You are right.
Tracking a $10 item is pointless.
Some things are not meant for mail order-- which includes any lowcost item that requires parcel rated shipping *.
So we go on the bases that Letter Post is reasonably fast and secure ,and that most people are honest.
For the times those concepts are wrong, we have Cookie Jar Insurance.
Which is just putting a few virtual pennies from each sale into a virtual cookie jar, for the times things go wrong.
Most sellers find that, especially over time, the Cookie Jar turns into a profit centre. Just like a "real" insurance company.
Another advantage is that CJI covers problems that third party insurance doesn't, like when we sell a red sweater but ship a blue one, or when the customer thinks the red sweater should have been scarlet not cherry. Or the dreaded late delivery.**
Low cost items can be a money loser, unless the normal purchase is of multiples. In my opinion, it is not profitable to ship anything that I was not paid at least $10.00 for.
Some sellers do find that most (though not all) sales will make that $10 minimum. Others will bundle items to make up the needed value.
Some use Free Shipping (DON'T PANIC!) to make the deal feel sweeter.
Which is cheaper?
A $2.49 item with $1.30 shipping or a $3.79 item with Free Shipping?
Which is more profitable?
Five $2.49 sales with $1.30 shipping on the first item and 50c on the other four (total $15.75) or five $3.79 items with Free Shipping (total $18.95)?
Surprisingly, more customers will go for the latter than the former. Not all, but most.
Don't forget to calculate in your monthly Shopify fees as you consider moving.
*Over 500gr or 2cm thickness.
** @byto253 has one answer to that.
