Shipping as a Percentage of Revenue: Benchmarks by Industry
Healthy shipping costs as a percentage of revenue typically range from 8-15% for most e-commerce businesses, with significant variation by industry. Apparel averages 10-14%, electronics 6-10%, home goods 12-18%, and health/beauty 8-12%. Companies with optimized packaging and carrier contracts often achieve the lower end of their industry range, while those shipping oversized boxes or using suboptimal carriers trend higher. If your shipping percentage exceeds your industry benchmark by more than 3-5 percentage points, you likely have optimization opportunities—with packaging efficiency being the most common and highest-ROI lever.
How much should shipping cost as a percentage of your revenue? It's a question every e-commerce operator asks—and one that's surprisingly hard to answer without context.
Spend too little and you risk damaged products, slow delivery, and customer complaints. Spend too much and you're eroding margins that could fuel growth. The sweet spot varies dramatically by industry, product type, and business model.
This guide provides concrete benchmarks across industries, helping you understand where you stand and where you should aim.
Why This Metric Matters
The Shipping Percentage Reality
What shipping percentage reveals:
| High Percentage (>15%) | Low Percentage (<8%) |
|---|---|
| Potential inefficiency | Strong optimization OR |
| Oversized packaging | Subsidizing shipping costs OR |
| Poor carrier rates | High-value products |
| Wrong shipping methods | Risk of underinvestment |
| Margin erosion | May indicate quality tradeoffs |
Neither extreme is automatically good or bad—context determines whether your number is healthy.
Components of Shipping Cost
What's included in "shipping percentage":
| Component | Typical % of Shipping Cost |
|---|---|
| Carrier charges | 70-80% |
| Packaging materials | 10-15% |
| Labor (packing) | 5-10% |
| Returns shipping | 5-15% |
| Insurance | 1-3% |
Most optimization focuses on carrier charges, but packaging affects both carrier costs AND materials.
Industry Benchmarks
Apparel and Fashion
Benchmark: 10-14% of revenue
| Factor | Impact on Shipping % |
|---|---|
| Light products | Lower actual weight |
| High DIM sensitivity | Oversized boxes costly |
| Return rates (20-30%) | Significant reverse logistics |
| Free shipping expectations | Often absorbed in margin |
Apparel shipping breakdown:
| Metric | Low Performer | Average | High Performer |
|---|---|---|---|
| Shipping % | 16-18% | 12-14% | 9-11% |
| Box utilization | 40% | 55% | 75%+ |
| Return rate | 30%+ | 22% | 15% |
| DIM weight waste | $3.50/order | $2.00/order | $0.75/order |
Key optimization lever: Right-sized poly mailers and boxes eliminate DIM waste.
Electronics and Tech
Benchmark: 6-10% of revenue
| Factor | Impact on Shipping % |
|---|---|
| Dense products | Actual weight often > DIM |
| High order value | Shipping % naturally lower |
| Protection requirements | Premium packaging needed |
| Lower return rates | Less reverse logistics |
Electronics shipping breakdown:
| Metric | Low Performer | Average | High Performer |
|---|---|---|---|
| Shipping % | 12-14% | 8-10% | 5-7% |
| Damage rate | 4%+ | 2.5% | 1% |
| Box utilization | 50% | 65% | 80%+ |
| Insurance cost | 2%+ | 1% | 0.5% |
Key optimization lever: Custom inserts reduce damage and eliminate void fill costs.
Home Goods and Furniture
Benchmark: 12-18% of revenue
| Factor | Impact on Shipping % |
|---|---|
| Bulky products | High DIM weight |
| Fragile items | Extra protection needed |
| Heavy items | Actual weight charges |
| Large box requirements | Material costs higher |
Home goods shipping breakdown:
| Metric | Low Performer | Average | High Performer |
|---|---|---|---|
| Shipping % | 22-25% | 15-18% | 11-14% |
| Damage rate | 6%+ | 4% | 2% |
| Box utilization | 35% | 50% | 70%+ |
| Average ship cost | $18+ | $14 | $10 |
Key optimization lever: Product-specific box sizes and freight options for large items.
Health and Beauty
Benchmark: 8-12% of revenue
| Factor | Impact on Shipping % |
|---|---|
| Small, light products | Efficient actual weight |
| Temperature sensitivity | Some require special handling |
| Subscription models | Predictable, optimizable |
| Low return rates | Minimal reverse logistics |
Health/beauty shipping breakdown:
| Metric | Low Performer | Average | High Performer |
|---|---|---|---|
| Shipping % | 14-16% | 10-12% | 7-9% |
| Box utilization | 45% | 60% | 80%+ |
| Avg package weight | 1.5 lbs | 1 lb | 0.7 lbs |
| Multi-item orders | 1.2 items | 1.8 items | 2.5 items |
Key optimization lever: Standardized box sizes for common order combinations.
Food and Beverage
Benchmark: 15-22% of revenue
| Factor | Impact on Shipping % |
|---|---|
| Heavy products | Weight-based charges |
| Perishable items | Expedited shipping required |
| Insulation needs | Larger packages |
| Seasonal demand | Peak pricing impact |
Food/beverage shipping breakdown:
| Metric | Low Performer | Average | High Performer |
|---|---|---|---|
| Shipping % | 25-30% | 18-22% | 14-17% |
| Expedited rate | 60%+ | 40% | 25% |
| Package weight | 8+ lbs | 5 lbs | 3 lbs |
| Spoilage rate | 5%+ | 2% | 0.5% |
Key optimization lever: Regional fulfillment to reduce transit time and expedited needs.
