How Do You Charge for Shipping?

Today, many online businesses struggle when it comes to charging for shipping. It is common for online shoppers to abandon a shopping cart if they encounter higher than expected shipping charges. There are many methods of charging for shipping and handling of an online order and you want to get it right.

How shipping charges are presented to the customer is also very important in helping complete an online sale.

Calculated Shipping Charges

This is one of the most common methods of applying shipping charges. A customer who has added items to a cart will be required to enter their delivery address prior to checkout in order for the system to calculate the shipping charges to the delivery destination. While calculated shipping may appear to be fair, there are some concerns that this method can lead to higher cart abandonment than other methods.
When an online shopper is required to fill in numerous additional form fields prior to their finalizing the purchase, they may choose to not bother and leave. If they complete the necessary form fields and the shipping charges are presented, the customer will do a quick evaluation of the charges and if perceived to be excessive, again, they may leave before completing the purchase. Studies show that up to 30% of abandoned carts are due to the customer finding higher than expected shipping charges.

Another problem with calculated shipping is that it favours local customers who are close by and penalizes customers who may be a greater distance from the shipping point. Is it the customer’s fault that the shipping point is not in their local community?

Threshold Shipping

Threshold shipping is where the online shopper is given the opportunity to reduce or eliminate their shipping costs by increasing the value (threshold) of their order. This is a leading method of increasing sales as many shoppers will choose to increase their order to secure free shipping, however the value must be within reason. It is unlikely that a shopper will increase their order size to save a minimal amount in shipping. Make it worth their while.

Threshold shipping offers store owners a great opportunity to increase sales. On the downside, the shipping calculation is usually required if the threshold is not met. This again can lead to cart abandonment.

Flat Rate Shipping

Flat rate shipping is a very simple method of applying shipping charges to your online orders. This method eliminates the need to collect extra information from your online customer prior to their completing a purchase. Flat rate shipping attempts to generate full recovery of shipping costs based on observed averages.

Here is an example of how basic flat rate shipping charges can be calculated. First, total the shipping expenses for a set period of time, typically annually. Next, add up the total number of orders (shipments) made in the same period. Determine the average cost by dividing the total expenses by the total number of shipments. Next, add an allowance for shipping cost variance or an order handling charge, if applicable.


Annual Shipping Expense: $9,000
Annual Orders/Shipments: 1,200
Average Shipping Cost per Order: $ 7.50
Handling Charge: $ 2.00
Target Flat Rate Shipping Charge: $ 9.50

One significant benefit of Flat Rate shipping is that since you know the rate, it can be presented to the customer up front, avoiding any potential unpleasant surprizes for your customer during the check out process.

Free Shipping

Offering free shipping for online orders is an extremely popular strategy that is gaining greater momentum in the world of e-commerce. Free shipping does not mean an online store loses revenue; it simply means that the online shopper is not presented with a separate shipping charge for their order. In reality, average shipping costs are built into the price of the product so the customer never has to contend with unexpected shipping costs and therefore does not have the opportunity to re-evaluate and possibly cancel the purchase prior to completion.

Online shoppers love the offer of free shipping and this leads to increased sales and the lowest abandoned shopping cart rates.

To learn more about how Kitpak Fulfillment can help improve your e-fulfillment process, contact us today. We will be happy to answer your questions and provide information on how we can help you save money.

1615 Inkster Blvd.
Winnipeg, Manitoba R2X 1R2
(204) 471-8251

Why Choose Kitpak as Your e-Fulfillment Partner

When online businesses grow, order processing and fulfillment can quickly begin to consume a greater percentage of your valuable time, limiting your ability to effectively manage (plan, market, strategize, etc.) some elements of your business. You can become a worker in your business rather than the entrepreneur who must continuously be working on the business. It may be time to find a great e-fulfillment partner to work with. Choosing the right e-fulfillment partner for your business is essential for keeping your customers happy and ensuring your ongoing success.

Kitpak Fulfillment (Kitpak) would like to be your partner of choice, and here is why.

• Kitpak is located in the geographic centre of Canada, making it easy to quickly reach all major centres.
• Kitpak offers a local, Winnipeg based e-fulfillment solution for businesses in Winnipeg.
• We are locally owned and operated and provide personal service to our customers.
• We are not too big or detached like a call center either. You are welcome to visit our warehouse.
• If your product requires special handling or processing, we provide custom or “white glove” service.
• Our order fulfillment software seamlessly integrates with almost any shopping cart.
• Kitpak provides web portal access for visibility of orders, tracking, inventory and reporting.
• We process orders for shipment the same day they are received (some conditions apply).
• Our economies of scale and shared resources can generate significant savings.
• We offer daily shipments to the US border for direct entry into the USPS (US Postal System).
• Kitpak services are scalable to meet the needs of your business now and in the future.
• Kitpak offers a super easy client onboarding process. We handle everything for you!

