Skill: leooooooow/shipping-cost-calculator-ecommerce (version 1.1.0)

# Shipping Cost Calculator Ecommerce Estimate shipping as a margin and offer-design decision, not just a carrier quote lookup. This skill goes beyond quoting a rate. It models total delivery cost per order (carrier + fulfillment + packaging + return drag), compares zones and policies, and translates the numbers into pricing, threshold, and offer decisions. --- ## Quick Reference | Decision | Key Metric | Green | Yellow | Red | |---|---|---|---|---| | Free shipping viability | Shipping as % of CM | < 30% of CM | 30–50% of CM | > 50% of CM | | Threshold effectiveness | Orders above threshold | > 60% of orders | 40–60% of orders | < 40% of orders | | Zone profitability | Margin after shipping | > 15% net margin | 5–15% net margin | < 5% net margin | | Carrier competitiveness | Cost vs benchmark | < 90% of benchmark | 90–110% of benchmark | > 110% of benchmark | | Packaging efficiency | DIM weight vs actual | DIM �j$ actual | DIM up to 1.3× actual | DIM > 1.3× actual | --- ## Solves Ecommerce teams lose money on shipping not because rates are high, but because: - They model carrier cost alone and ignore pick-pack, packaging, label, and handling - Free-shipping thresholds are set by gut feel, not margin math - Zone-level profitability is invisible — far zones quietly destroy margin - DIM weight pricing turns lightweight-but-bulky products into margin traps - Return shipping costs are excluded from per-order economics - Flat-rate shipping offers subsidize heavy/distant orders with light/nearby ones - Teams confuse "carrier cost" with "total delivery cost per order" Goal: **Give operators a complete, zone-aware shipping cost model that supports real pricing, threshold, and offer decisions — not just a rate card.** --- ## Use when - You need to understand how shipping affects unit economics - A team is testing free shipping, threshold-based shipping, bundles, or pricing changes - You want to compare zones, carriers, or packaging assumptions - Certain regions or order profiles may be quietly unprofitable - Evaluating carrier switches, 3PL changes, or packaging redesigns - Building a case for pricing adjustments based on delivery cost reality - Modeling the margin impact of seasonal shipping surcharges ## Do not use when - You need live carrier API rates with guaranteed contractual accuracy - Packaging, zones, or weight assumptions are completely unknown - The task is warehouse operations design beyond shipping-cost estimation - You only need a public quote screenshot with no business interpretation - Legal or compliance-sensitive logistics reporting is required --- ## Inputs Gather these inputs — mark any assumptions explicitly: **Package profile:** - Package weight (actual weight) - Package dimensions (L × W × H) for DIM weight calculation - DIM factor (carrier-specific: UPS/FedEx = 139, USPS = 166) - Billable weight = max(actual weight, DIM weight) **Carrier / rate inputs:** - Carrier name and service level (Ground, Express, 2-Day, etc.) - Base rate by zone or weight band - Residential vs commercial delivery surcharge - Fuel surcharge percentage (current period) - Peak/seasonal surcharges if applicable - Negotiated discount % if available **Fulfillment costs:** - Pick-pack labor cost per order - Packaging materials (box, filler, tape, inserts) - Label and postage handling - Shipping insurance (if offered) **Policy inputs:** - Current shipping policy (flat rate / free / threshold / calculated) - Free-shipping threshold ($X minimum) - Average order value (AOV) - Order distribution by zone (% of orders per zone) **Loss / return inputs:** - Return rate (%) - Return shipping cost (prepaid label cost) - Reship / replacement rate (%) - Damaged-in-transit rate and claim recovery % See `references/carrier-rates-guide.md` for carrier-specific rate structures and surcharges. --- ## Workflow ### 1. Calculate true per-order delivery cost Build the full cost stack, not just the carrier line item: ``` Carrier base rate (by zone/weight): $XX.XX + Residential surcharge: $XX.XX + Fuel surcharge (X.X%): $XX.XX + Peak surcharge (if applicable): $XX.XX = Total carrier cost: $XX.XX + Pick-pack labor: $XX.XX + Packaging materials: $XX.XX + Label / handling: $XX.XX + Insurance (if applicable): $XX.XX = Total delivery cost per order: $XX.XX ``` **Critical: Check DIM weight** ``` DIM weight = (L × W × H) / DIM factor Billable weight = max(actual weight, DIM weight) ``` If DIM weight exceeds actual weight, you're paying for air. Flag this immediately. ### 2. Segment by zone and order profile Not all orders cost the same to ship. Break down by: | Segment | % of Orders | Avg Shipping Cost | Margin After Shipping | Flag | |---|---|---|---|---| | Zone 1–2 (local) | XX% | $X.XX | XX% | — | | Zone 3–4 (regional) | XX% | $X.XX | XX% | — | | Zone 5–6 (cross-country) | XX% | $X.XX | XX% | ⚠️ if margin thin | | Zone 7–8 (remote) | XX% | $X.XX | XX% | 🔴 if unprofitable | | Oversized / heavy | XX% | $X.XX | XX% | Check DIM weight | ### 3. Model free-shipping and threshold scenarios Test the margin impact of different shipping policies: | Policy | Effective Shipping Revenue | Cost Absorbed | Impact on CM | AOV Change | |---|---|---|---|---| | Calculated (pass-through) | $X.XX/order | $0 | Baseline | Baseline | | Flat $X.XX | $X.XX/order | $X.XX/order | -X.X% | Minimal | | Free over $XX | $X.XX blended | $X.XX blended | -X.X% | +X.X% | | Free on everything | $0 | $X.XX/order | -X.X% | +X.X% | **Threshold analysis:** ``` Optimal threshold = point where incremental AOV lift > shipping cost absorbed Test: $35 / $50 / $75 / $99 thresholds For each: what % of orders qualify? What's the blended cost? ``` ### 4. Calculate return and loss drag Returns cost more than the refund — the shipping round-trip adds cost: ``` Return shipping drag per order = return rate × return label cost Reship drag per order = reship rate × full delivery cost Damage drag per order = damage rate × (replacement cost + shipping - claim recovery) ───────────────────────────────────────── Total loss drag per order: $XX.XX ``` Add this to the per-order delivery cost for true total cost. ### 5. Compare carriers and scenarios Build a comparison table when evaluating options: | Carrier / Option | Zone 2 | Zone 4 | Zone 6 | Zone 8 | Weighted Avg | |---|---|---|---|---|---| | Current (Carrier A) | $X.XX | $X.XX | $X.XX | $X.XX | $X.XX | | Option B | $X.XX | $X.XX | $X.XX | $X.XX | $X.XX | | Option C | $X.XX | $X.XX | $X.XX | $X.XX | $X.XX | | Savings vs current | — | — | — | — | $X.XX/order | Weight the average by actual order distribution across zones, not just rate card comparison. ### 6. Translate to decisions Don't just output costs. Frame results as decisions: | Result | Decision framing | |---|---| | Shipping < 30% of CM | **Absorb:** Free shipping is viable, use as conversion lever | | Shipping 30–50% of CM | **Threshold:** Set free-shipping minimum to protect margin | | Shipping > 50% of CM | **Pass through:** Charge shipping or raise price to offset | | Far zones unprofitable | **Zone-split:** Different policy by region or restrict shipping | | DIM weight inflating cost | **Repackage:** Redesign packaging to reduce dimensional waste | | Returns destroying margin | **Fix product/listing:** Reduce return rate first | | Carrier overpriced vs benchmark | **Renegotiate or switch:** Get competitive quotes | ### 7. Quality-check the model Before presenting results, verify with `assets/shipping-checklist.md`: - Is DIM weight calculated correctly? - Are fuel surcharges included? - Are fulfillment costs (not just carrier costs) in the model? - Is return/reship drag factored in? - Are zone distributions based on real order data? --- ## Output Return a structured analysis package (see `references/output-template.md`): 1. **Assumptions table** - Every input listed with source and confidence flag (✅ / ⚠️ / ❓) 2. **Per-order delivery cost breakdown** - Full cost stack: carrier + fulfillment + packaging + loss drag - Segmented by zone or order profile 3. **Policy impact analysis** - Current vs proposed shipping policy comparison - Threshold scenario modeling 4. **Carrier / option comparison** (if applicable) - Side-by-side with weighted averages 5. **Decision recommendation** - Absorb / Threshold / Pass-through / Repackage / Switch carrier - Specific actions based on the numbers - Risk flags --- ## Quality bar Strong output should: - Show total delivery cost, not just carrier rate - Include fulfillment, packaging, and loss drag in every estimate - Segment by zone — national averages hide unprofitable routes - Model threshold scenarios with real order distribution data - Label every assumption with confidence level - Frame results as pricing and offer decisions, not just cost reports ## What "better" looks like Better output does not stop at "shipping costs $X." It helps answer: - Can we afford free shipping? At what threshold? - Which zones or order types are quietly unprofitable? - Should we bundle, reprice, or change packaging? - Is our carrier competitive or are we overpaying? - What's the true margin impact of our current shipping policy? - Where are we underestimating total delivery cost? --- ## Examples ### Example 1: DTC apparel brand (Shopify + USPS) **Inputs:** - Selling price: $55, AOV: $72 - Package: 12×10×4 in, 1.2 lbs actual - DIM weight: (12×10×4)/166 = 2.9 lbs → billable = 2.9 lbs - USPS Priority Mail: $8.50 avg (Zone 1–4), $12.80 avg (Zone 5–8) - Pick-pack: $2.50, Packaging: $1.20 - 65% of orders Zone 1–4, 35% Zone 5–8 - Return rate: 15%, return label: $7.50 **Calculation:** - Weighted carrier cost: (0.65 × $8.50) + (0.35 × $12.80) = $10.01 - Total delivery cost: $10.01 + $2.50 + $1.20 = $13.71 - Return drag: 15% × $7.50 = $1.13/order - **True shipping cost per order: $14.84** - Shipping as % of AOV: 20.6% - **Decision: Set $75 free-shipping threshold** (currently 52% of orders qualify, lifts AOV 8%) ### Example 2: Amazon FBA electronics seller **Inputs:** - Selling price: $34.99 - Product: 8×6×3 in, 1.8 lbs - FBA fulfillment fee: $5.40 (standard-size) - No separate carrier cost (FBA handles shipping) - Return rate: 12%, Amazon handles returns **Calculation:** - Total delivery cost: $5.40 (all-in FBA fee) - Return drag: included in FBA return processing ($2–5/return) - Return allocation: 12% × $3.50 avg = $0.42/order - **True shipping cost per order: $5.82** - Shipping as % of selling price: 16.6% - **Decision: Shipping cost is competitive via FBA.** Focus optimization on COGS and ad spend instead. --- ## Common mistakes 1. **Ignoring DIM weight** — A 2 lb product in an oversized box ships as 8 lbs by DIM weight 2. **Using Zone 2 rates as average** — Zone mix matters; national sellers pay more than rate cards suggest 3. **Forgetting fuel surcharges** — 12–15% surcharge on every shipment adds up fast 4. **Modeling carrier cost only** — Pick-pack, packaging, labels, and insurance add $2–5/order 5. **Setting thresholds without data** — A $50 threshold means nothing if 80% of orders are already above it 6. **Ignoring seasonal surcharges** — Q4 peak surcharges can add $1–4/package 7. **Not factoring return shipping** — A 15% return rate with $8 labels = $1.20/order drag --- ## Resources - `references/output-template.md` — Structured output format - `references/carrier-rates-guide.md` — Carrier rate structures and surcharge reference - `references/free-shipping-playbook.md` — Free-shipping threshold strategy framework - `assets/shipping-checklist.md` — Pre-delivery quality checklist


Security scan verdicts — ClawScan: clean | static analysis: clean | VirusTotal: clean | SkillSpector: clean (LOW)