Shopify Shipping Settings: A No-BS Setup Guide

I spent three hours last week helping a friend set up shipping on her new Shopify store. She'd already watched four YouTube videos and read Shopify's official docs. She was more confused than when she started.

That's because most guides bury the useful stuff under layers of fluff. Here's what actually matters when you're configuring shipping in Shopify — and nothing else.

The Settings Page Everyone Skips Too Quickly

Go to Settings > Shipping and delivery. Most people click in here, see the wall of options, and immediately start Googling. Let's break it down piece by piece.

Shipping Profiles

Shopify uses shipping profiles to group products that ship the same way. Your default profile — called "General shipping rates" — covers every product unless you say otherwise.

Here's when you need a custom profile:

• You sell items that ship from different warehouses
• Some products are oversized and cost more to ship
• You have digital products mixed with physical ones
• Certain items are drop-shipped from a supplier

If all your stuff ships from one place and weighs roughly the same, the general profile is fine. Don't overcomplicate it.

Shipping Zones

Zones are geographic regions you ship to. Shopify pre-creates a "Domestic" zone and a "Rest of world" zone. Most stores need more granularity than that.

A good zone setup for a US-based store looks like this:

You can get more specific — some stores break the Continental US into East/West for weight-based pricing — but the table above covers 90% of cases.

Rate Types: Which One Is Right for You

This is where most people get stuck. Shopify gives you three options, and picking the wrong one costs you money every single day.

Flat Rate Shipping

You set a fixed price. $5.99 for standard, $12.99 for express. Simple.

When it works: You sell items that are roughly the same size and weight. T-shirts, books, small accessories. The margins are consistent enough that a flat rate averages out over time.

When it doesn't: You sell a mix of lightweight earrings and heavy ceramic vases. A $7.99 flat rate eats your margin on the vases and overcharges on the earrings.

Calculated (Carrier) Rates

Shopify pulls real-time rates from USPS, UPS, FedEx, or DHL at checkout. The customer sees exactly what the carrier charges (plus your markup, if any).

When it works: Wide range of product sizes/weights, high average order values where customers expect accurate shipping, or when you're on Shopify's higher plans that include this feature.

When it doesn't: You're on Basic Shopify (you'd need a third-party app). Or your products are so light that calculated rates look silly — nobody wants to pay $4.22 for shipping. Round numbers convert better.

Here's a detail most people miss: Shopify's calculated rates use the carrier's retail rates, not the discounted rates you might get through Shopify Shipping. You can adjust this with a percentage markup or markdown in the settings.

Weight-Based or Price-Based Rates

You create tiers. Orders 0-1 lb ship for $5, 1-3 lb for $8, and so on. Or orders under $50 pay $6.99, orders over $50 ship free.

This is what I recommend for most stores starting out. It gives you control, it's predictable, and you can dial it in over time based on your actual shipping costs.

Here's a weight-based rate table that works well for small to medium products shipping domestically:

Adjust these based on your actual carrier costs. Pull your last 30 days of shipments, average the cost per weight bracket, and add 10-15% margin.

Free Shipping: The Strategy That's More Nuanced Than "Just Offer It"

Every marketing blog says "offer free shipping!" like it's a magic switch. It's not. Free shipping costs money — your money. The question is whether the increased conversion rate covers that cost.

Here's how to think about it:

Your average order value (AOV) matters more than anything. If your AOV is $80 and your average shipping cost is $7, that's 8.75% of revenue. You can absorb that or bake it into product pricing. If your AOV is $20 and shipping is $7, that's 35%. Much harder to swallow.

The Free Shipping Threshold Trick

Set your free shipping threshold at 20-30% above your current AOV. If your AOV is $45, offer free shipping at $59. This does two things:

Customers add more to their cart to hit the threshold

You only eat the shipping cost on larger orders where the margin supports it

In Shopify, set this up as a price-based rate: $0 shipping for orders over $59. Then set your standard rates for everything below.

