How do I setup the shipping to offer 2 options? a. via USPS, free for orders over $35; and charging a flat-fee of $3.95 for orders under $35. b. via UPS, using UPS real time rates: this option will encompass ground, 2day, next day, etc.
First, you need to set up shipping zones under Settings / Shipping / Edit / Shipping Zones. Then, as you will see, you can have one shipping method per zone. For example, you can have USPS in Zone 1 and UPS in Zone 2. If you have set up UPS real time rates and services to operate in a particular zone, you cannot have another shipping method in that particular zone.
Once you have divided your shipping area into zones, you can specify that USPS shall operate in that zone using tiered_price as your method of shipping cost calculation (Settings / Shipping / Edit). To set up UPS real time rates and services, go to Settings / Edit Compatible Software and sign up for UPS Online Tools and then Check the 4 boxes for UPS Rates & Service Selection, UPS Tracking, UPS Address Validation and UPS Shipping. Then, go back to Settings / Edit Shipping and choose the UPS options you wish to make available for the zone in which you want that option to be available.