How to calculate shipping profit contribution
Net shipping contribution = shipping charged to the buyer − postage − packaging − marketplace fees charged on shipping. A positive result helps cover other order costs; a negative result reduces product profit.
Worked shipping-cost example
If the buyer pays $8 shipping, the label costs $5, packaging costs $1, and the marketplace charges 10% on buyer-paid shipping, the fee on shipping is $0.80. Net shipping contribution is $8 − $5 − $1 − $0.80, or $1.20.
Use the actual packaged weight, dimensions, destination, carrier service, insurance, signature cost, and marketplace fee basis. A quoted label price alone does not capture the full fulfillment cost.