Shipping Cost per Order: The Metric Every NZ Store Should Track

A low-priced courier label does not necessarily mean a low-cost shipping operation. One customer order may travel in two parcels. Cartons and protective materials cost money, and a return or replacement may appear on a later invoice.

Before changing packaging, services or customer delivery charges, answer one practical question: how much does it cost, on average, to dispatch an order?

1. Define what counts as an order

Choose a clear group, such as orders first dispatched during one calendar month. Use the number of unique dispatched orders as the denominator—not labels, parcels or every order received.

• One order split into two parcels still counts as one order. Include the transport charges for both parcels.
• Exclude orders cancelled before dispatch.
• Retain orders that were dispatched and later refunded: their shipping costs still happened.

Keep the connection between order IDs and consignment numbers. It prevents split shipments and replacement labels from inflating the order count.

2. Start with a clearly defined calculation

Outbound shipping cost per order = (final outbound carrier charges after adjustments and credits + packaging materials used) ÷ unique dispatched orders in the group.

Reconcile the charges against the final invoices, rather than relying only on the original quotes. Do not add a surcharge again if it is already included in the total. Match later adjustments and credits to the relevant consignment.

Packaging means the bags, cartons, tape and protective materials actually used. It does not mean charging the entire month's bulk packaging purchase to the orders shipped that month. Unused labels that have not been refunded can be tracked separately as label waste, not treated as dispatched parcels.

Use the same currency and amount basis from month to month. Labour, warehouse and platform costs can belong in a broader fulfilment measure, but do not include them in some months and exclude them in others.

3. Worked example: 100 orders, 110 parcels

These are invented teaching figures, all on a consistent NZ-dollar basis. They are not iShipping rates or an industry benchmark.

Both measures can be useful, but they answer different questions. Comparing NZ$11 per order with NZ$10 per parcel would not show an improvement in the same metric.

4. Track returns and replacements separately

Keep the initial outbound measure clear, then record return and replacement transport and packaging costs separately. To calculate follow-up costs for a particular group of orders, attribute those costs back to the original order and state the reporting cut-off date.

Suppose the same 100 orders later generate NZ$100 in combined return and replacement transport and packaging costs. Their observed shipping cost up to that date becomes (1,100 + 100) ÷ 100 = NZ$12 per order. It may change as further costs arrive; it does not imply that every after-sales issue has been closed.

Do not divide this month's return costs from older orders by this month's newly dispatched orders. If the original order cannot yet be matched, keep the cost separate until it can be reconciled.

5. Look beneath the average

Alongside the overall figure, compare useful groups in your business: bags and cartons, local and inter-island shipments, or urban and rural destinations. With small samples, inspect individual orders before drawing conclusions.

If one carton type is expensive, check its external dimensions, actual weight and protective packaging. NZ Post's sending standards illustrate why both weight and volume matter when determining postage; a parcel being light is not enough to judge its cost. Check each other carrier's current rules separately. Read NZ Post's sending standards.

Our guides to volumetric weight and five common packaging mistakes can help you review a frequently used carton. Necessary product protection should not be sacrificed to improve a cost figure.

6. Review monthly on a consistent basis

A simple record can include the order ID, first dispatch date, consignment number, packaging type, final carrier charge and materials used, with returns and replacements recorded separately. Reconcile monthly and label unsettled costs as provisional.

If you also compare net shipping charges collected from customers, use the same group of orders. The difference from actual shipping cost shows a shipping-cost recovery gap—not business profit.

Track four weeks, then choose one action: remeasure a common carton, review split shipments or check the service selected for high-cost orders. iShipping lets you compare available courier services. Log in to iShipping, enter the parcel's actual address, dimensions and weight, and assess the options against the order's needs. This article's metric requires your order, invoice and packaging records; it is not a claim that iShipping automatically generates this report.