How do I check an online store’s shipping costs against what customers pay?

Ask for two sets of data for the same period: shipping income collected at checkout and carrier invoices. Match them order by order for a sample, then in total. If the store offers free shipping above a set cart size, check whether the product margins actually absorb the cost. Many stores subsidize shipping without noticing.

Look at the extras. Packaging, labels, insurance, handling time and lost or damaged parcels add up. Ask how the store handles reshipments and who pays for return labels. Look for unusual items, such as carrier discounts that depend on volume the store may not keep, or rates that changed recently.

Then follow the numbers into the financial statements. Some businesses record shipping in cost of goods sold, others list it as an expense. Neither is wrong, but you need to know which is used before comparing margins with other stores. Ask your accountant to restate the figures in one consistent way. Also ask whether the shipping setup depends on an agreement with a single carrier or fulfilment partner. Finally, ask whether the store has changed its shipping rates lately and how customers reacted. A recent increase may have cut orders, and an overdue one may mean margins are weaker than the current reports suggest.

Key takeaways

• Match shipping income to carrier invoices for the same orders.
• Include packaging, reshipments and return labels in the cost.
• Find out where shipping sits in the financial statements.
• Ask whether carrier rates depend on volume or a single agreement.