Most eCommerce sellers know their product cost and selling price, but far fewer have calculated their true cost per order — the number that actually determines profitability. Getting this calculation right is essential before you scale, raise prices, or commit to a new fulfilment arrangement.
Your total cost per order = product cost + pick and pack fee + postage + packaging materials + returns cost (amortised) + goods-in cost (amortised) + storage cost (amortised) + payment processing fee + platform/marketplace fee.
Most sellers account for the first two or three items and miss the rest. The amortised costs — returns, goods-in, and storage — are real costs that belong in your per-order calculation, even though they're not billed on a per-order basis.
Storage cost per order = (monthly storage cost) ÷ (monthly units dispatched). If you're paying £200/month in storage and dispatching 400 orders per month, your storage cost per order is 50p. At PackPro, storage is charged at 40p per unit per day — multiply your average stock level by 40p by average days in stock, divided by monthly dispatches.
If you pay £1.00 per unit in goods-in costs and each unit sells in one month, your goods-in cost per order is £1.00. If each unit takes two months to sell, your goods-in cost per order is still £1.00 (you paid £1.00 once), but you've had £1.00 of cash tied up for longer. Include the actual goods-in payment in your per-order cost.
Returns cost per order = (return rate × average return processing cost + return postage cost + average product recovery value loss). If 10% of orders are returned, each return costs £2 to process, and 30% of returned items can't be resold, this adds roughly 35–50p to your cost per order depending on your product value.
Product cost: £8.00. Pick and pack: £0.90. Postage: £2.50. Packaging: £0.30. Storage (amortised): £0.40. Goods-in (amortised): £0.25. Returns (amortised): £0.40. Payment processing (2%): £0.60 on a £30 sale. Marketplace fee (15%): £4.50. Total cost: £17.85. Gross profit on a £30 sale: £12.15. Gross margin: 40.5%.
Use our free fulfilment cost calculator to model your own numbers, or contact PackPro for a detailed cost breakdown based on your products and volumes.