Are you losing money on shipping? How to find the leaks

Short answer: Compare what each label actually cost with what the customer paid for shipping on that order, grouped by carrier and service. Wherever labels cost more than you charged, look at product weights, box sizes, your free shipping threshold, surcharges and address corrections. Missing product weights are the most common cause.

How to measure it

1. Export orders with the shipping amount charged to the customer.
2. Export your label costs from your label app or carrier invoices, including adjustments that arrive later.
3. Match them by order and total the difference by carrier and service, and by month.
4. Sort orders by the biggest gap and look for what they have in common.

The six usual causes

1. Missing or wrong product weights

If a product has no weight in Shopify, calculated shipping rates at checkout come out too low. Fill in real weights, including packaging, for every variant.

2. Dimensional weight

Carriers bill larger, light boxes by size rather than weight. A box that's too big for what's in it can cost much more than its weight suggests. Right-size your boxes.

3. A free shipping threshold that's too low

Check what shipping costs you on orders just over the threshold. If those orders lose money, raise the threshold or the prices of the items people add to reach it.

4. Flat rates that don't fit the orders

One flat rate for every order overcharges small orders and undercharges heavy or long-distance ones. Use weight tiers or calculated rates.

5. Surcharges

Residential delivery, remote areas and peak season can add surcharges that don't show up in the rate you quoted. Watch for them on invoices.

6. Address corrections and adjustments

Carriers charge to correct bad addresses and adjust labels after the fact when weights or sizes don't match. Checking addresses before you ship prevents both the fee and the delay.

Make it a habit

Run the comparison monthly. Shipping costs change with carrier rate updates every year and with peak surcharges every fall, so a setup that worked in spring can leak in December.