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Canadian Shipping Policy & Margin Calculator

Shipping Policy Builder
Beta
This tool is in beta. The math models what should happen at your numbers. Real carrier invoices, real conversion lift, and real customer behavior will vary. Treat the output as directional. If a number does not match your invoice, your invoice wins. Found something off? Tell us at partnparcel.com/contact-us.
Step 1 of 6

What are you actually trying to fix?

Your answer changes which policy gets recommended and what we tell you to charge. Pick the one that sounds most like your situation.

Stop losing money on shipping
Every order costs more than it should. You need to find the leak.
Offer free shipping without bleeding margin
Free is what customers expect. You need it to pay for itself.
Get customers to add one more item
A threshold gives shoppers a reason to grow the cart.
Stop checkout abandonment
Surprise shipping costs are the number one reason carts get left behind.
Ship beyond Ontario and Quebec without losing money
BC and the Atlantic provinces cost more. Your policy needs to hold up across the map.
Audit the policy you already have
You set it once. You want to know if it still works.
Step 2 of 6

Your shipping economics

These four numbers are what your policy lives or dies on. Pull them from your last 30 day carrier invoice. Do not guess.

$
What you pay the carrier, not what you charge the customer. Take your last invoice total, divide by the number of shipments. If you use more than one carrier, take a weighted average.
Orders you actually shipped last month.
$
Revenue per order before shipping.
%
Your gross margin on the product, before shipping. If you do not know this off the top of your head, pull it from your last P&L.
Step 3 of 6

Pick a policy type

Six approaches, six different trade-offs. The right answer depends on your numbers and what you are trying to fix.

Flat rate. One charge, every order, every province. Simplest at checkout. Works when your products ship at roughly the same size and weight.
$
Free above a threshold. The single highest leverage move for AOV. Customers close to the line add an item to qualify. The point is to set the threshold high enough to protect margin but low enough to feel reachable.
$
$
Customers stretching to qualify is the whole point of the threshold. Shippo's benchmark data shows 58 percent of consumers add items to their cart to qualify for free shipping when one is offered. Lift on cart size varies by store, category, and how close the threshold sits to your AOV. Start conservative and move it as you learn. Set it to 0 if you want to see the pure shipping math.
By province. One charge, but you see where you make money and where you lose it. Carriers price by distance from your warehouse. Ontario and Quebec are cheap. The Atlantic and the territories are not.
$
By weight. Most accurate when your products vary in size. Adds friction at checkout because customers want a number before they commit. Set both what you charge and what each tier costs you so the margins are real.
Under 0.5 kg
$
$
0.5 to 1 kg
$
$
1 to 2 kg
$
$
Over 2 kg
$
$
Live carrier rates. The exact carrier price at checkout, plus a markup for handling. Most accurate. Adds complexity. Customers sometimes see different rates on different days, which erodes trust if you do not explain why.
%
A small markup covers your handling cost. Pick what feels right for your store.
$
Box, fill, tape, per order.
Always free. The strongest signal you can offer at checkout. It only works if your margins absorb it. Run the numbers before you commit, because the cost shows up at the end of the year, not on each order.
Step 4 of 6

Run the policy through a real checkout

Try your smallest, your average, and your largest typical order. A policy that looks right on paper often breaks at one price point.

$
Try your lowest, average, and highest typical orders.
Enter an order value to simulate the checkout.
Step 5 of 6

Your shipping policy, ready to paste

Plain language a customer will actually read. Paste it onto your Shopify shipping policy page, your FAQ, and your order confirmation email so the message is consistent everywhere. Replace every bracketed placeholder — like [X] business days or [support email] — with what is actually true for your store before you publish. Never promise a delivery timeline you cannot consistently meet.

Finish Step 3 to generate your policy text.
Step 6 of 6

Is your policy actually working?

Plug in this month's real numbers. The benchmark you want is shipping cost as a share of revenue, after what your customers paid you back.

$
$
$
Enter 0 if you offer free shipping on everything.
How we read the number. Under 8 percent of revenue is healthy. 8 to 12 percent is worth watching. Above 12 percent, your carrier rates or your policy need work.

Two levers most Canadian merchants leave on the table

These do not replace your base policy. They sit on top and recover cost without slowing down the checkout.

Shipping protection at checkout
Revenue
Offer optional coverage for lost, damaged, or delayed shipments. Customers feel covered. You collect the fee.
Shipping protection sits on top of your base policy. The customer pays a small fee at checkout for coverage on lost, damaged, or delayed shipments. Industry pricing tends to land between 1 and 3 percent of product value, with platform-based insurance typically at 1 percent and direct-from-carrier closer to 3 percent.3 You can self insure (collect the fee, handle the rare claim, keep what is left) or use a third party such as Route, Corso, Navidium, or Captain. For stores doing 100 plus orders a month, self insuring is usually more profitable. Start with a 1.99 dollar flat option, watch how customers respond, and adjust. Attach rate varies widely by product category and where the offer sits in the checkout flow, so test before you bake the recovery into your model.
Express tier upsell
Conversion
Free standard, paid express. The customers in a hurry will pay for speed and subsidize the rest.
Standard plus express at checkout serves two customer types. 75 percent of consumers say they prefer free shipping over fast,4 but the minority who need speed will pay for it. Price sensitive buyers take the free or low cost option. Time sensitive buyers happily pay for one or two day delivery at full carrier cost, which subsidizes your free tier. Works best when your primary carrier has reliable express service in your top provinces.

