InstagramWork out net shipping per order
- Net shipping is what the store pays the carrier minus what the customer pays for shipping. Use both figures from the same period.
- Take the carrier cost from the shipping invoices or the fulfilment report, not from the rate card.
- Add return shipping and any handling fee the client pays for returns, and say so in the report.
Put it into the margin
- Subtract net shipping from the order's margin, along with the cost of goods and the payment fees.
- Calculate it by order size band, not only as an average. Small orders often carry a much larger share of shipping per 100 of revenue.
- Show how many orders sit just above the free shipping threshold, and what margin they leave after shipping.
Made-up scenario: an order of 25 costs 12 in goods and 4 in net shipping, leaving 9, or 36 percent of revenue. An order of 90 costs 40 in goods and 4 in net shipping, leaving 46, or 51 percent.
Use it in the break-even
- A single break-even ROAS built on average margin can be wrong for small orders. Check it for the order size the campaign actually sells.
- A campaign that pushes buyers into bigger baskets can lower shipping per 100 of revenue. Note it, but count it as a gain only after several weeks of orders show it.
What to write in the client report
- Net shipping per order, averaged and by size band, with the period and the source of each cost.
- The share of orders that qualify for free shipping, and the margin on orders just above the threshold.
- Any change to rates, thresholds or the carrier in the period, with its date, so the trend can be read.
