Shipping Cost
What getting orders out the door costs you, before it comes off your profit.
What it means
Shipping Cost is the estimated cost of getting your orders out the door for the period, in euros. It's an estimate the app calculates from the shipping rules you configure on Cost Settings — not a carrier invoice — so it's exactly as accurate as what's been entered there. The same figure expressed as a share of Total SalesTotal SalesYour true top line and the anchor for every efficiency metric. is % Shipping Cost.
Show the math
Formula and a worked example
The shipping rules live on Cost Settings, one per shipping country. Each is either a fixed rate per order or a set of weight bands, and each carries a start date — change a rate today and last quarter keeps the rate it was calculated with.
There's a second option: Use Shopify shipping charges as shipping costs, which takes what customers were charged for delivery as the cost instead. Only pick it if those two numbers really are the same in your shop.
Worked example. May ships 1,200 orders. Germany takes 800 at a €4.20 fixed rate, France 400 at €5.50. Shipping Cost = (800 × 4.20) + (400 × 5.50) = 3,360 + 2,200 = €5,560. Per parcel, that's €4.63.
That €5,560 is then subtracted on the way from Total Sales down to Contribution Profit, alongside product cost, taxes and ad spend.
It answers the question
What did fulfilment take out of this period? It's the one variable cost that lands per parcel rather than per euro of revenue, which is why it hurts small orders far more than large ones.
Why it matters
It comes off profit at full strength. There's no markup sitting in front of it to absorb the hit, so every euro here is a euro off Contribution ProfitContribution ProfitWhat each sale contributes before fixed costs., and a rate that's €1 out across 1,200 parcels is €1,200 of profit you've misread.
Because it's an estimate, it's also the line most likely to be quietly wrong. A country with no rule configured contributes nothing at all to the total, which reads on the page as free shipping rather than as a missing setting.
What good looks like
There's no universal euro figure — it scales with your order count, your weights and where you ship. Judge it against the parcels that produced it.
Divide Shipping Cost by OrdersOrdersA simple, powerful demand signal; watch its trend. to get your cost per parcel, then hold that against your last real carrier invoice. If the two disagree, it's the rules on Cost Settings that need changing, not the carrier. That reconciliation is worth doing once a quarter, because nothing in the app will flag a stale rate for you.
How to improve it
| Lever | What you do | Expect | How long | Watch out for |
|---|---|---|---|---|
| Fast Reconcile the configured rate against a real invoice | Compare cost per parcel here with what the carrier actually billed last month, country by country | The number moves to the truth, in either direction | Same week | Correct an under-set rate and Contribution Profit drops the same day. The money was always leaving — you were only failing to count it. |
| Fast Stop splitting orders across parcels | Hold multi-item orders until they can go in one box instead of shipping each line as it's picked | Fewer parcels for the same revenue | 2–4 weeks | Customers wait for the slowest item in the basket, so delivery complaints and cancellations rise before the saving shows up here. |
| Slow Move from one flat rate to weight bands | Replace the single fixed rate per country with bands that match what the carrier actually charges | The estimate starts tracking reality per country | 1 quarter | Setup work for every country, and heavy products stop being subsidised by light ones — some lines will look far less profitable than they used to. |
| Slow Right-size the packaging | Cut box sizes so you stop paying volumetric weight on air, then update the weight bands to match | A lower cost per parcel on the same orders | 1 quarter | New packaging tooling and stock is money up front, and thinner protection means more damage claims and more refunds. |
Every lever costs something somewhere. The last column is the one to read twice.
Read it with
This number moves for two unrelated reasons — how many parcels you sent, and what each one cost. Reading it beside your order count separates them.
Growing, and paying for it
More parcels cost more money, which is the system working. The only question is whether the cost grew faster than the orders did.
Paying more to send less
Fewer parcels and a bigger bill. Either the baskets got heavier, the destinations got further away, or someone updated the rules on Cost Settings.
More parcels, less money
The best corner and the rarest — consolidation, a better rate, or a shift towards cheap destinations. Rule out a cleared rate before you celebrate it.
Smaller and cheaper
You sent fewer parcels, so you paid less. Nothing here says anything about efficiency until you divide by the orders.
The euro amount and the share of sales it represents. The percentage rising while the euro figure holds flat means your sales fell, not your costs — a distinction that decides whether you call the carrier or look at the marketing.
This is one of the lines subtracted to reach that figure, so the pair tells you how much of your profit problem is fulfilment. Contribution Profit falling while Shipping Cost holds means the cause is elsewhere — product cost, discounting or ad spend.
Common misreads
It's an estimate built from the rules on Cost Settings. It matches the invoice only for as long as someone keeps it matching, and nothing will tell you when it stops.
A country with no configured rule contributes nothing to the total. Check that every country you ship to has a current rate before you read a low number as good news.
The rate is one of three inputs. More orders, heavier baskets or a shift towards distant destinations all raise the total on an unchanged rate. Divide by Orders first.
Also called
Fulfilment cost · delivery cost · postage and packaging · cost to serve
See yoursYour Shipping Cost for the period, country by country, next to the sales and orders it was calculated against.
Open Shopify Profit →