How to Set Up Calculated Shipping Rates on Etsy

One of the biggest areas of concern and confusion for new Etsy sellers is how to price their shipping. There are a few different strategies for determining your shipping prices, but we won’t get into that too much in this post. I am going to walk you through the steps for how to set up Calculated Shipping rates for your Etsy shop. This is what I do in my own shop as I feel that it is the fairest, most transparent and cost effective way to charge my customers for shipping. If you want to offer free or flat rate shipping, those are options as well and there are different steps for setting those up.

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Etsy Shipping Profile Types

There are two types of shipping profiles that you can create for your Etsy shop: Calculated or Set Rate. You can even do a mix of the two if you have some items you’d like to ship flat-rate and others you’d like to use calculated rates.

Fixed Price Shipping Rates

This shipping profile uses a specific shipping price that you set per item. This price can be different for each product listing. You can also set a separate fixed price for additional items. That means when a customer orders more than one item, they won’t be charged the full shipping price of each item. Instead they’ll be charged the full price of the item with the higher shipping price and the add-on price for the other items.

The main disadvantage of these shipping rates is that can’t take into account your customer’s location. The location can severely impact the shipping cost especially if you live in or ship to Canada, whose shipping rates vary significantly across our large and spread out country. You will need to average out the price so customers who live close by may pay extra and customers across the country don’t pay enough.

Calculated Shipping Rates

If you use calculated shipping rates, Etsy uses the size and weight of your items to determine which box size will fit the entire order. It then uses the box dimensions and total weight to determine the shipping cost, based on the actual postal rate. The postal rate depends on the shipping method that the customer chose and their location. This is the most accurate shipping price and will essentially charge your customer the same price that you have to pay to purchase the shipping label.

You can add a handling fee so that the customer’s shipping price also covers extra shipping costs such as packaging materials, Etsy fees, etc.

For the most accurate shipping costs, you can now link your Canada Post Solutions for Small Business Account to your Etsy shop and Etsy will then use your discounted rates for the shipping calculations.

Note: At this time, Calculated Shipping rates are only an option for Etsy shops in Canada and the United States.

How to Set Up Calculated Shipping on Etsy

There are two ways to add a new shipping profile on Etsy. You can either do so while editing a listing or go to the Settings page and create a new profile there. For this tutorial, I am going to create the profile from the Settings page. The instructions and photos will show this being done on a computer, but you can also do this on the Etsy App.

Step 1 – Add Profile

While logged into your Etsy Account in the Shop Manager Page, select “Settings” from the Main Menu and then choose “Delivery Settings”. This will bring you to the Delivery Settings page, with a new menu across the top of the screen. You should be on the “Delivery Profiles” tab.

Click the black button in the top right to “+ Add Profile“. This will open a pop-up screen with all of the fields to be filled out about your new shipping profile.

Step 2 – Create Profile

Fill out each of the fields below.

Postage Prices

From this drop-down menu, choose “Calculate them for me” to use calculated shipping rates.

Origin Post Code

Enter your postal/zip code. This is where your packages will be sent from.

Processing Time

This is where you specify how long it will take you to make and ship out this item. You can change this timing as your production speeds up or slows down. For now, set it at your current processing time. Either choose a set range from the drop-down menu or choose “Custom Range” to enter your own timing if none of the menu options work for you.

To set a custom range, first select the number for the start of your timing and then select the number for the end of your timing. Now select the bubble beside either “days” or “weeks” to set your units. (Ex. First number set to 5, Second number set to 7, select “days”. This would be a processing time of 5-7 business days.)

Where I’ll Deliver

Here you’ll select all of the countries where you will ship this item. By default, it will be set to your shop’s country + worldwide. Click the pencil icon “Edit” button on the right to change this. You will now see that every continent is checked. Either unselect the continents you do not want to ship to, or unselect the top button “All Countries” to uncheck everything except your own country. (You have to ship to your own country.) Click the black arrow to the right of any continent to expand into a list of its countries. You can then either select or unselect any countries you’d like. Repeat until only the countries you want to ship to are checked off.

Delivery Services:

This is the section to enable which shipping methods you’d like your customers to be able to choose from at checkout. By default, all of the available shipping methods for your country will be selected. Again, click the pencil icon “Edit” button the right side to change this. The shipping methods are broken down into separate categories. For my Canadian shop, these categories are; Domestic (within Canada), United States, and International. You will need to select at least one from each category you ship to.

All options will be checked – uncheck any options you don’t want to offer. Your customer’s order will default to the cheapest shipping option when they’re ordering and they’ll be able to upgrade to another option from your list if you have more than one enabled.

I only offer tracked shipping options. This is for reliability/accountability and insurance purposes. So I uncheck all shipping methods without tracking. (For Canadian shops, this is all of the “Small Packet” options under USA and International.) There is a short description under each shipping method letting you know if it’s tracked, includes insurance. etc. If you’re not sure whether it includes tracking, look up that shipping method directly on the shipping company’s website (For Canada, see Canada Post. For USA, see USPS’s Domestic or International Options.)

Free Delivery

If you’d like to offer free delivery on either domestic and/or international shipments of this item, check the appropriate box. If you don’t want to offer free shipping, leave both unchecked.

