MarginKoala

How much is shipping hurting profit?

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Numbers to enter
Compare the shipping amount collected from customers with the shipping cost the business actually pays. The calculation keeps both under-recovery and over-recovery instead of forcing a surplus to zero.
$

Use product/merchandise sales before any separately charged shipping. This is used only to show the shipping impact relative to merchandise revenue.

$

Carrier/freight cost attributable to an average shipment. Add packaging elsewhere unless you intentionally include it here.

$

Enter 0 for customer-free shipping. Use the amount actually charged for shipping, excluding merchandise price.

Koala's Calculated Result
Net shipping contribution or shortfall from the amounts entered.

Add monthly order volume and the shipping cost/collection amounts.

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Frequently asked questions

What does "shipping profit impact" measure?

It measures the gap between what you pay per shipment and what the customer pays — netted across the month. That gap absorbs into your margin whether or not the customer paid anything at checkout.

Shipping Profit Impact

Should shipping be free for the customer?

Free shipping changes the amount the business absorbs per order. Whether it changes conversion or basket size is a customer-response question this calculator does not predict. Use the free-shipping threshold calculation for the unit economics, then test any demand response separately.

Shipping Profit Impact

What if the customer pays exactly what shipping costs?

Net drag is zero — shipping is a wash. The margin question is then "did this order exist at all because shipping was free or flat?" If yes, free / flat shipping still pays for itself at the contribution margin.

Shipping Profit Impact

How accurate is "cost per shipment"?

Use the carrier rate you actually pay, including any residential vs. commercial surcharge, dimensional-weight penalty, signature fee, or zone adjustment. A round average is fine for planning, but a quote per shipment is sharper for tight margin items.

Shipping Profit Impact

Educational use, not financial advice. Numbers are estimates for planning; consult a qualified professional before acting on them.