCommerce businesses and customers. With flat-rate shipping, you won’t need to spend excessive amounts of time working out different shipping costs, and you won’t have to bother with a shipping calculator.
All you have to do is decide which flat-rate services you want to use, and the job’s done. This gives you more time to grow your business, market your products, improve other areas of your supply chain, and so on. You can reinvest time making cost savings in other areas of your business.
Offers transparency to your customers
Fixed-rate shipping makes choosing an eCommerce shipping option more straightforward for your customers at PoS, removes unnecessary barriers, and provides an overall better online shopping experience. Furthermore, customers will appreciate the transparency in regards to cost and have peace of mind that there will be no additional shipping fees.
Reliable delivery times
When a customer selects a flat-rate shipping option, they know how long it will take their order to arrive, regardless of how far away they are from the retailer’s warehouse or fulfilment centre.
Disadvantages of flat-rate shipping
You might not always get the best rate
Due to the standardised pricing of flat-rate shipping services, you may end up paying more for shipping than you need to.
For example, if you are shipping extremely small, light products, it could work out cheaper to send them standard as the flat-rate prices needs to account for heavier items.
Likewise, if you’re shipping in bulk, you might be able to get bespoke quotes by liaising with the carrier directly.
Can cause issues outside of your control
When people select a flat-rate shipping method, they expect to receive their order within the estimated timeframe. Delays happen, and most of the time that’s outside of your control. Still, this can result in frustrated customers, so it’s important to make them aware of potential delays at the earlier opportunity.
When to use flat-rate shipping
Flat-rate shipping works best when you sell a lot of products with the same or very similar weights and dimensions.
This means you can pick the most cost-effective flat-rate shipping option without needing to worry about certain products not being eligible. You can use flat-rate boxes and packaging as long as they comply with weight limits, and offer fixed prices to your customers.
You should also use flat-rate shipping if you want to save time. It’s a simple and convenient way to handle shipping, and that time can be spent improving other elements of your operation.
It’s also a good idea to use flat-rate shipping if you’re distributing orders from a single location. This will remove the surcharges and other shipping costs associated with moving goods between zones.
When to avoid using flat-rate shipping
As mentioned earlier, flat-rate shipping isn’t going to be cost-effective if you’re shipping a large number of small, light products, as you’ll end up paying for weight you aren’t using. You’ll be better served looking into standard shipping rates so you can calculate shipping costs for a bespoke solution.
Furthermore, if you’re shipping products a short distance, using local or short-range courier services could provide more competitive shipping prices.
Finally, a flat-rate service might not be suitable if you want to use your own packaging. While you can spend time and resources designing your custom packaging to meet courier standards, you may feel it’s more suitable to spend these resources elsewhere.
Want help with flat-rate shipping strategy? Speak to James and James Fulfilment
James and James are an eCommerce fulfilment service with facilities in the UK, EU, and USA. We combine fantastic customer service with award-winning fulfilment technology (built by us!) to offer industry-leading speed and accuracy in the world of order fulfilment.
We ship thousands of products every week, and so we know a thing or two about the best shipping strategy for your eCommerce business!
We have a large network of courier partners and a variety of flat rate options, reduced shipping charges, and all the tools eCommerce brands need to make flat rate shipping work.
If shipping or general order fulfilment is giving you a headache or taking up too much time, it might be worth considering outsourcing to a 3PL like James and James. Our fulfilment centres are optimised for eCommerce businesses looking to grow and who ship lightweight products.
Getting started with us is super simple:
- Firstly, we’ll get to know your business and design a bespoke fulfilment solution for you
- Then, you’ll send your goods to us, where we’ll label them, and keep them safe and secure in our warehouse
- Once an order is placed, we’ll pick the right items, pack it in the most suitable packaging, and pick the most cost-effective shipping method to get it where it needs to be.
- If a customer wants to return a product, we’ll handle that too.
- Rinse and repeat. And while we take of the order fulfilment process, you can get on with growing your business!
To learn more about our shipping solutions and fulfilment service, get in touch today!
Flat-rate shipping FAQs
What is the cheapest way to ship?
There’s no black and white answer to this, unfortunately. It’s always going to depend on what products you are shipping, quantities, weights and dimensions, and the destination that the goods are going to be shipped to.
Shipping needs differ from business to business, and there are always other factors to consider.
Does flat rate shipping have tracking?
Due to the rise of eCommerce, tracking is a common feature found in virtually all courier services. All the major couriers have tracking included as part of the flat-rate shipping rate.
Does order fulfilment include shipping?
Yes, shipping is often seen as the final stage of the order fulfilment process. Unless a product is defective or a customer decides to return a product, the fulfilment process is complete when the parcel is delivered to the customer.
What is the difference between fulfilment and shipping?
As highlighted above, shipping is just one aspect of the fulfilment process. The fulfilment process also includes warehouse storage, picking orders, packing them, and then processing returns if necessary.
How do shipping zones affect flat-rate shipping?
Additional costs kick in for packages shipped outside of one shipping zone. The further the shipping zones is away from your location, the higher the shipping cost will be. Shipments within the same zone will always be the same price, whereas other zones will have different flat rates depending on where you’re shipping from.