To learn more about how Kitpak can save you time and money on your e-commerce order fulfillment, visit Kitpak Fulfillment online today to request pricing or contact us to request more information.

1615 Inkster Blvd.
Winnipeg, Manitoba R2X 1R2

(204) 471-8251


How Do You Fulfill Your Online Orders?

If you recently launched an online store or have an existing small online business, you are probably fulfilling the orders you receive in-house, by yourself. Often, this is a good way to start in that you learn what is involved to get an order out the door and what it takes to satisfy your customers. Happy customers will often become repeat customers or they may leave a positive review about you (spreading the word) earning you more sales.

When your online order volume starts to grow, it can become much more difficult to manage the every day fulfillment processes internally. When fulfilling orders starts to consume too much of your available time it can hinder your ability to manage other aspects of your business. Is your valuable time best spent working in your business doing order fulfillment or would it be better spent working on developing your business? If you would like to regain some of your time for more strategic tasks, it may be the right time to seek the services of a reliable e-fulfillment partner.

A good e-fulfillment partner will ensure that your business continues to meet the expectations of your customers by efficiently and professionally managing the entire fulfillment process from the time an order is placed until the time it is delivered to the end customer.

Here are a few of the ways a great e-fulfillment partner can help:

• Seamless integration of your online store with the order fulfillment system
• Provides online portal for viewing transactions, inventory and reporting
• Provides the necessary warehouse space
• Can scale with your business
• Having the correct packaging materials
• Manages the logistics for return orders
• Saves you money by providing
   – Greater economies of scale
   – Sharing of expensive resources
   – Volume shipping rates
   – Professional staff

Customer Expectations

When online shoppers consider making a purchase online, they have high expectations that must be met. The pricing must be transparent and the cost of shipping their order must be reasonable and easy to see. Orders must be processed fast and quickly provided to the delivery service.

If you are considering outsourcing your e-fulfillment and have questions about how to go about it or even if it is the right time to outsource, please contact Kitpak Fulfillment today. We will be happy to answer your questions and provide information on how we can help you save money.

1615 Inkster Blvd.
Winnipeg, Manitoba R2X 1R2

(204) 471-8251


What is e-Fulfillment?

Winnipeg based e-fulfillment services provider Kitpak Fulfillment describes the term “e-Fulfillment” as encompassing all of the resources necessary to fulfill online orders including the process of receiving, inspecting and storing customer inventory, receiving and processing online orders, picking and packing the physical products ordered and shipping the packaged orders to the end customer.

Most small businesses with a product and an online store will first undertake to fulfill internally, the orders they receive online, as it is low cost, easy and transparent. However, as the business grows and orders multiply, many small business owners become overwhelmed with the process of storing, picking, packaging, shipping and tracking orders. Maybe they have simply run out of adequate space to store their products and packaging materials and now they need to invest in additional storage and order processing space, which can be costly.

Some businesses owners do not see the value in spending an ever-increasing amount of their valuable and limited time, working in their business, managing and fulfilling orders. They may realize that their time could be better spent developing and building their business, creating and implementing sales and marketing plans, developing new strategies and meeting customers.

Perhaps the time commitment has begun to interfere with their personal lives making it difficult to get away to visit friends or even to take a much-needed vacation.

At this point, many overwhelmed small business owners will seek the services of a trusted, professional e-fulfillment provider who is well equipped to handle their needs.

What makes a great e-fulfillment partner?

A great e-fulfillment partner will have significant resources and technology already in place, a portion of which will be quickly dedicated to your account with minimal cost, including:

• Warehouse space
• Trained warehouse personnel
• Extensive packaging materials
• Specialized gear / tools (weigh scales, material handling equipment, etc.)
Integrated warehouse management software
• Automation
• Negotiated volume rates with multiple carriers
• Diverse logistics expertise
• Adequate insurance coverage
• Security (online and physical)
Kitting and co-packing services
• Return order processing service

Your e-fulfillment partner will be able to integrate their systems with your online store, making the e-fulfillment process seamless to both you and the end customer. With real-time online access to view both your business and your customer data (orders, inventories, shipments, etc.) your e-fulfillment partner ensures you have the visibility required to successfully manage and grow your business. The cost savings for a growing business will quickly add up by avoiding the cost of renting warehouse space, hiring personnel, acquiring order fulfillment equipment and technology and more. Additional cost savings are often generated through reduced freight costs negotiated with multiple carriers by your e-fulfillment partner.

Having a trusted and capable e-fulfillment partner that is ready and able to scale with your business growth, will provide you with a great competitive advantage in the market, helping your business grow and prosper.

Contact Kitpak Fulfillment today to learn how we can help you grow your business!


1615 Inkster Blvd.
Winnipeg, Manitoba R2X 1R2

(204) 471-8251


Get Started Today

Do you want to simplify your order fulfillment process and take it to the next level? We're ready to take on your project, saving you time and money.