What Is “Flat-Rate Shipping”?
There’s at least one shipping “method” that falls neither into a discussion of timeline, nor transportation method. Some carriers will offer what’s called “flat-rate shipping.” This simply means that the price of shipment is predetermined—usually based the container used for shipping—rather than the weight of what’s in it or where it’s going.
Most of the time, the price to ship something depends on a) how far it has to travel, b) how it’s traveling, and c) how much it weighs. After that, there are additional costs depending on how quickly you want it to get there, among other things.
This is what’s happening when you’re ordering something online, and the shipping price changes as you change the destination, the delivery speed, etc.
Well, some businesses have started to realize how annoying it is for customers to not know how much shipping will cost until the end of the process. Want this solid gold replica of Darth Vader’s mask? Well, surpises: it will cost twice its actual value just to get it to you. Nobody likes that.
That’s where flat-rate shipping comes in. You throw all the stuff you want to ship into a single box (usually a specially designated box provided by the carrier), tape it shut, and hand it to the people at the counter. Then, those wonderful individuals with the sharp uniforms charge you the predetermined cost to ship the box, regardless of its weight, destination, or otherwise.
Flat-rate shipping usually has a preset shipping speed as well, though you can sometimes pay more to get the box there faster. And there are usually limitations associated with it (even if only a maximum weight limit). Other than that, though, you only pay the flat rate, hence the name.
Ecommerce businesses have their own version of this (which we discuss more elsewhere), though how it’s implemented varies; here are some examples:
- “Free Shipping”
- Loyalty/membership-based shipping discounts
- Time-based/seasonal shipping discounts
- Minimum order thresholds
Should I Ship Flat-Rate?
We don’t want to give you the wrong impression, here. Flat-rate has a lot of advantages, but much like clothing sizes, no shipping option will be an optimal fit for every use case.
Shipping via a flat-rate service will benefit you most when the package is small in size, but comparatively heavy weight-wise. The closer the item is to the upper weight limit, the greater the shipping savings, in most cases.
Which makes sense: if most fees are based on item weight and distance, then a standardized flat rate would most benefit parcels on the higher end on both of those scales. The further you get from either of those extremes, though, the more likely it is that you’re losing on the deal.
Take the USPS for example. Their flat rate offering is Priority Mail Flat Rate. It’s useful because of it’s predetermined cost, it’s “free” boxes (which are included in the flat rate price), and their Priority Mail status, which promises better service and delivery times. But it’s not the only Priority Mail service available.
Priority Mail Regional is similar; it uses an official box like flat rate, but the shipping costs are also determined by how far the package has to travel. This means that shipping somewhere close by can actually prove cheaper via this service.
Similarly, Priority Mail Cubic can be a cheaper way to ship, provided your package is small enough to qualify, and weighs less than 20 pounds. Depending on weight and distance, this can be a better choice than Regional.
Finally, if the item is light enough, it may be best to ship it via weight-based methods. As an extreme example, if you’re shipping a big box full of styrofoam, you’ll be losing quite a bit shipping via flat rate methods (when the weight-based cost would be negligible).
In other words, consulting an expert on what service will save you the most can do wonders for lowering your shipping overhead (especially if that consult is free).
In the end, flat-rate shipping can be very advantageous under the right circumstances. Implementing it wisely is key, as shipping fees vary wildly, and what’s best for one package isn’t necessarily best for another.
Even if the majority of your sales are comparable in size, weight, and so forth, shipping distance alone will make it difficult to standardize. And don’t get us started on delivery speed…