Conditional Free Shipping

You can also limit free shipping to specific zones or shipping speeds. Free standard shipping on orders over $59, but express still costs money. This is configured in the rate conditions within each zone.

Shopify Shipping Labels: The Built-In Discount

If you're not using Shopify Shipping for labels, you're probably overpaying. Shopify negotiates carrier discounts that you get automatically:

You buy and print labels directly from the Shopify Orders page. The cost gets deducted from your Shopify balance or charged to your card.

One thing that trips people up: the discounted rates through Shopify Shipping are different from the calculated rates shown at checkout. You might show the customer $8.99 at checkout (your weight-based rate) and then pay $5.40 for the actual label. That $3.59 difference is your margin on shipping.

Package Settings That Save You Money

Under Settings > Shipping, there's a "Packages" section. Add your actual box sizes here.

Why does this matter? If you use calculated rates, Shopify uses these dimensions to get accurate quotes. If you use flat/weight rates, it still matters for label purchases.

Common package sizes to add:

Don't forget USPS flat rate boxes if you use them — Priority Mail Flat Rate Small, Medium, and Large. The rates are fixed regardless of weight, which is great for heavy small items.

Local Delivery and Pickup: The Options People Forget

Shopify has built-in local delivery and in-store pickup. If you have any local customer base, turn these on.

Local delivery lets you set a radius (by zip code or distance) and offer delivery for a flat fee or free. If you're a bakery, florist, or any business where same-day matters, this is gold.

In-store pickup is free and easy to set up. It reduces your shipping costs to zero for local customers and gets them in your door.

Both options appear at checkout automatically when the customer's address qualifies.

The Mistakes I See Over and Over

After helping dozens of stores with their shipping setup, here are the patterns:

Mistake #1: Not setting up all your zones. Someone in Puerto Rico adds items to their cart, gets to checkout, and there's no shipping option. They leave. You never know they existed. Set up your zones before you launch.

Mistake #2: Forgetting to add product weights. If you use weight-based rates or calculated rates and your product weights are all zero, every order shows the lowest rate. You eat the difference. Go to each product and add accurate weights.

Mistake #3: Over-engineering it. I've seen stores with 47 shipping zones and custom profiles for every product category. Start simple. You can always add complexity later.

Mistake #4: Ignoring shipping after setup. Your costs change. Carriers adjust rates every January. Review your shipping settings quarterly. Compare what you charge to what you pay. Adjust.

Mistake #5: Not testing checkout. Place a test order. Use different addresses. See what rates appear. I'm constantly surprised by store owners who've never seen their own checkout from a customer's perspective.

Third-Party Shipping Apps: When You Need Them

Shopify's built-in shipping handles most cases, but sometimes you need more:

My rule: don't install an app unless Shopify's built-in options genuinely can't do what you need. Every app adds cost, potential conflicts, and another thing to maintain.

Shipping Notifications: The Part Customers Actually Care About

Under Settings > Notifications, make sure your shipping confirmation email is solid. Customers don't care about your zone setup or rate strategy. They care about one thing: "Where is my package?"

Customize these templates:

• Shipping confirmation — include tracking number and carrier name prominently
• Out for delivery — if your carrier supports this trigger
• Delivered — close the loop, ask for a review

The default Shopify templates are okay but generic. Spend 20 minutes personalizing them with your brand voice. It reduces "where's my order" support tickets by 30-40%.

Quick Setup Checklist

If you want to get shipping configured and move on with your life, here's the order:

Add your shipping origin address (Settings > Shipping > Shipping origin)

Set up zones (start with domestic + your top 2-3 international markets)

Add rates to each zone (weight-based is the safest starting point)

Enter product weights for every item in your catalog

Add your box/package dimensions

Enable Shopify Shipping for label discounts

Set a free shipping threshold (optional but recommended)

Place a test order to verify everything

Set a calendar reminder to review in 90 days

That's it. Shipping setup isn't sexy, but getting it wrong is one of the fastest ways to bleed money or lose customers. Do it once, do it right, and then go focus on the parts of your business that actually excite you.