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Marketplace fees

Shipping Profit Calculator

Work out whether shipping makes or loses you money per order — including the commission charged on the postage you collected.

Your numbers

Use your own costs — the defaults are only a starting point.

What you charge

Every order loses $1.93 on shipping alone. That comes straight out of the product margin.

What it costs
Volume

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Profit or loss per order on shipping: -$1.93
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How this calculator works

Shipping feels like a pass-through, so it often goes unexamined. It rarely is one. The box, the filler, the label, and the ten minutes spent packing are all real costs, and on most marketplaces you also pay commission on whatever you charged the buyer for postage.

A small loss per order is easy to miss and adds up quickly across a year. This shows the per-order figure and what it comes to annually.

The formula

  1. True cost = postage + box + filler + label + (packing minutes ÷ 60 × labour rate)
  2. Commission on shipping = shipping charged × fee %
  3. Shipping revenue kept = shipping charged − commission on shipping
  4. Shipping profit = shipping revenue kept − true cost
  5. Break-even charge = true cost ÷ (1 − fee %)

What to watch for

  • Packing time is a real cost. Four minutes an order at $25 an hour is $1.67 — often more than the box.
  • On most marketplaces the commission applies to the shipping the buyer paid, so charging more for postage does not recover the full amount.
  • Free shipping is not free. It moves the whole shipping cost into your product margin, and you still pay commission on the higher item price you used to cover it.
  • A loss of a dollar an order is easy to ignore and is $720 a year at sixty orders a month.

Common mistakes

  • Counting postage only, and forgetting the box, filler, label and time.
  • Assuming shipping is a pass-through when commission is charged on it.
  • Offering free shipping without raising the product price to cover it.
  • Using an average postage figure when heavy or fragile items cost far more.

Frequently asked questions

Am I losing money on shipping?

Very possibly. Add postage, the box, filler, the label and the time it takes to pack, then subtract the commission the marketplace charges on the shipping you collected. Many sellers who charge a flat rate close to their postage cost are actually losing a dollar or two per order once packaging and time are counted.

Should I offer free shipping?

Only if the product price covers it. Free shipping often lifts conversion, but it moves the entire shipping cost into your margin and you pay commission on the higher item price too. Work out the true shipping cost first, add it to the product price, then check the result still sells.

Do marketplaces charge fees on shipping?

Most do. The commission and payment processing usually apply to the total the buyer pays, postage included. That means raising your shipping charge to cover a shortfall only recovers about 90% of the increase, so the gap closes more slowly than you would expect.

Should I include packing time as a cost?

Yes. It is time you cannot spend making things, and at any realistic labour rate it is a meaningful share of the shipping cost. Leaving it out is what makes shipping look break-even when it is not — and it is the line most often missing when a seller cannot work out where the margin went.