Shipping Cost Per Order

About this calculator

Every estimate of shipping cost is lower than the invoice. The estimate prices one clean parcel to a normal address; the invoice contains the return legs, the remote-area surcharges, the reattempts, and the parcels that turned out heavier than the product page said.

This works backwards from the invoice. Take what you actually paid over a month and divide by the orders it covered, and you get the number your pricing should have been using all along.

How to use this calculator

1. Add up everything your courier invoiced over a period - a month is usually enough.
2. Enter how many orders you shipped in that period.
3. Add your packaging spend for the same period if you want the full fulfilment figure.
4. Enter how many of those orders were delivered rather than returned, to see the cost the surviving orders have to carry.

The formula

Total spend        = Shipping spend + Packaging spend
Cost per order     = Total spend / Orders shipped
Cost per delivered = Total spend / Orders delivered

The two figures differ by the return rate, and the gap between them is what returns are costing you. Where every order is delivered they are the same number.

Worked example

A seller shipping 800 orders in a month, invoiced ₹85,000, with ₹18,560 of packaging and 680 delivered:

Total spend         = 85,000 + 18,560 = 103,560
Per order shipped   = 103,560 / 800    = 129.45
Per delivered order = 103,560 / 680    = 152.29
Return rate         = 120 / 800        = 15%

A per-parcel estimate for this seller would have said about ₹93. The real figure carried by a sale is ₹152.29 — 64% higher.

Notes and limits

• Include everything the courier billed, surcharges and return legs included. Netting them out defeats the purpose of working backwards.
• A month is the shortest period worth using. A week is too noisy on low volumes.
• Where the figure here is far above your per-parcel estimate, the gap is usually returns, remote-area surcharges, or parcels measuring larger than assumed.
• Use the per-delivered figure in pricing. The returned orders are not going to pay for themselves.
• This measures what happened. To find out why, price a typical parcel and compare.

What this calculation assumes

• The spend and the order count cover the same period.
• The spend includes surcharges and return legs, because the invoice did.
• The cost per delivered order spreads the whole bill across the orders that stayed sold.