The advantages of flat rate shipping for e-commerce

The profitability and sustainability of your e-commerce business is not only determined by your sales and revenue, but the ability to keep operational costs down. Have you looked at your shipping costs lately? Do you know if you are using the most cost-effective shipping model for your e-commerce company? Let's find out.

Global shipping costs are currently soaring, especially amid the Russia-Ukraine conflict, forcing many e-commerce companies to rethink their shipping processes in order to cut costs. One possible way to reduce your shipping fees is flat rate shipping. Here is why…

What is flat rate shipping?

Flat rate shipping meaning: 

'Paying a fixed price to transport packages irrespective of their weight, size and destination'. 

Using flat rate shipping means that you will pay one rate for the entire shipping process, which includes packaging, transporting, tracking, insurance and delivery. This means that if your e-commerce company ships a lot of packages, flat rate shipping is convenient because there is no need to calculate your shipping costs for every individual shipment. 

The flat rate model is a smart way to standardize your shipping process, and offers a sensible solution for your e-commerce company to maximize profitability and sustainability by reducing your shipping costs.

How does flat rate shipping work? 

Using the USPS flat rate box model provided by the US Postal Service as an example, there are four key steps to flat rate shipping. 

Step #1 - Order flat rate box

USPS offers eight different packaging options, including three envelope sizes and five boxes. You can order your USPS box or envelope for free and collect it from any local post office or have it sent directly to your business.

Step #2 - Pack your order

USPS flat rate shipping is charged in accordance with the size of the box. This means you don't have to weigh your packages or calculate shipping prices, provided that your packages don't exceed 70lbs. You can simply pack orders into boxes ready for shipping.

Step #3 - Attach the address

Once you have packed your boxes, you will need to attach shipping labels in a clear and easily visible place, displaying the customer address, and a return address - just in case a package does not get to its final destination.

Step #4 - Purchase your postage

The final step is to buy your flat rate shipping postage at a USPS post office or by using an online postage provider. It is possible to post your packages at your local Post Office or arrange a free collection.

Flat rate shipping vs standard shipping

Flat rate services aren't the only shipping solution available to e-commerce companies. Arguably the most common option is standard shipping. What is the difference between flat rate shipping and standard shipping? Here is how the two compare…

The key difference between flat rate and standard shipping is how costs are calculated. Flat rate shipping is a fixed cost while standard shipping prices can vary every time you send packages -  especially if you are shipping internationally.

Standard shipping prices can alter based on several factors including size, weight and distance to the final destination. You will need to weigh and measure your parcel before sending it, in order to get an accurate cost.

Take a look at the following table to see a comparison:

If you are transporting a lot of parcels locally, or even if you are operating at an international level, flat rate shipping is the ideal solution for your e-commerce company for keeping costs down.

How long does flat rate shipping take?

Based on the USPS flat rate shipping service, the delivery time for packages is usually one to three days - excluding Sundays. Shipments are sent via Priority Mail and exact delivery times depend on where packages are sent from and their final destination.

Some of the leading flat rate shipping service providers allow you to choose when your packages should be delivered. For example:

• FedEx -  Gives you the option to have your flat rate shipped packages delivered in one, two or three days
• UPS - Offers next day delivery, second day delivery, delivery within three business days or delivery within five days for flat rate shipments
• Parcel Force - Provides flat rate shipping delivery within 24 or 48 hours

Why flat rate shipping is a good fit for e-commerce companies

Flat rate shipping produces significant savings for most e-commerce companies, largely because of lower, predictable costs. If you run a small operation and you pack boxes yourself before heading off to your local Post Office to ship orders, then flat rate shipping is the ideal solution for you.

Here are 10 other reasons why flat rate shipping could be the right fit for your e-commerce business:

#1 - Convenience 

With flat rate shipping, there is no need to weigh or measure parcels in order to calculate shipping costs. Not only does this save time, it simplifies your shipping process, increases your order fulfillment efficiency and helps you to get orders out the door quickly. 

#2 - Price consistency  

Whatever type of parcel you need to deliver, irrespective of its weight or dimensions, you will always pay the same price.

#3 - Total transparency  

Flat rate shipping provides a clear, self-explanatory breakdown of shipping costs. Most e-commerce companies prefer dealing with flat rate shipping companies because of the clear pricing model. There are no additional or hidden costs, which tends to earn the trust of customers.

#4 - Automatic insurance and shipment tracking

When you use USPS flat rate shipping services your packages are automatically insured up to $50. Plus, every parcel is tracked while in transit. These shipping perks benefit both you and your customers, giving them peace of mind that their orders will arrive safely.

#5 - Speed of delivery

USPS flat rate shipping offers respectable delivery speeds ranging from one to three days. This could potentially increase your customer reach, helping you to drive more sales without incurring extra costs.

#6 - Upsell potential

With one flat fee, you can encourage your customers to spend more at your e-commerce store to make the most of fixed delivery costs. This is a great way to upsell your merchandise. 

#7 - Collection or drop off

USPS flat rate shipping means you can drop off your packages at any local office ready to be shipped. Alternatively, you can arrange a free collection.

#8 - Fewer human errors and faster response times

Standard shipping tends to involve a lot of weighing, measuring, and cost calculating, which can lead to human error. Packages that are incorrectly weighed or measured can lead to delays and result in extra charges, not to mention the hassle of having to repeat the process to correct mistakes. With flat rate shipping, there are fewer, if any, human errors. 

#9 - Free boxes

Flat rate shipping gives you access to free boxes. For example, USPS envelopes and boxes are free. However, you will still need to purchase packing peanuts or other cushioning material, but you stand to save up to $1 per box, which can represent huge savings on your shipping.

#10 - Security

USPS is the only flat rate shipping service authorized to place packages in mailboxes. Plus, unlike some other carriers, USPS will attempt redelivery of large undelivered packages rather than abandoning packages in porches or on doorsteps. This helps to prevent fraud and theft.

Conclusion

Flat rate shipping offers a simple, convenient, and cost-effective way for your e-commerce company to deliver goods, helping you to delight, retain and build loyalty among your customers. Offering fixed fees for all types of boxes and weights, flat rate services give you plenty of options for shipping your merchandise.

The flat rate shipping model is straightforward, and for companies with continuous order deliveries and multiple orders, avoiding complications is key to streamlining shipping processes. Ultimately, the goal is to preserve your profit margins, and in a world where most customers expect free shipping, flat rate boxes can help you preserve your margins.