Key takeaways
- You calculate shipping costs based on weight, size and carrier.
- Choose between passing on costs, free shipping or a limit (e.g. from €50).
- Shipping costs that are too high are an important reason for dropouts.
- Set clear shipping rules per product or order.
Shipping costs affect two things at once: your margin and your conversion. If you charge too low, you will pay for each order. If you charge too high or show the costs too late, customers will drop out at checkout — unexpected shipping costs have been the biggest reason for abandoned shopping carts for years. The trick is therefore not “as low as possible”, but a rate that matches your costs and that does not scare the customer away.
This guide shows what your shipping rate depends on, which three strategies you can choose, and how, with a simple calculation example, you can determine a rate that keeps your margin healthy.
What does your shipping cost depend on?
A carrier counts on a combination of factors — not one number:
- Size — does it fit through the letterbox or is it a package? This is by far the largest lever.
- Weight — above each limit (e.g. 1, 2, 5, 10 kg) you jump to a more expensive class.
- Volume weight — a large but light box is sometimes charged by its volume rather than its actual weight.
- Destination — domestic is cheaper than Belgium/Germany, which in turn is cheaper than further away.
- Extras — insured shipping, signature upon receipt, track & trace.
Those who keep their packaging small and flat pay the least. More about this in send cheap packages.
Three ways to charge shipping costs
1. Fixed rate
One amount for each order, for example € 4.95. Simple and predictable for you and the customer. Count it on your average package: if your average shipping is around €5.20, you will cover most of it. Disadvantage: the rate feels high for small orders, but low for large orders.
2. Free shipping for orders over and over
For example, free from €50. This does not reduce your costs, but increases the average order value: customers put something extra in the basket to reach the limit. Set the limit just above your current average order and include the shipping costs in your margin.
3. Actual costs (real-time)
The exact rate based on weight, size and destination, calculated live at checkout. The fairest and you never pay, but the amount is less predictable for the customer. Works well for an assortment with widely varying sizes or a lot of international shipping.
Many online stores combine strategy 1 and 2: a flat rate, with free shipping above a threshold.
Charge a fair rate: an example
Suppose your average package costs you €5.50 to send (including packaging). Your options:
| Strategy | What the customer sees | Effect on you |
|---|---|---|
| Fixed €4.95 | low, clear costs | you pay €0.55 per order (deliberately, for conversion) |
| Free from €50 | “free shipping” | higher order value; costs in your margin |
| Actual costs | exact rate | never commit, less predictable |
| Included in price | “free shipping” | margin the same, highest conversion |
It is important that you choose it consciously and calculate it in your margin — not that you take the lowest number.
The Psychology of “Free Shipping”
Customers respond more strongly to the word “free” than to the actual amount. €5 shipping feels more annoying than a €5 higher product price with “free shipping”, while your margin is the same in both cases. That is why many online shops include shipping costs (partly) in the product price. Test what works best for your target group.
Practical tips
- Show shipping costs early. Surprises on the final payment screen are the main reason for canceled orders. Mention them on the product page or in the shopping cart.
- Use a free shipping limit to encourage larger orders.
- Keep your sizes standard, so that you know in advance what an order will cost for shipping.
A platform that has shipping built-in automatically calculates the rate at checkout based on weight and destination — see simple shipping from your webshop.
Frequently asked questions
How do I determine my shipping rate?
Calculate your average package (size, weight, destination) and choose a flat rate, a free shipping limit, actual costs or a combination. Do this consciously and calculate it in your margin.
Should I offer free shipping?
Not mandatory, but a free shipping limit works well: customers order more to reach the limit. Then include the costs in your margin.
When should I show the shipping costs?
As early as possible — preferably on the product page. Unexpected charges on the checkout screen are the biggest cause of cart abandonment.
What is volumetric weight?
With a large, light box, the carrier counts on the volume instead of the actual weight. Pack compactly to avoid a volume surcharge.
Can I include shipping costs in my product price?
Yes, and that often increases conversion (“free shipping”). Your margin remains the same; only the presentation changes.
Get started
Weigh your average package, choose a shipping strategy (often: flat rate + free from a threshold) and set your rate. If you want to structurally reduce those costs, read reduce shipping costs.
