--- title: "Shipping revenue: definition, formula and example" description: "What the customer pays for delivery, after any shipping discount and before tax. It is revenue of the order, separate from what the label costs." url: https://offersuite.io/glossary/shipping-revenue updated: 2026-10-13 --- # Shipping revenue What the customer pays for delivery, after any shipping discount and before tax. It is revenue of the order, separate from what the label costs. ## 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 Revenue $40.00 to contribution margin $15.36 (38.4%) Revenue $40.00 Cost of goods −$12.00 Pick and pack −$1.18 Packaging −$0.50 Shipping label −$7.50 Card fee per order −$0.30 Refunds −$2.00 Card processing −$1.16 Contribution margin $15.36 2 declared kinds cost nothing on this option 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. ## Related - [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary) - [Calculator **Free shipping threshold calculator** Price a free-shipping threshold with the shipping you give away on orders that already reach it, and the share of smaller orders that must top up to pay for it.](https://offersuite.io/calculators/free-shipping-threshold) - [Calculator **Offer option calculator: profit per visitor** Compare up to three offer options on profit per visitor, margin per order times conversion, and see the conversion lift each one needs to match the best.](https://offersuite.io/calculators/offer-option-profit-per-visitor) - [Glossary **Free shipping: definition, formula and example** Charging the customer nothing for delivery. The carrier still gets paid, so it is a revenue decision that costs what shipping used to bring in.](https://offersuite.io/glossary/free-shipping) - [Glossary **Gross revenue: definition, formula and example** An order's revenue as Offer Suite books it: line prices after discounts plus shipping charged, tax excluded, frozen at the sale as placed.](https://offersuite.io/glossary/gross-revenue) - [Glossary **Shipping cost: definition, formula and example** What the carrier charges you to deliver a parcel. A cost per parcel set by weight and distance, whatever the customer was charged for shipping.](https://offersuite.io/glossary/shipping-cost)