How Much is Free Shipping REALLY Costing You?

Gone are the days when you could actually make money on shipping. Merchants are all too willing to move to a free shipping model without being aware of the entire cost of shipping a package. If you’re offering free shipping, it’s probably costing you 30 percent MORE than you think. If you talk to many companies that offer free shipping and ask, “How can you afford this?” Their answer: “I work the cost of shipping into the product.”

There are many other costs involved in shipping a product in addition to postage. Are you monitoring your delivery area surcharge (DAS) or extended delivery area surcharge (EDAS)? Most carriers have these charges.

A good exercise for companies doing ecommerce order fulfillment is to look at your average monthly packaging, warehouse labor and credit card fees, then divide that total by the number of packages you shipped

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Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.