In this article, we’ll evaluate Shopify Shipping compared to other paid shipping and fulfillment logistics processing software solutions. You’ll learn why Shopify Shipping is actually quite expensive, even though it’s technically free.
If you’re an e-commerce business selling physical goods online, you’re not responsible for shipping and delivering your orders on time to the end customer.
Especially if you run a small online store, you probably don’t have the sales volume to justify paying for a third-party fulfillment center.
As a result, in the early stages of business development, you have to handle delivery logistics yourself.
But the problem with shipping and fulfillment management is that without the right software, it quickly becomes complicated and tedious.
If you’re on Shopify, Shopify offers its own shipping software, which is completely free to use and immediately available for every Shopify plan.
This software is called Shopify Shipping and is a “standard and easy option” for Shopify sellers. But as you’ll learn in the article below, what’s cheap and easy can end up costing you a lot of money.
What is Shopify Shipping?
Shopify Shipping is a built-in toolkit that lets you quickly calculate real-time shipping costs, buy and print shipping labels in bulk, and track all your shipments online.
Shopify shipping is free for all Shopify users on every Shopify plan and is the default shipping management software for all merchants.
However, Shopify shipping only works with the following carriers in the US, Canada, and Australia.
As a result, if you are fulfilling orders in any other country, you will need a different solution.
How Shopify Shipping works
Shopify partners with USPS, UPS, DHL, Canada Post, and Sendle to offer discounts on their shipping services.
These discounts are already built into Shopify Shipping and are automatically applied when you print your labels.
In addition to lower prices, Shopify Shipping allows you to efficiently process orders right from your Shopify admin page.
For example, you can print labels for bulk shipping at the click of a button with a pre-filled package weight based on your product specifications to save you time.
In addition, tracking information is automatically sent to the end customer so they can track their shipments. If you ship internationally, Shopify Shipping can also be used to create customs forms and calculate customs duties.
Shopify Shipping is 100% free for any Shopify account.
The main benefits of Shopify Shipping
Overall, the main benefits of Shopify Shipping can be summarized in the table below.
- Free Use – Shopify Shipping is included for free on all plans. No installation is required.
- Easy setup – Shopify is known for its clean and easy-to-use interface, and Shopify
- Shipping is no exception. Setup is quick and easy.
- Shipping discounts – Shopify has negotiated special shipping discounts for Shopify sellers. More on that later.
- Label Printing – Shopify Shipping is compatible with popular label printers, allowing you to quickly print labels for shipping in bulk.
- Real-time shipping quotes – Shopify is tightly integrated with USPS, UPS and Canada
- Post, so you can get accurate shipping quotes at checkout based on product weight.
- Direct integration with Shopify – You can ship your orders directly in the Shopify backend. No need to log in to a third-party site.
- Shipping paid by Shopify account – Instead of having to pay a separate shipping bill, it’s paid by the same monthly Shopify subscription account.
- Shipping Insurance – Shopify Shipping allows you to purchase up to $5,000 worth of insurance coverage on shipments from the U.S.
- Address verification – Shopify checks and flags addresses that were entered incorrectly or don’t exist.
Discounted Shopify Shipping rates
Shopify Shipping advertises discounts of up to 71% on shipping for USPS, UPS, DHL, Canada Post and Sendle. But it’s important to understand that these discounts are based on “price at entry.”
If you physically walked into a UPS store, you’d pay a lot more because the price is based on a one-time shipment. But in e-commerce, no one ever pays a “price to enter”!
Just by signing up for a free account with UPS, you instantly get shipping discounts when you print labels online.
For example, our UPS express shipping rates are almost 60% lower than our “price on entry” and we don’t do that much volume.
Regardless, Shopify Shipping can save you money as a brand new seller, and the level of savings increases with Shopify’s higher rate plans.
I took the following table directly from the Shopify website. Take these discounts with a grain of salt because they are based on very favorable scenarios.
