Shipping Margin
The gap between what customers pay for shipping and what it actually costs you. Positive = you make money on shipping. Negative = you're bleeding margin on every box you send out. Most merchants are negative and don't realize it.
Example
You offer flat-rate $7.99 shipping. Your actual average cost per package is $9.50. That's -$1.51 per order. Ship 200 orders this month, and you just lost $302 in shipping margin alone
Why It Matters
Shipping margin is the profit (or loss) you make on shipping after accounting for carrier costs, packaging, and handling. Most merchants subsidize shipping without realizing it — losing $2-5 per order they think is 'free' for the customer.
Pro Tip
Calculate your actual per-order shipping cost including boxes, tape, labels, and labor. Then compare it to what you charge. The gap is your hidden loss.
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