What does shipping really cost per order?

The shipping costs of an order are on your carrier’s invoice: the base rate plus the surcharges, for every parcel of that order, excluding VAT. What your shipping software records when it creates a label is an expectation. Only the invoice tells you what it cost, and that invoice arrives weeks later, in a file of thousands of lines.

How to calculate it

• Shipping costs per order = the sum of all invoice lines for the parcels of that order: base rate + surcharges + fuel surcharge, excluding VAT
• Average shipping costs per order = total shipping costs from the invoice ÷ number of orders shipped in the same period
• Effective fuel surcharge = the surcharge amount ÷ the amount it was calculated on

Only calculate the average over orders whose invoice has arrived. An order without an invoice does not have zero shipping costs: it does not have shipping costs yet.

Two kinds of invoices

A carrier invoice comes in two layouts. In a long invoice every cost item is on its own line, with a column that says what kind of cost it is. In a wide invoice every parcel is on one line, with the surcharges as separate columns. That difference decides how you add up the costs per parcel: in a long invoice you add lines, in a wide invoice you add columns.

Why it goes wrong in practice

We came across these five mistakes in real carrier files of an e-commerce business. None of them produced an error message.

1. The amount field was zero. At one carrier, the obvious amount field was 0 on every parcel line. The total was only on a few total lines without a parcel number. A report that read that column showed almost no shipping costs. The real cost per parcel is the base rate, plus the surcharge columns, plus the fuel surcharge.

2. The same amount on several lines. In some exports a parcel appears on more than one line, with the parcel’s amount repeated on every line. Add them up and you count the parcel several times. Whether an amount belongs to the parcel or to the line differs per file. You establish it from the data itself: if the amount is the same on every line of a parcel, it belongs to the parcel.

3. The fuel surcharge around a month change. An invoice covering two months can contain two surcharge percentages. Apply the highest percentage to the whole invoice and you charge too much. Derive the right percentage from the amounts: the surcharge amount divided by its base.

4. Grams or kilos, millimetres or centimetres. One carrier supplies weight in grams, another in kilos. One gives dimensions in millimetres, another in centimetres. That is a factor of a thousand or ten that you cannot see in the number.

5. With or without VAT. Some carrier files never say whether an amount includes or excludes VAT. Then “excluding” is an assumption. A 21% difference does not stand out when you add things up.

How Sento calculates it

• Every invoice line goes to its shipment. So you see per destination, weight and method what you pay and what you pass on.
• Invoiced and estimated stay apart. If the invoice is not in yet, Sento uses the expected costs and says that it is an expectation. When the invoice arrives, it replaces the expectation.
• What cannot be established is asked. Sento reads your columns and says what it is unsure about. What it cannot prove, it asks you, rather than quietly filling something in.
• Never counted twice. Lines are de-duplicated within an invoice and never across invoices, so a correction sent later cannot hit your costs twice.
• Empty is not zero. If data is missing, the figure says which share of your revenue it covers.
• Every amount clicks through. For every number you see which file and which line it came from.

Frequently asked questions

What are normal shipping costs per order for an online store?

That differs per store, per carrier and per parcel size, so someone else's average says little. Calculate your own, with the shipping costs from the invoice divided by the number of orders shipped, excluding VAT, and only over orders whose invoice has arrived.

Why does my shipping cost report not match the invoice?

Usually because of one of four things. An amount that belongs to the parcel was added up over several lines. An amount column does not hold the real amount. There is a difference in VAT. Or the invoice has not arrived yet.

How long after shipping does the carrier invoice arrive?

With the carriers we worked with, two to six weeks. The current month is therefore never final. A margin after shipping costs for that month rests partly on an expectation, and that should be stated.

Which carrier files can Sento read?

Any package that can export, via CSV or Excel. PostNL, DPD, DHL, GLS, QLS, Raben and Delivery Match are among the systems Sento reads from.