Shipping changes both the customer’s checkout total and the contribution left from an order. “Free shipping” describes what the buyer sees; someone still pays the supplier. Compare these three scenarios using current supplier quotes and your own fee rules before deciding how to display shipping.
Scenario one: the buyer pays a shipping charge
Imagine an item priced at $28 with a $5 shipping charge. The store collects $33 before any applicable tax. If supplier shipping costs $7, the visible shipping charge does not fully cover delivery. Percentage fees may also apply to shipping revenue. Put the entire $33 and every relevant cost into your contribution worksheet rather than comparing only $5 with $7.
Scenario two: shipping is included in the price
Now imagine displaying the same delivered order as $33 with shipping included. Before fee differences or other effects, collecting $33 does not create more money than collecting $28 plus $5. The customer may respond differently to the presentation, but do not assume higher conversion. Measure your own results and compare contribution per visitor, not just the number of orders.
The figures here are hypothetical and are not current supplier quotes. If you ship to more expensive regions, use separate scenarios. Avoid funding every international shipment from a domestic average unless you have deliberately budgeted for the difference.
Scenario three: two items in one checkout
Do not assume the second item has free or discounted shipping. Items from different providers, products, or fulfillment locations may produce separate parcels and costs. Price the actual combination with current information. Include any change in packaging, percentage fees, and replacement allowance, and check whether your storefront explains split deliveries accurately.
Make a comparison sheet
- Record destination, product variants, provider, and quote date.
- Record buyer revenue, production cost, supplier shipping, and transaction costs.
- Calculate contribution after discounts and a realistic replacement allowance.
- Record the delivery estimate separately from the margin calculation.
- Flag combinations whose contribution is too low for your overhead.
Use these scenarios to decide what regions and combinations you can serve responsibly. Do not advertise a guaranteed arrival based only on an estimated production window. After launch, compare actual fulfillment charges with your assumptions and investigate the differences. A monthly shipping review is particularly useful when your product mix changes: the margin of yesterday’s single-shirt order does not establish the margin of tomorrow’s mixed basket.