Shopify Shipping Rates Setup Guide
Flat rate, calculated carrier rates, or free shipping — how each shipping method works and affects your margin.
By Marginory team · Online sellers with hands-on experience across Etsy, Shopify & PODUpdated Fee data verified against official platform documentation
The three shipping rate methods
| Method | How it works | Risk |
|---|---|---|
| Flat rate | One fixed price for all orders (or by weight/price tier) | Losses on heavy/distant orders if set too low |
| Calculated rates | Real-time carrier pricing based on destination/weight | Low risk, but requires accurate package setup |
| Free shipping | No charge to buyer, cost folded into pricing | Requires accurate margin planning to avoid losses |
Free shipping thresholds
A common strategy: offer free shipping above a spending threshold to increase average order value, while charging shipping below it. This requires calculating the threshold carefully so the incentivized larger orders still remain profitable after the "free" shipping cost.
Setting up shipping zones
Shopify lets you define shipping zones (domestic, international regions) with different rates for each. Getting zone-specific rates right matters most for stores shipping internationally, where cost variance is largest.