Offering free shipping is a proven way to boost conversion rates, but for many merchants with lower-priced products, it isn’t always feasible or expected by customers. In these cases, the goal shifts to providing the most affordable eCommerce shipping rates possible to maintain sales without subsidising costs significantly.
Most online stores aim to keep shipping at a flat rate of around $10 or less. To achieve this, many retailers end up subsidising the shipping cost by approximately $2–$3 per order. While this is a much smaller burden compared to covering the full shipping expense, eliminating or reducing this cost further can improve overall profitability.
To lower costs effectively, a combination of shipping providers such as Sendle and Australia Post (AusPost) is often the best approach. Both offer band-based pricing incentives to encourage loyalty, but neither is a one-size-fits-all solution. Sendle typically offers the most competitive rates for metro-to-metro deliveries but can become costly for regional or remote locations. On the other hand, AusPost provides reliable national coverage, which can be more cost-effective for reaching customers in less populated areas.
For merchants shipping smaller products, flat-rate packaging options from both providers offer discounts compared to using custom packaging. Examples include the AusPost Flat Rate Small Satchel (5kg) and the Sendle Unlimited Satchel, which allows any weight to be shipped at the 500g rate, provided it fits in the Sendle-branded satchel.
While most merchants are based in metro areas and ship to both metro and regional locations, there is a growing trend of businesses operating from regional areas. For these sellers, drop-off options with Sendle or using couriers like Aramex can be an efficient and cost-effective shipping alternative.
By carefully selecting a mix of shipping options and leveraging provider discounts, Australian ecommerce businesses can minimise costs while maintaining competitive shipping rates for customers.