Shipping Cost as Percent of Revenue

Free shipping offers, carrier rate increases, and lower order values all show up here first. Report both gross and net of shipping revenue so the trade-off is visible.

Net shipping cost % = (outbound postage − shipping fees collected) ÷ net revenue × 100

How do I calculate net shipping cost as a percent of revenue?

Subtract the shipping fees customers paid from your total outbound postage, then divide by net product revenue. This shows how much of your free or discounted shipping you are absorbing.

• Fulfillment Cost as Percent of RevenueThe share of net revenue spent on warehousing and order fulfillment, including storage, receiving, pick and pack, and packaging, with outbound postage either included or reported separately.
• General Rate IncreaseA carrier's annual list-price increase, typically announced in the fall and effective in January.
• Average Order ValueThe average amount of revenue per customer order over a period, calculated by dividing total order revenue by the number of orders.
• Rate ShoppingAutomatically comparing carrier and service options for each shipment and selecting the cheapest that meets the delivery promise.