Free shipping vs flat rate
Work out what a typical parcel costs you to deliver, then compare it with the contribution a typical order leaves after product cost and payment fees. If delivery is a small slice of that contribution and the cost per parcel is fairly consistent, absorb it and offer free shipping, because the word free removes a decision at the worst moment. If delivery cost swings hard with weight or distance, charge a flat rate and show it early, because a hidden cost that appears at checkout is the most reliable way to lose an order.
There is a middle position that suits most stores: free above a threshold, flat rate below it. That only works if the threshold sits a little above your current average order, close enough that adding one more item feels reasonable rather than absurd.
Choose
Free shipping
when
- Parcels are light and similar in size, so the cost per order barely varies
- Contribution per order comfortably covers the delivery cost without repricing
- Your category is bought on impulse and any extra cost at checkout kills it
- Competing listings in the same results already show delivery included
- You can set a threshold slightly above today's average order rather than giving it away outright
Choose
Flat rate
when
- Weight, bulk or destination make the true cost swing between orders
- Margins are thin enough that absorbing delivery would remove most of the profit
- You ship long distances or to islands and remote areas where carriers charge more
- Customers order single low value items where free delivery would cost more than the product
- You would rather keep product prices competitive in a comparison view
| Criterion | Free shipping | Flat rate |
|---|---|---|
| Cost | Delivery is priced into products, so every order carries it | Delivery is paid by the buyer, but some orders are subsidised and some overcharged |
| Setup effort | Reprice the range or set a threshold, then update feeds and policy pages | One rate, one policy line, less repricing work |
| Time to signal | Two to four weeks to see the effect on checkout rate and average order | Similar, but abandonment at the shipping step moves within days |
| Control | Less control of unit margin when parcel costs rise | Direct control, since the rate can be adjusted when carrier prices change |
| Best for | Small light goods, impulse categories, competitive price comparison | Heavy or bulky goods, wide zone spread, thin margin ranges |
| What can go wrong | Prices rise to cover delivery and the store looks dear in shopping results | The rate is discovered late in checkout and carts are abandoned at that step |
| How we measure it | Checkout completion rate and contribution per order after delivery cost | Drop off at the shipping step and average order value above and below the threshold |
When both apply
Most stores end up running both at once, split by a threshold. Set the threshold from your own order distribution rather than a round number: look at where orders cluster and place it just above the middle of that cluster, so a shopper can reach it by adding one realistic item.
Whatever you choose, state it on the product page and in the cart, not only in checkout. Shoppers who know the delivery cost before they start have already accepted it, and the same policy shown in your feed keeps your listings consistent with what the checkout charges.
Questions
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