Correctly setting up your shipping settings for dropshipping within Shopify is a crucial part of running your business. When it’s set up correctly, you’ll see the conversion rate and profit margin of your store increase. You can decide whether you want to offer free shipping, paid shipping, or weight based shipping for a free plus shipping offer. Whichever method you choose, it’s important that you set it up correctly. Here’s a quick story about my first experience with dropshipping and the problems I ran into with my shipping settings…
When I opened my first dropshipping store on Shopify and made my first few sales, I ran into a nightmare scenario. I didn’t realize that the shipping settings offered actual carrier rates instead of preset ones that I created. For example, a few customers chose DHL express 5-7 day shipping for $5 through my website. However, my supplier offered DHL express for nearly $35. I had to bite the bullet and pay for the express shipping time even though I lost money.
There are a few different options you have for setting up your shipping settings when dropshipping:
Option #1 Free Shipping
Offering free shipping will increase the conversion rate of your store. Many suppliers offer free shipping via ePacket, so your profit margins won’t take. If you’re concerned with lowering profit margins you can include the shipping cost into the sales price so psychology the customer still believes they are getting a deal when they see “free shipping.”
Setting up free shipping rates is very simple, start by clicking “settings” then go to “shipping.”
Next click “Manage Rates” and begin deleting the premade shipping settings. Make sure that you only have two shipping zones: “Domestic” and “Rest of the World.” The domestic rate will be based off your address. So, if the address for the store is in the United States, the domestic shipping zone will automatically become the US.
Click “Add Rate” for the Domestic shipping zone.
Select “set up your own rates” and title it “Free Standard Shipping.”
Finally set the price to $0.00.
Repeat this process for the “Rest of the World” shipping zone to offer free shipping to all of your customers.
Option #2 Multiple Shipping Options
In my opinion offering multiple shipping options is the best way to organize your Shopify shipping settings. Offer your customer “free standard shipping”, “express based shipping”, and “insured express shipping & handling.” These rates are all essentially the same thing since you are still shipping via ePacket, but it builds customer trust when they see different options as that’s how most major brands operate. It also allows you to raise your profit margins slightly over time. I’ve found that about 30% of my customers choose one of the paid options.
Remember, customer satisfaction is key to running a business. Any time a customer has an issue with their product arriving on time be sure to respond to them. Offer your customers a discount code and apologize if you receive any messages about longer than usual shipping times. It’s also important to have good communication with you supplier. Message them early on and begin building a relationship with them. You’ll be able to leverage this relationship with quicker customer support and processing times which will avoid many customer complaints about longer shipping times.
Option #3 Weight Based Free Plus Shipping
Free plus shipping offers are great for beginners who are looking to gain some pixel data and quickly get customers to your site. Typically, this offer is used when promoting your products with Instagram influencers. Users are much more likely to respond to promotions on Instagram when they see the word “free.”
How do you make money running a free + shipping offer?
You earn profit with the difference between the price of the shipping rate and the cost of the product. For example, you want to sell a bracelet that’s $2 including shipping from AliExpress. So, you run a free + shipping offer where the sales price is $0 but the shipping cost is $9.99. Now, your profit margin is $7.99 on each sale.
This is exactly what I did when I started dropshipping. I sold ocean themed bracelets which I promoted on Instagram theme pages, quickly earning almost $200 in revenue over the course of four days.
The setup is a little bit trickier than the other options, so bear with me. First, you’ll need to add weights to the products you’re offering for free. This can be done by editing the product options and imputing the correct info like this:
Next, you’ll need to go back to your store’s shipping settings to add your rates by weight. Select add rate, then select “add conditions.”
Name the rate “Standard Shipping” and input the shipping price you want to offer. Then choose “Base on item weight” and input a range that includes the product’s weight. So, if each product weighs 1 pound, input a range between .99 and 1.01 pounds.
It’s important to repeat this process multiple times in case customers want to order more than one product. It’s also a good idea to provide some incentive to order more by reducing the shipping cost per product. For example, if someone wants to order two items that means the package will theoretically weigh “2 pounds.” Set the next rate up with the range 1.99 to 2.01 pounds and charge $15.99. Instead of charging $9.99 per item, you’re now charging $7.99 per item and making twice the profit because you only need to pay your supplier for shipping once when ordering the items.
I usually repeat this process 5 or 6 times depending on the most items I believe a single customer would order. It’s also good practice to have an extra rate at the end with a very high shipping price and maximum weight in order to deter people from ordering an absurd number of items.
Looking for more info? Checkout the this article in Oberlo that talks more about how to set up shipping settings in Shopify.
Also, checkout this video by Casual Ecommerce to watch them go inside the Shopify dashboard to set up their shipping settings for dropshipping:
I hope you have a better understanding of the best shipping settings for dropshipping as well as the different between free shipping, paid shipping, and weight based shipping. Correctly setting you shipping rates will prevent any issues down the line and allow for a fully optimized store.
Let me know down below if you have any questions about setting up Shopify shipping settings!
Also, checkout some of my recent articles:
- Sell The Trend Shops: Revolutionizing E-Commerce with Branded Website Creation for Dropshipping
- How Sell The Trend Uses AI to Find Winning Products in 2024
- Sell The Trend Review: Discover the Secrets to Winning Products
- How to Find Winning Dropshipping Products: Sell The Trend vs. Other Market Research Tools
- A Comprehensive Guide to Using Sell The Trend for Your Shopify Store