Shipping Cost Per Order
Shipping cost per order is the average outbound delivery cost allocated to each shipped customer order.
What is Shipping Cost Per Order?
This metric spreads carrier and other stated outbound shipping charges across the orders served. It differs from cost per parcel because an order can travel in multiple packages. The denominator should reflect the question being answered.
The delivery charge paid by the customer is revenue, not a reduction in the carrier’s price. Gross shipping cost and the merchant’s net shipping subsidy are related but separate measures.
Shipping cost per order = Included outbound shipping costs ÷ Shipped orders
Include the stated carrier charges and surcharges. Label net subsidy separately as shipping cost less customer shipping revenue per matching order. Identify any packaging costs already counted in fulfillment.
Split shipments change the parcel average
A home-goods store ships 500 orders using 550 parcels. Outbound carrier charges total $3,300. Shipping cost is $6.60 per order or $6 per parcel. Customers pay $1,000 in shipping charges, so the net delivery subsidy is $2,300 in total, or $4.60 per order before other delivery-related costs.
How to interpret it
A rising average can reflect heavier parcels, more distant destinations, expedited service or more split shipments. The carrier’s base tariff can remain unchanged while the store’s delivery mix becomes more expensive.
Shipping cost should be matched to the orders that generated it, including delayed surcharges where material. Comparing this month’s invoice with unrelated order dates can create misleading volatility.
Free shipping means the customer is not charged delivery; it does not mean the order has no shipping cost. The merchant-funded amount needs to be covered by product contribution, a larger basket or another source of economic value.
Separate outbound delivery from return freight unless the measure is intentionally a total delivery-lifecycle cost. A refund or return can generate an additional carrier payment after the original sale, and that exposure should remain visible elsewhere in order economics.
Common mistakes
Using parcel count for an order metric
Split shipments make parcels and orders different populations. A low cost per parcel can coexist with a high cost per order.
Subtracting customer shipping revenue without relabeling
That gives a net subsidy measure, not the gross delivery cost. Both are useful, but they answer different questions.