Setting up Third-Party Carrier Calculated Shipping Rates on Your Shopify Store
Updated February 10, 2023.
As easy as it is to set free or flat rate shipping, it may not be the correct choice. Free shipping looks good on paper, but it can quickly eat into your product profit margins and your business's bottom line. On the other hand, flat rate shipping can often leave your customers feeling like they've overpaid for freight.
So, how do you keep your customers happy without over or undercharging them at checkout? Easy, with carrier-calculated shipping.
This post covers what carrier-calculated shipping Shopify rates are, the benefits of this type of shipping method over other Shopify shipping methods, who qualifies to offer carrier-calculated rates, and how you can add this feature to your Shopify store in just a few simple steps.
What is Third-Party Carrier-Calculated Shipping?
When prices are set for products within a Shopify store, an applicable shipping charge also needs to be designated. There are five different shipping methods Shopify offers merchants:
- A flat shipping rate - Just as it's just as it sounds, this rate charges a flat fee for product shipping no matter the cost, weight, or size of a shipped item.
- Free shipping - Offers Shopify customers just that, free shipping on any items bought from an online Shopify store.
- Local delivery method - Gives Shopify merchants the ability to deliver locally to their own customer orders by setting a delivery fee and a minimum order amount.
- Customer experience choosing shipping rate - This allows customers to choose from various shipping options that best suit a customer’s chosen product/s. The best shipping options are automatically offered to them based on their order.
- Carrier-calculated shipping - A method of freight that bases shipping fees on a customer’s individual order.
Carrier-calculated shipping works like this: when a customer has wrapped up their shopping and heads to a store’s checkout page, a shipping fee is calculated based upon:
- Shipping origin
- Shipping destination
- Dimensional weight of the packed items
- Dimensions of the packed items
- Value of the shipment
- Customer's requested speed of delivery
Benefits of Real Time Carrier-Calculated Shipping Shopify Rates
With carrier-calculated shipping, the customer will see exactly how much shipping will cost based on a real-time calculated rate rather than just an estimate or a flat fee.
For Shopify merchants, there are two simple ways to use third-party carrier-calculated shipping rates.
1. A single carrier service is used for all orders. This is a simple process that involves integrating a shipping carrier calculator directly into the store's checkout page.
2. This is a slightly more complicated yet more flexible method. It involves using multiple carriers to calculate different shipping rates. A slight downfall of this approach is a third-party Shopify app will need to be used. Although, integrating a third-party Shopify shipping app is a relatively straightforward process that, once set up, comes with many benefits.
Listed below are the major benefits of third-party carrier shipping in more detail.
Add More Postage Flexibility
Shopify’s carrier-calculated shipping automatically calculates the best rate from a set of preselected freighting companies by use of a shipping rates calculator. This integration displays a custom shipping rate to the customer at checkout. Alternatively, it displays all available rates and durations, giving customers the freedom to choose which shipping method they prefer.
Avoid Overcharging and Undercharging on Shipping Costs
Using an integrated app that facilitates shipping options from multiple carriers, a Shopify store avoids overcharging or undercharging their customers on shipping costs.
The main benefit to this approach is that accurately calculated shipping costs not only improve a store's chances of reducing cart abandonment but also minimizes the likelihood of underquoting a shipping fee and missing out on profits.
On top of that, more than one shipping solution can also help to boost customer satisfaction by giving them additional shipping options they may not find from your competitors.
Ship Internationally With Ease
Overseas shipment for many Shopify merchants can be a real hassle as every overseas location poses a set of unique challenges. For instance, depending on the shipment’s designated destination, location-specific taxes, laws, or other advanced shipping rules and regulations may be imposed on some or all imported goods.
To avoid the hassle of international shipping, the use of carrier-calculated rates will seriously reduce the amount of time spent researching different international shipping costs and completely take the headache out of overseas shipping once and for all.
Carrier-calculated shipping is available to store that find themselves in one of the following scenarios:
- If the Shopify store is located within the US and has Shopify Shipping currently set up, then they are eligible to offer third-party calculated shipping from USPS, UPS, or DHL Express.
- If the Shopify Store is located within Canada or Australia and is already using Shopify Shipping, then they are eligible to offer third-party calculated shipping from Canada Post (for Canadian stores) or Sendle (for Australian stores).
- If the Shopify store is not located within the USA, or if a store would like to display third-party carrier-calculated rates from other freighting companies like FedEx, they will need to upgrade to the Advanced Shopify plan or Shopify Plus plan.
How to Set up Carrier Calculated Shipping Rates on Shopify
Before setting up third-party carrier-calculated shipping rates, a store will need to have accurate weights in the item's product descriptions. This is a crucial step as without this information, the quoted shipping cost provided to your customers at checkout could be inaccurate.
This may lead to additional and unexpected shipping fees being charged to either your store or your customers.
Carrier-calculated shipping rates can be added to your Shopify store by following these simple steps:
- In your Shopify Admin, go to "Settings."
- Click on "Shipping and delivery."
- Next to the shipping profile, where you'd like to add a shipping rate, click "Manage rates."
- Next to the shipping zone where you would like to add a shipping rate, click "Add rate."
- Select the "Use carrier or app to calculate rates" option.
- In the drop-down menu, select the shipping service that you would like to add calculated rates for.
- Select the different shipping methods you would like to provide to your customers from that particular shipping service.
- Add any handling fees that you would like added to the calculated shipping rate.
- Select "Save."
Set up Flat Rates in Shopify
Final Thoughts
Although third-party carrier-calculated shipping isn't necessary to operate a Shopify store, it will certainly boost its chances of success. Your customers will not only enjoy the shipping options and flexibility it will bring them, but your store will now be able to do business with international customers while avoiding all the headaches that go with it.
