What does this shipping profitability analyzer do?
It shows gross margin per order (from AOV and gross margin %) and compares it to your shipping cost per order. If shipping is higher than gross margin, you lose money on shipping. It also shows shipping as a percentage of AOV so you can set free-shipping thresholds.
Enter your AOV, shipping cost per order, and gross margin % below.
Gross margin per order$37.50
Net margin after shipping$31.50
Shipping as % of AOV8.0%
Shipping is profitable at these numbers.
Next steps
Use our AOV Optimizer to model free-shipping thresholds and Gross Margin Calculator to improve margin so shipping stays profitable.
FAQ
- What does this shipping profitability tool do?
- It compares your gross margin per order to your shipping cost per order. If shipping cost is higher than gross margin, you lose money on shipping. It also shows shipping as % of AOV.
- Should I offer free shipping?
- It depends on margin and AOV. Use this tool to see if your margin covers shipping. Many brands use a free-shipping threshold (e.g. free over $75) to protect margin while boosting AOV.
- Is this shipping profitability analyzer free?
- Yes. Free with no signup. For AOV optimization see AOV Optimizer; for margin see Gross Margin Calculator.