Handling Fee

In this section, you can choose to enter a handling fee. Whether or not to include a handling fee and how much to set it at requires a whole further conversation, so we’ll dive into that in a future post. For now, you just need a basic understanding of what this is and how to enter one.

The handling fee is an extra price added onto the customer’s shipping price. The point of this fee is to account for the extra costs you incur with shipping their order – things like packaging materials, time spent on packaging and post office drop-offs (or pickup fees), label printer, and so on.

If you’d like to add a handling fee, enter the amount per item in this box. This number will be multiplied by the number of items in their order and added onto the calculated shipping price.

Example: Customer orders 3 mugs. Calculated shipping price comes out to $15. Your handling fee is $2 per item. Total shipping price the customer is charged: 3 mugs x $2 + $15 = $21.

You can set separate handling fees for domestic or international orders. To do that, just click beside the box where it says “Set separate fees for domestic & international”. Now two separate boxes will appear for you to enter each handling fee.

Profile Name

Enter a name for your profile so you can easily identify it later. This is just for your use, the profile name won’t show up anywhere for the customer to see.

Now click the black “Save Profile” button to save this new profile and exit this pop-up menu.

Step 3 – Set Package Preferences

For calculated shipping rates to work properly, it needs to know what package sizes you have available. To set these up, go to the “Package Preferences” tab at the top of the current screen.

Make sure the checkbox beside “Use common Etsy package sizes” is unchecked. You don’t want to use Etsy’s list of box sizes for your shipping calculations since you likely don’t actually have boxes that size. That means your actual shipping label may end up costing more than what Etsy quoted.

At the bottom of the screen, click the button “+ Add a package preference”. This will open up the following text boxes.

Preference Name

Enter a name for your first box/package size. (The customer won’t see this name, it’s just for your own reference.) The name doesn’t need to reference the box dimensions/size, but you do need to know which of your boxes this name refers to. On the left side of your Order Receipt, the package name will be printed under the Packaging section so you know which box the order should be packed in.

I like to name the box as the box size, so it’s fully clear to me which box it is. Example: “10x10x6in”.

Package Dimensions

In the next three boxes, enter the length, width, and height of this box. Pay attention to the units beside the box and make sure that your numbers correspond to those units (cm for Canadian shops). Enter the dimensions such that the largest number is entered as the box length.

Click “Save” when finished. Repeat the above steps to continue adding all of your different package sizes.

Note: There are actually two different sets of dimensions for your box: the inner dimensions are those that are printed on the box (ex. 10x10x6″) and indicate whether your items can fit inside. But once the box is packed up, the outer dimensions will actually be larger due to the thickness of the cardboard. The outer dimensions are what you need to use when creating your shipping label. These two sets of dimensions will be very similar, but could be enough of a difference to cause the occasional hiccup with your shipping rates. You’ll have to choose which set of dimensions to enter in this section (or enter something in between).

• If you enter the inner dimensions, make sure to overwrite those with the packed box size when creating the shipping label. With enough discrepancy, the shipping label might cost more than what the customer paid.
• If you enter the outer dimensions, you may run into a situation where Etsy thinks items can fit into that box and choose it for the package size of an order, but when you go to pack the order, you see that the items don’t quite fit because the inner dimensions are a bit smaller. In that case, you’ll have to use a larger box and the cost to ship that may be more expensive than what the customer paid.

Step 4 – Assign Shipping Profile to a Listing

Select “Listings” from the Main Menu. Either choose an existing listing which you’d like to assign to your new shipping profile or create a new listing. Scroll down to the bottom of the listing and find the “Delivery” section.

Find and select your new Shipping Profile from the list of Delivery Options. Then scroll down to find the Item Dimension boxes.

Item Weight

Enter the weight of one item, when packed up to go into the shipping package/box. So if you’re shipping a mug that gets bubble wrapped and put into its own gift box before packaging into the cardboard shipping box, then take the weight of that mug wrapped & gift boxed.

Item Dimensions

Same as above, enter the dimensions of one item when packed up to go into the shipping box. Enter the largest dimension under Length.

If you have multiple variations on this listing that are different sizes or weights, you can only enter one set of dimensions.

Note: If an item is larger than any of your package preferences, Etsy will use the item’s size as the package size.

Shipping Resources

That’s all there is to it! Just repeat the steps above for each new shipping profile you need and then you’re all set to start accepting orders. Now you just need to get ready to actually ship the items once the orders come in. Here are a few links to some of my go-to shipping products to get you started.

• Heavy Duty Packing Tape
• Cardboard Boxes
• Kraft Paper Roll (for filling any voids in your boxes) & Cutting Tool
• Kitchen Scale (for weighing packages)
• Cute Poly Mailers: Try these fun designs:
  • Floral Thank You
  • Hello, I’m what you’ve been waiting for.
  • Geometric Print

Looking for more tips on shipping your products? Check out these posts for How to Save on Shipping Prices in Canada and How to Create Canada Post Shipping Labels.

More Etsy Tips

Need more help with your Etsy shop? Be sure to read the post “How Much Does it Cost to Sell on Etsy?” for a full breakdown and explanation of Etsy Fees. Plus download my FREE Etsy Fee Calculator.