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Savings and negotiation

Is free shipping eating your margin?

For e-commerce sellers: see contribution margin after shipping, fuel, fulfillment and returns, and the order value where free shipping breaks even.

Your inputs

Defaults update weekly from live data
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Defaults to this week’s UPS Ground rate.

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Results

Contribution margin after shipping$9.1620.4% of price
Gross margin before shipping$27.00
Each 5 percentage points of fuel costs$0.48per order
Break-even order value$28.96

Where the price goes

Cost of goods$18.00
Shipping$9.50
Fuel surcharge fuel$2.80
Fulfillment and packaging$3.25
Returns (expected shipping)$0.98
Payment fees$1.31
Contribution$9.16
Selling price$45.00
Better carrier terms go straight to your margin.Request a Free Parcel Contract Review →

How this is calculated

Contribution = price − COGS − shipping incl. fuel − fulfillment − expected return shipping − payment fees. Break-even assumes COGS scales with price.

Rates shown as defaults come from carrier publications or each carrier’s published table applied to the EIA price; see the methodology. Estimates and examples are labeled. Results are illustrative and do not represent any carrier’s reported financial results.

Questions

How much does fuel add to free shipping?

At a 30% fuel surcharge, a $9.50 label costs $12.35.

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Better carrier terms go straight to your margin.

Logistics Contract Optimizer reviews parcel, LTL and truckload agreements for free. Clients typically recover 3% to 15% of freight spend, and with savings-share pricing there is no fee without savings.

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