Average Shipping Cost per Order (2024)

FAQs

Average Shipping Cost per Order? ›

On average, a small package can cost about $8, while large packages can cost about $18 to $21 for shipping.” To determine what your individual business shipping rates may be, answer questions such as: Speed: Are you expediting shipping to get the package to your customer quicker?

Industry benchmark for Average Shipping Cost per Order

In e-commerce, shipping costs typically amount to 10-15% of the total order value.

What is Average Cost Per Order? CPO refers to the total cost it takes to acquire and fulfill a single order. Costs can include marketing, manufacturing, storage, shipping, and other miscellaneous expenses, depending on the type of business.

How is Shipping Cost Calculated? A simple formula exists for determining the shipping cost of your items: Total shipping cost / Average inventory value = shipping cost per item.

Package Weight and Size

The most basic method of calculating shipping costs is based on weight. Simply weigh the package and use a shipping calculator to get the price. Some couriers give you the option of calculating shipping costs based on volume. This option is more affordable if you have a heavy but small package.

Total Freight Costs: Sum up all transportation expenses incurred for a specific period, considering different modes of transport if applicable. Weight Measurement: Determine the total weight of goods shipped within the specified timeframe. Calculation: Divide the total freight costs by the total weight in pounds.

Simply fold the total cost of shipping into your product price. For example, if your cost to create and package a product is $15 and you want a 20% profit margin, you'd need to charge $18. If it costs $8 to ship the product, you can either charge $18 + $8 shipping or $26 + free shipping.

Calculating this order fulfillment metric is simple. Just take the overall number of shipments made to fulfill orders, divided by the total number of orders received and NOT cancelled. The ideal retail ship:order ratio would be 1.00.

A low CPO means your business is achieving sales at a relatively low cost, while a high CPO can be a sign of inefficiencies or high costs. To calculate your CPO, add up all the direct and indirect costs of fulfilling one order. Then, divide that by the total number of orders you completed.

Average order value (AOV) tracks the average dollar amount spent each time a customer places an order on a website or mobile app. To calculate your company's average order value, simply divide total revenue by the number of orders.

How to calculate cost per package? ›

Most shipping carriers use a pricing method known as dimensional weight to calculate the rates they offer. This is calculated by multiplying the length, height, and the width of the package. A standard divisor is then used for dividing the figure above.

Calculated shipping rules

Automatically combine the weights of the items in one package and subtract a weight amount (in ounces). For example, if a buyer purchases 3 items that weigh 4 lb each, you can set up a rule that combines the items in one 12 lb package, and automatically deducts 16 oz from the total weight.

FAQ About Why Shipping is Expensive

The primary factors driving up shipping expenses include inefficient cargo ships, a worldwide shortage of shipping containers, restricted commodity supplies, and rising consumer demand. These elements collectively exert pressure on international shipping rates.

Usually, the bigger and heavier your shipment is, the more it will cost. That's why it's important to choose a box that's big enough for your items and packing materials, but not so big that it increases your package's dim weight needlessly.