In other words, you’ll never see such high discounts in practice. Also, shipping prices very often fluctuate.
Nevertheless, this table can give you an idea of how much you can save depending on your Shopify pricing plan.
Editor’s Note: I’m sure the USPS discounts negotiated by Shopify in the table below are exaggerated. USPS usually doesn’t allow price negotiation unless you’re Amazon:).
As your order volume grows, you should consider using your own UPS, USPS and DHL shipping accounts to create a history with these companies.
Once you establish a shipping history, you can negotiate lower rates than Shopify Shipping by competing multiple carriers against each other.
For our store, we compare prices and renegotiate UPS and FedEx rates quite often, which usually results in lower negotiated rates than Shopify Shipping.
Disadvantages of Shopify Shipping
Overall, Shopify Shipping is a great starter shipping tool, and it’s not bad for the price because it’s free.
But here are the disadvantages of Shopify Shipping.
- Shopify Order Processing Only – Shopify Shipping only works for Shopify orders, period. If you’re only selling on Shopify, it may not be a big deal. But if you sell on Amazon, Etsy, Ebay or Walmart, you’ll need a different solution.
- Poor international support – Shopify Shipping only works for the U.S., Canada and Australia. Technically, Australia isn’t very well supported as they only integrate with Sendle:) If you’re ordering in other countries, you’re pretty much out of luck.
- Limited bulk printing capabilities – Shopify Shipping only allows you to print 20 labels at a time, which is extremely limited. Again, this limitation may be fine for a very small store, but for any large enough store, it is a critical factor.
- Lack of automation – Shopify Shipping is great for printing a small number of vanilla shipping labels. But other services allow you to create automated printing rules and automation. For example, Shipping Easy allows me to batch all packages of a certain weight to California with FedEx One Rate at the click of a button.
- No Letter Package support – If your envelope is thinner than .25 inches, you can’t use Shopify Shipping.
- No support for large packages – If the total dimensions of your package (length + width + height) exceed 84 inches, you won’t be able to use Shopify Shipping.
- No support for irregularly shaped packages – If your package is not rectangular, you won’t be able to use Shopify Shipping.
- No FedEx integration – Shopify Shipping does not integrate with FedEx.
Deal breaker – why you shouldn’t use Shopify Shipping
Of all the disadvantages listed above, the biggest obstacle (in the United States) is the lack of FedEx support.
Once you start your e-commerce store, you’ll find that the cheapest express shipping option will be FedEx One Rate for many of your packages (depending on what you’re selling).
If you can put your order in one of the Tyvek packages or FedEx One Rate boxes, FedEx One Rate will be cheaper than USPS Priority Mail and most UPS shipping options, and will be fast and reliable!
In addition to the lack of FedEx support, the 20 shipping label limit is also a major hurdle for an online retailer handling any volume.
Finally, if you live in any country outside of the U.S. and Canada, Shopify Shipping is not suitable because it has no built-in carrier support.
If any of these limitations apply to you, you MUST sign up for a third-party shipping software service!
How much can you save by using FedEx as an option
Here’s a fact that most delivery services won’t tell you. The only way to get lower shipping rates is to pit competing services against each other.
When your store sends more than a few hundred packages a month, you can take your UPS bill, show it to a FedEx representative, and ask him to beat it.
Then you’ll take the new FedEx bill to the UPS representative and ask to have it re-billed.
This process continues until one of the carriers gives up the competitive price.
This negotiation process should be done at least once a year, and you almost always end up with a better deal. In fact, we regularly switch from FedEx to UPS and back depending on who is cheaper.
Some years, FedEx is willing to go for a better deal. Other years, UPS is more eager for your business. It all depends on the situation.
But if you are limited to one carrier, you will always pay more. I guarantee it!
FedEx One Rate will also save you money. Right now, FedEx One Rate is the cheapest way to get two-day shipping nationwide, if.
- Your order fits in a FedEx One Rate Tyvek package.
