Who Pays for Shipping? Delivery Pricing Strategies for a Small Romanian Store

Shipping is where a lot of small stores quietly lose money without noticing. Either you offer "free shipping" and eat it out of your margin, or you charge a fee that scares the customer off right at checkout. Both extremes hurt.

The good news: there's no single correct answer, only the one that fits your products, your average basket, and where you deliver. In this article I'll walk you through the three core strategies — real cost, flat rate, and free shipping — with the upsides, the traps, and a simple way to calculate the threshold above which you can actually afford to give shipping away. At the end you'll have a concrete plan you can apply tomorrow without wrecking your margin.

The three strategies, in short

You essentially have three levers, and you can combine them:

• Real cost — the customer pays exactly what the courier costs you, calculated at checkout by weight or zone. Fairest for your margin, but it can discourage small orders.
• Flat rate — a single amount, say a fixed fee per order, no matter the courier. Easy for the customer to understand and simple to communicate, but you sometimes lose on heavy parcels.
• Free shipping — "free" for the customer, but the cost is hidden in the price or absorbed from your margin. It lifts conversion, but only if you know exactly what it costs you.

Most healthy small stores don't pick just one — they use a threshold: free above a certain amount, flat rate below it. The rest of this article shows you how to calculate that threshold.

Free shipping isn't free for you

When you write "free shipping," someone still pays the courier — you. You have two options: nudge your product prices up slightly to absorb the cost, or take it out of the margin you already have.

The problem shows up when you offer free shipping from the very first cent. On a small order, delivery can swallow almost all your profit, sometimes more than you make on the product. You're essentially paying to sell.

That's why free shipping works best as a reward, not a rule: you offer it above a threshold that guarantees you keep some margin. Psychologically it's also a strong engine — the customer adds one more item to reach the threshold, and you grow the order value instead of losing it.

How to calculate your free-shipping threshold

The formula is simple and you can do it on the back of a napkin. You need three numbers: your average delivery cost, your margin percentage, and how much of that margin you're willing to "donate" to shipping.

Concrete steps:

• Find the real average cost of a parcel with your courier (average your recent orders, packaging included).
• Work out how much margin, in money, you keep on an average basket.
• Set the threshold where the remaining margin comfortably covers the delivery cost and still leaves profit.

Example: if delivery costs you around 18 lei on average and your margin is about a third of the price, then to "cover" shipping from margin alone you'd need a basket above roughly 54 lei just to break even on delivery. So your free-shipping threshold should sit noticeably higher — say around 150–200 lei — so that free shipping stays a gain, not a hole.

Flat rate vs. real cost: when to use each

Flat rate is ideal when your products have similar weights and sizes — cosmetics, books, accessories. The customer sees one predictable number, and you communicate it simply: "delivery is a fixed fee anywhere in the country." The risk shows up with heavy or bulky parcels, where the flat rate doesn't cover the courier.

Real cost (calculated automatically at checkout) fits better when you sell items with very different weights — from a small box to furniture or appliances. It's the fairest for your margin, but the surprise at the end can raise cart abandonment.

The smart compromise, used by many small stores, is layering: flat rate for small orders, free above a threshold, and real cost only for heavy or bulky categories, where it's obviously justified.

Cash on delivery, returns, and the mistakes that eat your margin

In Romania, cash on delivery is still heavily requested, but it carries a hidden cost: the COD fee and the money tied up until it settles. If you absorb it silently, it eats into your margin on every order. Many stores offer a small discount for prepaid card payment — cheaper for you than COD.

Other common traps:

• Returns — with free shipping both ways you pay the courier twice. Spell out clearly in your return policy who covers the return leg.
• Packaging — the box, wrap, and tape are part of the real delivery cost; don't leave them out of the math.
• Remote areas — some couriers charge extra for hard-to-reach localities.

The golden rule: transparency wins. Show the delivery cost from the start, don't hide it until the last step of checkout.

What a healthy, applied strategy looks like

Put it all together and you get a simple system that's easy to communicate:

• A clear flat rate for small orders (a round, memorable number).
• A free-shipping threshold set above your average basket, so it grows order value rather than losing it.
• Real cost only for heavy or bulky categories.
• An incentive for prepaid payment to reduce the COD burden.

The most important thing is that the policy is visible and honest on your site — on the product page, in the cart, and on a dedicated shipping page. A well-built store makes this clear, with no surprises at the end.

If you'd like to put this into practice on a fast, well-thought-out site, at MPO Web Studio we prepare a free demo before you pay anything and we work remotely, anywhere in the country. Message us on WhatsApp anytime and we'll talk through exactly which threshold and rates make sense for your margin.