Shipping Strategy for Small Brands

Shipping costs are the #1 reason for cart abandonment. But eating shipping costs can destroy your margins.

The Three Main Options

Free Shipping

Pros: Highest conversion rates, simple checkout, competitive
Cons: Eats margins, may attract low-value orders
Best for: Lightweight products, higher-margin items

Flat Rate Shipping

Pros: Predictable for customers, simple, can be profitable on distance
Cons: May overcharge nearby customers, still friction
Best for: Mid-weight products, regional brands

Calculated/Real-Time Rates

Pros: Always accurate, fair to customers
Cons: Lowest conversion, sticker shock at checkout
Best for: Heavy items, B2B orders

The Hybrid Approach

Most successful brands use a combination:

• Free shipping over threshold (encourages larger orders)
• Flat rate under threshold (protects margins)

Carrier Strategy

Don't lock into one carrier:

• USPS for lightweight packages
• UPS/FedEx for heavier items
• Regional carriers for local deliveries
• Rate aggregators to find best prices

The Bottom Line

Your shipping strategy should:

1. Not surprise customers at checkout
2. Not destroy your margins
3. Be simple to understand
4. Encourage larger orders when possible