Fulfillment
Shipping Cost Planning Guide
Shipping cost is one of the fastest ways for a promising product to become unprofitable. Sellers should estimate fulfillment before finalizing packaging, price or campaign targets.
What to include
Include outbound shipping, packaging materials, pick-and-pack fees, platform fulfillment charges, insurance, failed delivery risk and average reshipment cost. If you offer free shipping, treat it as part of the product price strategy.
Dimensional weight
Large but light products can be expensive because carriers often charge by dimensional weight. Reducing package size can improve margin more than negotiating a slightly better product cost.
Pricing decision
Compare free shipping, threshold shipping and paid shipping. The best option is the one that improves total contribution margin, not simply the one with the highest conversion rate.