How Business Owners Can Save With Flat-Rate Shipping

13 min read

Choosing the right way to ship is rarely a set-it-and-forget it process. The size, weight, distance traveled, and speed of delivery all impact your shipping costs. Even if you simply ship the exact same items over and over again, you should evaluate every different package to ensure you use the best shipping method possible.

One smart way that small business owners can make their shipping a little simpler is by incorporating flat-rate shipping. USPS has offered USPS Priority Mail® Flat Rate for years, and FedEx offers FedEx One Rate®. In the autumn of 2019, UPS® introduced UPS® Simple Rate to join the other two carriers in offering flat-rate shipping options.

Each of these options has its own pros and cons and unique factors that make them more optimal to use in certain instances than their competitors. Here, we will go over some of these differences and examine when you can put them to use for your business.

What Is Flat-Rate Shipping?

Flat-rate shipping takes many forms across the three major carriers. Basically, packages ship for the same cost regardless of weight (up to each carrier’s limit). With FedEx and UPS, you also avoid certain surcharges that normal services would incur (USPS does not charge such surcharges). Flat-rate shipping can make it easier to budget shipping, particularly once you figure out when it is most optimal.

Take a look at the below side-by-side summary. In this chart, you can see some of the key similarities and differences that may or may not fit your products and shipping needs. This is taken from ShippingEasy’s E-commerce Seller’s Guide to Flat Rate Shipping, which is free to download.

When Should You Use Flat-Rate Shipping?

There are certainly instances where using flat-rate shipping will benefit you, but also times when it will not. Particularly when you ship heavier products and/or products traveling further across the country, flat-rate shipping can save you substantially on your shipping costs.

Lighter weight packages, particularly less than one pound, would likely be cheaper using other services. In fact, USPS First Class Package Service (FCPS) is unbeatable for packages under one pound. It doesn’t come with a guaranteed delivery window, but usually takes anywhere from 2-5 days to arrive for most locations. USPS FCPS is zone-based, but the most you’ll pay for it is $5.70 (with USPS Commercial Rates, available from many shipping software providers).

Here’s an example:

A small, 14-ounce package, shipping from Houston to Miami (Zone 5):

Note: the USPS rates below use Commercial Pricing

Priority Mail Flat Envelope: $7.15
FedEx One Rate Express Saver 3rd Day: $12.05
USP Simple Rate in a polymailer: $16.50
USPS First Class Package Service: $5.27

In this case, you wouldn’t want to use any of the flat-rate shipping options, but rather USPS First Class Package Service.

Heavier packages

Priority Mail Flat Rate lets you ship for the same cost all the way up to 70 pounds. Packages weighing 10 pounds and 50 pounds ship for the same cost. FedEx and UPS allow you to ship packages up to 50 pounds using flat-rate options.

These three shipping methods can be especially useful for businesses that ship varying medium-to-large dense items, such as automobile parts or bags of coffee. Below is an example of how a coffee vendor uses a combination of USPS and FedEx to save money and meet customer expectations of 2-day shipping in a cost effective way.

Time-sensitive packages

FedEx and USPS are the only carriers that offer next-day delivery on flat-rate options, but USPS only offers this with envelopes. If you have products that need to get there in a hurry, these two may be your best bet. Just be sure to compare them to other overnight services to ensure you are paying the lowest amount you have to.

You have a lot more options when it comes to the 2-3 day delivery window. This has become nearly an expectation of most e-commerce customers, but it doesn’t have to be a major burden on your bottom line. Evaluating your options for longer-distance or heavier packages against non-flat-rate shipping options is important in this range, as there are times when it could go either way for the cheaper option.

Odd-shaped products

Carrier provided boxes from FedEx and USPS can be ordered for free from their respective websites, and will even be delivered to you. One issue using FedEx and USPS is that you must adhere to the packaging they provide to use their flat-rate services. If your products don’t fit neatly into these box types, you’re out of luck.

UPS is the only carrier that allows you to use your own packaging. In fact, they require it, outside of the ability to use their standard UPS Express® packaging for Simple Rate Second Day Air shipments. As long as you stay within their box volume guidelines (length x width x height) you can use your own boxes and still get flat shipping rates through UPS Simple Rate.

How Local Businesses Can Save

Using combinations of the above options is a smart way to ship. USPS offers another product that can be particularly useful for small businesses who ship local or nearby — Regional Rate. USPS Regional Rate takes distance traveled into account but not weight (up to the carrier limit). The closer the destination, the lower the shipping cost.

