Place each expense in the right unit
Some costs occur per unit, some per order, some per parcel and others per month. Convert them to the scenario's unit before adding them. A two-item order does not necessarily incur two pick-and-pack base charges, while two parcels may incur two carrier minimums.
Include inbound freight either in landed product cost or in logistics allocation, but not both. Treat storage using the inventory and expected selling period that generate it. A long-held SKU can have different storage economics from a fast-selling SKU even if the outbound parcel is identical.
| Cost | Original unit | Useful allocation |
|---|---|---|
| Inbound transport and receiving | Shipment / unit | Allocate to received usable units |
| Storage | Space / time | Allocate to the SKU's inventory holding period |
| Pick and pack | Order / item | Respect base and extra-item charges |
| Packaging | Parcel | Use the actual packed specification |
| Outbound delivery | Parcel / zone | Match service, weight and destination |
| Returns processing | Returned order / item | Weight by a supported return scenario |
Illustrative logistics budget for 100 orders
Assume €80 of allocated inbound and receiving cost, €40 storage, €120 pick and pack, €60 packaging and €400 outbound delivery for 100 single-parcel orders. Total logistics is €700, or €7 per order. These are invented amounts chosen to show the allocation, not a carrier or warehouse price list.
If inbound cost is already included in landed goods, exclude that €80 from the logistics line to avoid double counting; the remaining logistics entry becomes €6.20 per order while total order cost stays the same. Changing the label must not change profit.
Per-order logistics = (€80 + €40 + €120 + €60 + €400) / 100 = €7.00Keep buyer shipping and platform shipping deductions separate
Customer-paid shipping is income from the buyer. A TikTok shipping charge, third-party carrier invoice or warehouse bill is an expense. The platform's commission formula includes customer-paid shipping, so charging the customer an extra amount does not necessarily add that entire amount to contribution.
Statements can contain shipping incentives, refunds and adjustments. Preserve those components rather than replacing all of them with one assumed net carrier rate. Check the signed entries in the actual export, especially when a later shipping adjustment relates to an earlier sale.
Compare quotes on the same parcel and service
Give providers the same packed weight and dimensions, destination mix, order profile, storage period and return process. Record which taxes or surcharges are included and whether a minimum monthly charge changes the effective per-order cost.
For an illustrative €100 monthly minimum allocated across 100 orders, the minimum contributes €1 per order; across 20 orders it contributes €5. This is why a launch forecast should not automatically use a mature high-volume cost allocation.
- Specify the packed parcel, not just the bare product.
- Separate ordinary and exceptional destinations in the quote.
- List base, item, storage and return charges.
- Check minimums, surcharges and tax inclusion.
- Recalculate the same basket at realistic launch and steady-state volumes.
When would another fulfilment route be worth testing?
A cheaper parcel line may come with more handling, different return costs or a stock split that increases inventory exposure. Compare the complete order and replenishment process instead of selecting the lowest headline delivery number.
A route's effect on delivery experience and conversion needs operational evidence. Keep a finite test population and record actual costs, delivery outcomes and after-sales work before assuming the new route improves contribution.