Break down per-order shipping cost: supplier shipping, packaging, handling, and what to charge the customer.
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Adds up every component of per-order shipping cost: what the supplier charges you, packaging, handling, and inbound freight (if you receive stock first). Then multiplies by your order volume to show what shipping actually costs you per month and per year.
Most dropshippers count only the supplier's shipping cost and forget packaging, handling, and inbound freight. Those small per-order costs add up — $0.80 of packaging on 100 orders/month is $960/year you didn't account for.
Per-order shipping cost = supplier shipping + packaging + handling + inbound freight per unit
Monthly = per-order × orders per month
Once you know your true per-order shipping cost, you have three pricing options for shipping: free shipping (the cost is hidden in the product price), flat-rate shipping (you charge the customer a flat fee and absorb the difference), or passed-through shipping (the customer pays what you pay). Each has tradeoffs — read our shipping cost strategy article for the math on which one preserves margin.
| Component | Value |
|---|---|
| Supplier shipping | $4.50 |
| Packaging | $0.80 |
| Handling | $0.00 |
| Inbound freight | $0.00 |
| Per-order shipping cost | $5.30 |
| Monthly (100 orders) | $530.00 |
| Annual | $6,360.00 |
On a $40 product, that's 13.25% of revenue going to shipping alone. If you offer "free shipping," the customer isn't paying for it — you are, out of margin. Make sure your product price reflects that.
Total landed cost per unit — product + inbound shipping + duties + packaging + handling. The number you should price from.
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Break down per-order shipping cost: supplier shipping, packaging, handling, and what to charge the customer.
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