There are two box types in Regional Rate: Box A and Box B and you can ship up to 15 and 20 pounds respectively. USPS offers a couple different styles of each box, top-loading versus side-loading, each with different dimensions based on your needs. If you can fit your products into these boxes and are shipping within some of the lower zone shipping tiers, you can see substantial savings compared to other flat-rate shipping options.

How to Set up Flat Rates for USPS, FedEx, and UPS in Your Ecwid Store

Choosing shipping options is just the first step. Now you need to let your customers know which shipping services you use and how much it will cost them. The most convenient way is to display the same rates at checkout that you’ll pay when shipping orders to customers. You should charge customers the exact amount you’re going to pay at a post office, carrier store, or through shipping software, so as to not lose on your own margins to shipping expenses.

To make sure that rates displayed at checkout cover your costs, you need to set up real-time (automated) shipping rates in your store. This allows you to accurately display shipping costs at checkout, and your customers are charged fairly and appropriately. If you have an Ecwid store, you can set up automated shipping rates for USPS, FedEx, and UPS in less than a minute.

Note: Shipping options are delivery speeds, and a flat rate is a pricing option that is applied to a delivery speed to save on its costs. For example, UPS 2nd Day Air®, UPS 3 Day Select®, and UPS® Ground are shipping options, and UPS® Simple Rate is a flat rate pricing option that can be applied to them.

USPS, FedEx and UPS offer various shipping services and they also offer flat rate pricing (USPS Priority Mail®, FedEx One Rate® and UPS® Simple Rate) for some of these services. If you want to ship with services available for flat rate pricing, you can enable them in your store to be displayed at checkout.

First, let’s have a look at how you can set up real-time shipping rates in your Ecwid store.

Before you start, you need to:

mark products as shippable and enter each products’ weight
specify the shipping origin address on Shipping & Pickup page (scroll down to “Select a shipping origin that will be used to calculate shipping rates”)
specify destination zones (you can restrict destination zones to a whole country or to specific states).

Then, set up real-time shipping rates for USPS, FedEx, or UPS:

Go to Shipping & Pickup in your Control Panel.
Scroll down to “Add a new shipping method” and click “+ Add Shipping.”
Select the carrier company — USPS, FedEx, or UPS. Click “Set up.”

Choose Automatically calculated rates from the chosen carrier and click “Set up.”

Go to our Help Center to read more about setting up real-time shipping rates for USPS, FedEx, or UPS.

If you have your own USPS, FedEx, or UPS account, you can connect it to your Ecwid store. This way you’ll be able to get live negotiated rates associated with your account. Learn how to connect your USPS, FedEx, or UPS account to your Ecwid store.

Now to enable flat rate services (shipping options) from USPS, FedEx, or UPS:

Go to Shipping & Pickup, click “Actions” next to the carrier and choose “Edit.”
Scroll down to “Shipping options” section and enable the services you want to offer at checkout.
If you ship with UPS, flat rate pricing (UPS® Simple Rate) is available for the following options: UPS 2nd Day Air®, UPS 3 Day Select®, and UPS® Ground. (UPS 3 Day Select® is not available for UPS® Simple Rate shipments originating in or destined to Alaska and Hawaii).
If you ship with FedEx: flat rate pricing (FedEx One Rate®) is available for the following options: FedEx Express Saver®, FedEx 2Day®, FedEx 2Day® A.M., FedEx Standard Overnight®, FedEx Priority Overnight®, FedEx First Overnight®. (FedEx One Rate® pricing is not available for intra-Hawaii shipments).
If you ship with USPS, it’s easy to identify options available for flat rate pricing (USPS Priority Mail® Flat Rate): they have “Priority Mail® Flat Rate” in their name. There are 70+ USPS shipping methods and many of them are available for flat rate pricing, so do your research first to enable the ones that fit your store best.

Disable other services if you want to offer the ones available for flat rate shipping only.

After you follow these steps, your customers will be able to choose from the enabled services at checkout.

Keep in mind that you’ll need special packaging if you use UPS® Simple Rate or USPS Priority Mail® Flat Rate. You can pick it up at your local post office or order online — check out FedEx and USPS websites.

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Small businesses are constantly trying to compete with large retailers and online marketplaces. Be smart about shipping and find the best way to manage those costs, and you can help your business succeed and thrive while still meeting customer expectations.

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Jul 9, 2020

About the author

Rob Zaleski is Head of Brand for ShippingEasy, the easiest online shipping and email marketing platform for growing businesses. With ShippingEasy, merchants can access discounted USPS and UPS shipping rates, automate shipping, create repeat business, and get time back to focus on their business.