Questions Canadian merchants ask about shipping policy

The short answers. Use the tool above for the math against your own numbers.

What is the right shipping policy for a Canadian Shopify store? +
It depends on the ratio between what you pay your carrier and your average order value. Shippo's 2023 benchmark data on mid-market merchants puts shipping at roughly 8 to 11 percent of order value across most categories.3 As a starting point: under 10 percent, a free shipping threshold usually pays for itself. Between 10 and 16 percent, a flat rate or a threshold with a charge below it protects your margin. Above 16 percent, your carrier rates are the problem before your policy is.
Should I offer free shipping? +
Free shipping is the strongest conversion signal at checkout. Extra costs, shipping included, are the single largest preventable reason carts get abandoned.2 62 percent of consumers say they will not buy from a retailer that does not offer free shipping.4 But it only works if your margins absorb it. The right test is annual cost as a share of revenue. Under 8 percent is sustainable. 8 to 12 percent is the watch zone. Above 12 percent and free is eating profit you cannot afford to give up. Most healthy Canadian merchants offer free above a threshold, not on every order.
What is a healthy shipping cost as a percent of revenue? +
For a Canadian e-commerce merchant doing 50 to 500 orders per day, our practical rule of thumb is this: shipping costs under 8 percent of revenue are healthy. 8 to 12 percent is the watch zone. Above 12 percent means either your carrier rates have not been renegotiated in a while, or your policy is undercharging customers relative to what you pay the carrier. Shippo's 2023 benchmark data shows mid-market merchants average about 11 percent across categories, with apparel at the low end (7.8 percent) and sports and outdoor at the high end (10.8 percent).3 ShipStation's Shopify merchant guide describes shipping running 10 to 20 percent of profit margins as the standard band to watch.6
How do I set a free shipping threshold? +
Set the threshold slightly above your average order value so customers feel the line is reachable.5 A common starting point is 115 percent of your AOV, rounded to the nearest five dollars. If your average order is 75 dollars, set the threshold at 90. 58 percent of customers add items to their cart to qualify for free shipping when a threshold is in play,3 so the point is to land close enough that they stretch, but high enough that the orders shipping free still leave you a profit after the carrier cost.
Why do shipping costs vary by province? +
Canadian carriers price by distance. Ontario and Quebec are cheapest because most fulfillment is there. BC and Alberta cost more. Atlantic Canada, the territories, and rural postal codes carry the highest rates because of distance and rural delivery fees. A single flat rate across Canada means you make money in Ontario and lose money shipping to PEI or Newfoundland.1
Do I really need to test the policy at every order size? +
Yes. The policy that looks right on a 75 dollar average order often loses money on a 35 dollar order or eats your margin on a 200 dollar order. Use the simulator above with your three real price points. The one that breaks is the one you fix first.
Sources
  1. Purolator Ground Service Guide. Province cost estimates in the table above are derived from the Purolator Ground residential rate guide for a 0.5 to 1 kg parcel from a Toronto-area origin. purolator.com
  2. Baymard Institute, Cart Abandonment Research. Multi-year cart abandonment studies. Extra costs at checkout, including shipping, are the single largest preventable reason carts get abandoned. baymard.com
  3. Shippo, 2023 E-commerce Shipping and Fulfillment Benchmarks Report. Mid-market merchant data showing shipping cost as a share of order value across categories: 7.82 percent (apparel) to 10.81 percent (sports and outdoor), with an all-category average of 10.95 percent. Also: shipping protection through a platform typically costs 1 percent of product value, direct from carrier averages 3 percent. goshippo.com
  4. Shippo, 2023 State of Shipping Report. Survey of 1,191 e-commerce merchants and 1,000 consumers. 44 percent of merchants spend more than 11 percent of order value on shipping. 62 percent of consumers will not buy from a retailer without free shipping. 47 percent will spend a minimum amount to qualify. goshippo.com
  5. Shippo, Operator's Guide to E-commerce Loyalty. Recommends setting the free shipping threshold "slightly above your AOV or average product price to encourage larger cart sizes." Also: 58 percent of customers add items to qualify for free shipping. goshippo.com
  6. ShipStation, A Shopify Merchant's Shipping Guide. Industry benchmark that shipping costs typically run 10 to 20 percent of profit margins for small to mid-market merchants. shipstation.com

Some figures in this tool, including the suggested AOV-lift slider default and shipping protection attach behavior, reflect Part n Parcel's practical experience with Canadian merchants. Public attach-rate data for shipping protection vendors is not available. Treat every figure as directional. Your invoice is the source of truth.