The verdict in three sentences
Delivery fees are not a detail: badly set, they erase margin or scare the customer at checkout. The winning 2026 method combines a clear flat rate per zone, a free-shipping threshold that pushes the basket up, and pricing that stays close to real cost. Never subsidise shipping blindly — measure real cost per zone before setting a rate.
Real cost vs charged rate by zone
The classic trap: charging one flat rate while real cost varies threefold by zone. 2026 orders of magnitude for Lagos.
| Zone | Real delivery cost | Customer rate | Margin on delivery |
|---|---|---|---|
| Island / CBD | 1 000 NGN | 1 500 NGN | +500 NGN |
| Mainland core | 1 500 NGN | 2 000 NGN | +500 NGN |
| Outer mainland | 2 200 NGN | 2 500 NGN | +300 NGN |
| Far suburbs | 3 000 NGN | 3 000 NGN | 0 NGN |
| Relay point | 700 NGN | 1 000 NGN | +300 NGN |
A single 2 000 NGN rate would lose you 1 000 NGN on every far-suburb order while overcharging the CBD. Zone-based flat rates protect margin on both ends.
Pricing models and their effect on the basket
Each model sends a different signal to the customer. The free-shipping threshold is the strongest lever on average basket size.
| Model | How it works | Effect on basket | When to use |
|---|---|---|---|
| Flat rate per zone | Fixed price by zone | Neutral | Recommended base |
| Free shipping > 25 000 NGN | Free above threshold | +20 to 30 % | Grow the basket |
| Weight-based | Rate per kg | Neutral | Heavy products |
| Free delivery | Absorbed in product price | +conversion | High margins |
| Tiered rate | Drops for multi-item | +units/order | Cross-sell |
The free-shipping threshold should sit about 30 to 40 % above your current average basket: high enough to prompt one more item, low enough to stay reachable.
Mini case study
Emeka runs an online deli in Lagos, average basket 18 000 NGN, average real delivery cost 1 800 NGN. He sets free shipping at 25 000 NGN. Measured over 3 months: the average basket rises to 23 500 NGN (+30 %).
On 400 orders/month, added revenue is 400 x 5 500 = 2 200 000 NGN/month. He covers delivery on roughly 45 % of orders (those above threshold), i.e. 180 x 1 800 = 324 000 NGN absorbed. Net: +1.87 million NGN gross margin after paying for free deliveries. The threshold pays for itself many times over.
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FAQ
Should I charge delivery at real cost?
Close to real cost, yes, with a small safety margin per zone. Charging below real cost eats your product margin; charging too much causes checkout abandonment.
Where should I set the free-shipping threshold?
Around 30 to 40 % above your current average basket. If your basket is 18 000 NGN, a 25 000 NGN threshold nudges the customer to add an item without discouraging them.
Is a single flat rate a bad idea?
It's simple but dangerous: it overcharges nearby zones and loses money on far ones. Zone-based flat rates are almost always more profitable.
How do I handle unprofitable far zones?
Charge full real cost, offer the relay point as a cheaper alternative, or set a longer delivery window to batch routes and halve the cost.
Does free delivery really boost sales?
Yes, it improves conversion, but only if your product margin absorbs it. Reserve it for high-margin categories or use the free-shipping threshold instead.
Let's talk about your project. We configure your zones, thresholds and automatic fee calculation inside your store. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
