Tracking and Reducing Shipping Costs

Shipping is often one of the top three costs for eCommerce businesses — yet most owners have only a vague sense of what they pay per order and almost no visibility into how that cost varies by carrier, zone, or product weight.

A 15% reduction in average shipping cost on a business processing 1,000 orders per month at £6 average shipping cost saves £10,800 per year — equivalent to a significant boost in gross profit. AskBiz makes this analysis straightforward by pulling carrier invoices and marketplace fulfilment fees alongside order data.

AskBiz imports shipping cost data from:

• Royal Mail Click & Drop: connect via Settings → Integrations → Royal Mail
• Evri (Hermes): connect via Settings → Integrations → Evri
• DPD, DHL, FedEx, UPS: upload invoices as CSV via Settings → Integrations → Carrier Invoice Upload
• Amazon FBA: fulfilment fees are imported automatically with your Amazon integration
• Shopify Shipping: imported automatically with your Shopify integration
• ShipStation, Shippo: native integrations available via Settings → Integrations

For carriers not natively supported, upload monthly carrier invoices in the standard CSV format and AskBiz will match each shipment to its corresponding order.

Go to Operations → Shipping → Cost Analysis to see:

• Average cost per shipment: overall and by carrier
• Shipping cost as % of revenue: the most useful benchmarking metric (aim for under 8% for most eCommerce categories)
• Cost per shipment by zone: domestic zones have very different economics; zone analysis shows where your customers are most expensive to reach
• Cost per shipment by weight band: identifies whether heavy products are priced to cover their shipping cost
• Shipping surcharges: fuel surcharges, remote area fees, and other carrier add-ons often add 15–25% to base shipping rates — AskBiz surfaces these separately
• Lost/damaged shipment rate: by carrier, showing which carriers have the highest claim rates

If you use multiple carriers, AskBiz compares the cost of equivalent shipments (same weight, same zone) across carriers. This analysis frequently reveals that one carrier is significantly cheaper for a specific weight band or zone that you are routing to a more expensive carrier.

For example, Royal Mail is typically cheapest for sub-1kg parcels; Evri for 1–2kg; DPD for time-sensitive or high-value items. Routing by these rules rather than using a single carrier for all shipments can reduce average shipping cost by 10–20%.

Go to Operations → Shipping → Carrier Comparison to see head-to-head rate comparisons for your actual shipment profile.

If your shipping cost analysis reveals you are subsidising shipping more than intended, there are several recovery options:

• Increase the free shipping threshold: raising from £30 to £40 AOV reduces the % of orders getting free shipping
• Introduce a handling fee: a flat £0.99–£1.99 handling charge per order helps offset packaging costs without being perceived as a shipping charge
• Charge actual shipping for low-value orders: reserve free shipping for orders above a threshold; charge a flat rate for smaller orders
• Build shipping cost into product pricing: for high-volume products, increase price by £0.50–£1.00 rather than showing a shipping line

Model the revenue and conversion impact of each option in AskBiz before implementing — some changes improve margin but reduce conversion rate, netting out to lower profit.