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Logistics Costs

How the Logistics Costs are defined and calculated

Written by Frank Birzle

Costs for Shipping, Picking, Returns etc. of sold items.


Formula

Logistics Costs are calculated as the sum of six cost buckets, each configured separately:

Daily Fixed Costs (e.g. warehouse rent, 3PL base fee) Distributed equally across all orders on a given day. = Daily Fixed Cost ÷ Number of Orders on that Day

Cost per Order (Outbound Shipping + Packaging + General + Other) Applied once per order, regardless of item count. Outbound Shipping can be flat-rate or weight-based. = Number of Orders × (Outbound Shipping + Packaging + General Costs + Other)

Cost per Item (Picking + Inbound Shipping + Storage + Other) Applied per unit in an order. = Number of Items × (Picking Costs + Inbound Shipping + Storage Costs + Other)

Cost per Return (per order and per item) = (Returned Orders × Return Cost per Order) + (Returned Items × Return Cost per Item)

Cost per New Customer Applied only to first-time buyer orders — e.g. welcome inserts, branded packaging upgrades. = Number of New Customer Orders × New Customer Cost

Product-specific Costs Costs tied to individual SKUs — for items with surcharges, special handling, or separate 3PL fees. = Sum of all SKU-level cost rules

Explanation

The Logistics Costs contain all costs associated with getting the product delivered to your customers.

Your logistics costs structure can be configured as a Cost Datasource. Not only that, you can also adjust them over time. You can define different time periods and set different costs in each of them so that you can work margin improvements into your reports.

There are quite a few different components to calculate your Logistics costs. A detailed breakdown can be found here: Configuring Logistics Costs

Used in the following reports

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