How to Calculate Cost-Per-Shipment for a Single SKU: A Practical Guide for Ecommerce Brands

Last Updated: July 09, 2025

In the world of ecommerce, margin visibility can make or break your business—especially when you’re shipping physical products like supplements, beauty items, consumer electronics, or medical devices. Yet, many brands still rely on topline revenue to judge performance, without drilling into one of the most critical profitability metrics: cost-per-shipment (CPS) at the SKU level. 

Understanding the true CPS for each SKU in your catalog can uncover hidden cost drivers, improve pricing decisions, and help scale more profitably.  

What’s in this post:  

1. How to conduct a thorough cost-per-shipment analysis 
2. A break down of costs you need to include  
3. Formulas for how to calculate the real numbers 
4. Examples that show how to turn data into smarter business actions  

Step 1: Break Down All Relevant Costs  

To get to a true cost-per-shipment number, you need to identify and quantify every variable cost that contributes to fulfilling a customer’s order for that specific SKU.  

Here’s where you need to collect:  

1. Product Cost (COGS)

Start with your baseline cost of goods sold. This includes:  

• Manufacturing or wholesale cost per unit. 

• Inbound freight, including shipping from your supplier to your warehouse or 3PL.  

• Duties, tariffs, and import taxes allocated on a per-unit basis.  

For industries like supplements or medical devices, where raw materials or compliance testing add complexity, be sure to include those additional production costs.  

2. Fulfillment Costs

Fulfillment includes everything from the moment the order is received into your warehouse to when it’s handed over to a carrier.  

• Pick and pack fees if you’re using a 3PL or fulfillment partner.  
• Packaging materials (boxes, inserts, bubble wrap, cold packs, etc.).  
• Labeling or special handling fees, especially common in beauty and regulated products.  
• Kitting, special projects, testing, or refurbishment.  

If you’re fulfilling in-house, estimate a per-order labor cost based on average time and wages. If your products are fulfilled by a third-party provider, they should be sending you detailed invoices that differentiate fulfillment costs and storage fees.  

3. Shipping Costs

Shipping is one of the most volatile and margin-eroding expenses in ecommerce. Some brands may spend up to 70% of their budget on shipping costs alone. Use your actual carrier invoices to calculate an average shipping cost for that SKU.  

• Factor in dimensional weight, destination zones, and whether it ships alone or with other products
• If you use flat-rate shipping, adjust for overages and underages on a per-SKU basis.  
• For heavier items like electronics or devices, or items that require special packaging (temperature control, hazard labeling), expect these costs to be significantly higher. 

4. Platform and Payment Fees  

It’s not free to sell on many ecommerce platforms, and while the entry cost may seem small per unit it can add up quickly—especially for lower-priced items with thinner margins. Some examples include:  

• Marketplace fees if you’re selling on Amazon, Walmart, or similar (usually a percentage of the sale).  
• Payment processing fees from providers like Stripe, PayPal, or Shopify Payments (typically 2.9% + $0.30 per transaction).

5. Marketing and Promotions

You can easily calculate the ad spend per order by using attribution tools (like last-click or blended CAC) to assign marketing costs to each order.  

Discounts or affiliate commissions should be included in your per-unit analysis. This is especially important for brands with heavy paid media strategies (common in beauty and CE sectors).  

6. Returns and Refunds  

Return rates and restocking fees vary dramatically by product type. Assign a pro-rated return cost per shipment, including shipping, inspection, and write-offs for damaged goods. 

Step 2: Calculate Your True Cost-Per-Shipment  

Once you have your cost inputs, the formula looks like this:  

Compare that number against your net revenue per shipment (gross sales minus discounts and refunds) to determine:  

• Gross profit: Revenue – COGS  
• Contribution margin: Revenue – all variable costs  
• Net margin per order  

Let’s say you’re selling a $40 skincare product and your per-shipment cost breakdown looks like this:  

• COGS: $7  
• Fulfillment: $4  
• Shipping: $6  
• Fees: $2.20  
• Marketing: $8  
• Returns (3% rate): $1.20  

Your cost-per-shipment would be $28.40, leaving you with an $11.60 contribution margin.If that margin is below your profitability target—or worse, negative—it’s time to adjust pricing, cut costs, or optimize fulfillment strategy. 

Step 3: Turn Insights into Action  

Once you’ve calculated your CPS, here’s how to use it:  

Identify and Cut Cost Drivers  

• Shipping zones too wide? Use a more regional fulfillment strategy to reduce costs.  
• Packaging overkill? Re-evaluate materials or box sizes to cut dimensional weight.  
• 3PL picking too expensive? Renegotiate SLAs or batch orders more efficiently.  

Rethink Pricing or Discounts  

• If your blended CAC is eating too much margin, consider bundling products to increase AOV and offset costs.  
• Re-evaluate promo campaigns: are they acquiring repeat buyers or just bargain-hunters?  

Benchmark Across SKUs  

• Compare CPS across product lines. Are some SKUs subsidizing others?  
• Discontinue or optimize unprofitable SKUs—especially those with high return rates or special handling requirements. 

Bottom Line

Cost-per-shipment analysis might seem granular, but it’s one of the most powerful tools for improving profitability—especially in high-CAC industries like beauty, CE, and supplements. With accurate data and a repeatable framework, you can make smarter decisions about pricing, fulfillment, and growth strategy. 

Tags: Calculators & Formulas