- Your order weighs more than 2 pounds and fits in a medium-sized FedEx One Rate box.
USPS Priority Mail is closest in price to FedEx One Rate, but it is much less reliable and slightly more expensive.
For example, shipping a FedEx Tyvek bag across the country would cost us $9.20 for two-day delivery. And an equivalent USPS Priority Mail package would cost us $12.
In the end, the secret to low shipping prices is flexibility and willingness to negotiate!
Alternatives to Shopify Shipping
Although Shopify Shipping is free with any Shopify subscription, you’ll lose money in the long run by paying higher shipping rates.
The lack of FedEx support prevents you from using FedEx One Rate, which is crucial for many e-commerce stores.
Also, the restriction of printing “20 labels at a time” will waste time and reduce your productivity.
Finally, if you sell anywhere outside of Shopify, you’ll need an alternative to Shopify Shipping. And if you live outside of the US and Canada, Shopify Shipping is a non-starter.
As a result, you should sign up for a third-party shipping service as soon as possible. Each service mentioned below offers the same or better discounts as Shopify Shipping, with no restrictions.
Alternative #1: ShippingEasy
ShippingEasy is my number one recommendation for new sellers with limited budgets in the US because they have the cheapest starter plan.
For just $5/month, you can ship up to 50 shipments a month and have access to the same or better shipping discounts as Shopify.
In addition, you can integrate Shipping Easy with virtually all shopping carts and marketplaces, including
- Amazon
- Ebay
- Etsy
- Walmart
- Wish
- Bonanza
- Jane
- NewEgg
- Yahoo
- Reverb
- TopHatter
- Sears
- Eleventh Avenue
- Jet
- Sassy Steals
- Auctiva
- Powersports
The only drawback of Shipping Easy is the limited international support. The list of carriers is limited to
- USPS
- FedEx
- UPS
- DHL
But if you initially plan to sell only in the US and sell on marketplaces like Amazon, Etsy, and Ebay, ShippingEasy is your most economical choice.
Alternative #2: ShipStation
ShipStation is probably the most comprehensive shipping software solution, but it’s a little more expensive to start with.
For $9/month, you can do up to 50 shipments a month. In addition, ShipStation has all the features that ShippingEasy and Shopify Shipping have, and even more.
The main advantage of ShipStation is that it supports international carriers.
Unlike Shopify Shipping and ShippingEasy, ShipStation supports almost all carriers in Australia, Canada, France, New Zealand, the UK and the US!
They also support all major shopping carts and marketplaces around the world. Overall, ShipStation is the market leader when it comes to shipping software, and we highly recommend it.
When to switch to an alternative to Shopify Shipping
As a new Shopify store owner, you may want to start with Shopify Shipping because it’s free and easy.
To set it up, you need to update your shipping address in the Shopify backend and add the shipping services you want to support.
For most new sellers in the U.S., a combination of USPS and UPS is enough to get you started.
Then you need to specify the weight for each product you sell in your store to calculate real-time shipping rates.
To make the real-time shipping calculation more accurate, you must also set the weight and dimensions of your packaging materials by creating a “default package” in Shopify Shipping.
Shopify will use these dimensions (and weight) to calculate the actual shipping cost for customers.
Note: Shopify only allows 1 default package size, so the real-time cost may not be accurate. If you need more flexibility in selecting box sizes, you’ll need to use third-party shipping software.
Finally, you need to purchase a supported label printer and you’re ready to ship. Here’s a list of compatible printers!
- Dymo LabelWriter 4XL.
- Rollo label printer
- Brother QL-1110NWB label printer
When your store generates several hundred shipments a month, or if you plan to sell on multiple marketplaces, you should switch to Shipping Easy or ShipStation.
At this point, you should also find a dedicated shipping representative at UPS and FedEx and begin the negotiation process.
Subscribing to a third-party shipping app usually costs between $5/month and $100/month, but the long-term savings are easily worth it!
