Shipping cost eats margin
Community signal
Shipping is a per-order variable cost. Heavy, far, low-price or returned orders can quietly turn profit into loss.
In real life: A low-price heavy item ships across the country; the shipping cost is more than the margin on the sale.
Shopify / DTCShopeeTikTok ShopLazada
Data you need
- requiredShipping cost per order. Carrier charge you actually paid.
- optionalShipping charged to customer. To see net shipping recovery.
- optionalOrder weight / zone. To find which orders are structurally unprofitable.
Formula
Net shipping
Shipping Charged - Shipping PaidNegative means you subsidise delivery on that order.
Key insight
- A single free-ship promo can flip thin-margin SKUs to a loss.
- Returns pay shipping twice with no revenue.
Action checklist
- 1Compute net shipping per order · medium · 30 min
Charged minus paid, line by line. - 2Find the order types that lose on shipping · easy · 20 min
Heavy, far, low-price, COD-return. - 3Set a free-ship threshold or surcharge · medium · 1 day
Protect the orders that bleed.
Money impact · Protect margin
Recovers under-charged delivery cost on the order types that structurally lose.
Recovered = Σ negative net shipping you fixCommon mistakes
- Using a blended monthly shipping average instead of per order.
- Ignoring return shipping entirely.
How Okiela helps
Per-order cost accruallive
Okiela accrues shipping per order in the waterfall, including refunded orders.
Trust & sources
- Community signalShipping-as-margin-leak is a common DTC and SEA pain
Last reviewed 2026-06-22 · Confidence 4/5