In plain words
Shipping revenue is the amount an order charges the customer for delivery. It is part of what the order brings in, alongside the products.
It is easy to lose in a report. Product revenue is counted, the label is counted as a cost, and the shipping the customer paid falls between them. An order that charged for shipping then looks worse than it was, and a free-shipping offer looks as if it cost nothing.
Formula
- Shipping revenue = shipping charged − shipping discounts (− its tax when prices include tax)
- Order revenue = product revenue + shipping revenue
Worked example
The coffee bag sold with $7.00 shipping brings in $47.00: $40.00 of product and $7.00 of shipping revenue. Card fees and the refund reserve are charged on the whole amount, $1.36 and $2.35.
The label costs $7.50, so shipping was charged slightly below cost. With the shipping revenue counted, the order keeps $21.81.
The example order
A $40.00 bag of coffee, shipped free, every cost counted
2 declared kinds cost nothing on this option
| Step | Grain | Amount |
|---|---|---|
| Revenue | – | $40.00 |
| Cost of goods | per unit | −$12.00 |
| Pick and pack | per order | −$1.18 |
| Packaging | per parcel | −$0.50 |
| Shipping label | per parcel | −$7.50 |
| Card fee per order | per order | −$0.30 |
| Refunds | percent | −$2.00 |
| Card processing | percent | −$1.16 |
| Contribution margin | – | $15.36 |
| 2 kinds costing nothing | – | $0.00 |
Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.
Shipping revenue is not the listed shipping rate
A rate of $8 with a free-shipping discount applied brings in nothing. The figure to read is what the order charged after shipping discounts. A report built on the listed rate will count revenue that free-shipping orders never paid.
Using it
Count it in every margin, per order. When you compare a paid-shipping offer with a free one, the difference in shipping revenue is the cost of the free one. And decide deliberately whether you charge shipping at cost, below it or above it: each is a pricing choice, and customers notice all three.
In Offer Suite
Offer Suite books shipping revenue as each shipping line's price after discounts, tax excluded. It never reads the order's listed shipping total, which stays at the full rate even when shipping was free.
Source: Offer Suite's money definitions, checked against real Shopify orders.