As of November 2019, all three major carriers — USPS, FedEx, and UPS — now offer flat-rate shipping options. This begs two questions: One, should you be using flat-rate shipping? And if so, which carrier’s flat-rate shipping options should you choose and when? Below are some of the pros and cons of using flat-rates shipping, along with some examples of when you should and shouldn’t use these options.
First, let’s examine what options each carrier provides.
Related story: How to Make Free Shipping Profitable, Part 3
Credit: ShippingEasy
Benefits of Flat-Rate Shipping
One of the immediate benefits of flat-rate shipping is predictable shipping costs. If you plan to ship 20 items that would all fall within the specified weight ranges, you can easily plan your anticipated costs.
A great example of this would be one-pound bags of coffee. Let’s say you fulfill many orders of 12 bags and 16 bags, and you can pack both order sizes in a large USPS Priority Mail Flat-Rate box. It’s easy to predict that your shipping cost for any order of either size will be $18.30 (USPS Commercial Rate), and you can budget accordingly no matter how far that order is shipping.
Flat-rate also avoids the surcharges that are typically imposed by UPS and FedEx (e.g., fuel surcharges and residential delivery fees). USPS doesn’t charge these fees.
Another benefit is that dimensional weight doesn’t apply with flat-rate shipping. Dimensional weight bases weight on the amount of space a package takes up rather than its physical weight. USPS doesn’t apply dimensional weight to any package below one cubic foot, but FedEx and UPS apply it to all packages. Using their flat-rate shipping options helps you avoid those potential increases in shipping costs.
USPS and FedEx offer packaging that merchants can order for free to use with their respective flat-rate shipping options. UPS offers the flexibility of using your own packaging, which can be helpful if you have nonstandard shaped products that won’t fit into the other carriers’ designated package sizes.
Drawbacks of Flat-Rate Shipping
As mentioned above, simply defaulting to flat-rate shipping may be easier, but it may not be the best way to save on shipping costs, particularly if you ship lighter-weight items. Let’s look at an example.
A makeup merchant sells many products that would very easily fit into a USPS Small Flat Rate box or any of the envelope options offered by all three carriers. Using the various flat-rate shipping options, your shipping cost could be anywhere from $7.65 to $16.50, depending on which carrier’s service you use. However, the more cost-effective option for a package that likely weighs under one pound is to use USPS First-Class Package Service (FCPS), which is $5.70 at its most expensive (FCPS is zone- and weight-based up to 15.999 oz).
Credit: ShippingEasy
The benefit of free packaging is also a constraint. You’re unable to use USPS and FedEx flat-rate shipping options if you don’t use their packaging. UPS still has size constraints when it comes to using your own packaging, so some items simply won’t qualify for flat-rate shipping because they won’t fit in the necessary package dimensions.
Depending on your desired time frame for delivery, some flat-rate shipping options won’t be available to you. For example, only FedEx and USPS offer guaranteed overnight flat-rate services, and only FedEx offers to ship boxes via these services (USPS’s Priority Mail Express flat-rate options are limited to envelopes). Only FedEx offers multiple guaranteed delivery times for its one-day and two-day flat-rate services. USPS Priority Mail Flat Rate doesn’t offer guaranteed delivery time frames.
There are many elements to consider when comparing flat-rate options to each other and to their non-flat-rate counterparts. ShippingEasy breaks these comparisons down into charts and tables in its E-commerce Seller’s Guide to Flat-Rate Shipping, free to download now.
Rob Zaleski is head of brand for ShippingEasy, the easiest online shipping, inventory, and email marketing platform for growing businesses.
Total Retail is the go-to source for those looking for the latest news and analysis on the retail industry. Through various forms of content and community-building events, Total Retail serves its mission to provide retail executives with the information they need to do their jobs more effectively.
If you are not yet a BRA Retail Member, you can easily opt in to either Regular (no cost) or Distinguished ($99/yr.) Membership via this super simple join form