Jewelry and Accessories
Benchmark: 5-9% of revenue
| Factor | Impact on Shipping % |
|---|---|
| High value, low weight | Excellent ratio |
| Small packages | Minimal DIM impact |
| Security concerns | Insurance costs |
| Premium expectations | Presentation matters |
Jewelry shipping breakdown:
| Metric | Low Performer | Average | High Performer |
|---|---|---|---|
| Shipping % | 12-14% | 7-9% | 4-6% |
| Insurance cost | 3%+ | 1.5% | 0.8% |
| Avg package size | 8×6×4" | 6×4×2" | 4×4×2" |
| Premium packaging | $5+ | $3 | $2 |
Key optimization lever: Small, secure packaging with branded presentation.
Pet Products
Benchmark: 12-16% of revenue
| Factor | Impact on Shipping % |
|---|---|
| Heavy items (food, litter) | Weight-based charges |
| Bulky items (beds, crates) | DIM weight impact |
| Subscription common | Optimizable patterns |
| Mixed orders | Variable optimization |
Pet products shipping breakdown:
| Metric | Low Performer | Average | High Performer |
|---|---|---|---|
| Shipping % | 20-22% | 14-16% | 10-12% |
| Heavy item % | 60%+ | 45% | 30% |
| Subscription rate | 15% | 35% | 55% |
| Bundle rate | 1.3 items | 1.8 items | 2.5 items |
Key optimization lever: Subscription bundling and regional distribution for heavy items.
Factors That Affect Your Percentage
Product Characteristics
| Factor | Lower Shipping % | Higher Shipping % |
|---|---|---|
| Weight | Dense, heavy | Light, hollow |
| Size | Compact | Bulky |
| Value | High (>$100) | Low (<$30) |
| Fragility | Durable | Fragile |
Business Model
| Factor | Lower Shipping % | Higher Shipping % |
|---|---|---|
| AOV | High | Low |
| Free shipping threshold | High | Low or free all |
| Return policy | Strict | Liberal |
| Shipping speed | Standard | Expedited |
Operational Efficiency
| Factor | Lower Shipping % | Higher Shipping % |
|---|---|---|
| Box utilization | 75%+ | <50% |
| Carrier negotiation | Strong | List rates |
| Zone distribution | Optimized | Random |
| Packaging automation | High | Manual |
Calculating Your Shipping Percentage
Basic Formula
` Shipping % = (Total Shipping Costs ÷ Total Revenue) × 100 `
What to Include
Shipping costs:
- Carrier charges (outbound)
- Return shipping costs
- Packaging materials
- Packing labor
- Insurance
- Duties/customs (if applicable)
Revenue:
- Product revenue
- Shipping revenue charged to customers
- (Exclude discounts, refunds)
Example Calculation
| Component | Amount |
|---|---|
| Monthly revenue | $100,000 |
| Carrier costs | $9,500 |
| Return shipping | $1,200 |
| Packaging materials | $1,800 |
| Packing labor | $500 |
| Insurance | $200 |
| **Total shipping cost** | **$13,200** |
| **Shipping %** | **13.2%** |
Benchmarking Your Performance
How to Compare
Step 1: Calculate your current percentage
- Use the formula above with all costs included
Step 2: Identify your industry benchmark
- Find your category in the tables above
- Note the range (low performer to high performer)
Step 3: Determine your position
| Your Position | Meaning | Action |
|---|---|---|
| Below benchmark | Efficient OR underinvesting | Verify quality isn't suffering |
| At benchmark | Industry standard | Look for optimization opportunities |
| Above benchmark | Optimization needed | Prioritize highest-ROI improvements |
Red Flags
Signs your shipping percentage is problematic:
| Red Flag | Likely Cause |
|---|---|
| 5+ points above benchmark | Major inefficiency |
| Shipping % increasing over time | Losing optimization |
| High damage claims | Packaging inadequate |
| Customer complaints | Speed or quality issues |
| Negative shipping margin | Unsustainable model |
Optimization Opportunities by Impact
Tier 1: High Impact (2-5 percentage points)
| Initiative | Typical Savings | Implementation |
|---|---|---|
| Right-sized packaging | 20-35% shipping | Box recommendation system |
| Carrier negotiation | 15-25% carrier cost | Volume-based contracts |
| Zone optimization | 10-20% shipping | Multi-warehouse strategy |
Tier 2: Medium Impact (1-2 percentage points)
| Initiative | Typical Savings | Implementation |
|---|---|---|
| Packaging material optimization | 15-25% materials | Bulk purchasing, alternatives |
| Return reduction | 20-40% returns cost | Better product info, packaging |
| Shipping method optimization | 5-15% carrier cost | Service level right-sizing |
Tier 3: Lower Impact (0.5-1 percentage point)
| Initiative | Typical Savings | Implementation |
|---|---|---|
| Insurance optimization | 30-50% insurance | Third-party options |
| Labor efficiency | 10-20% labor | Process automation |
| Void fill reduction | 20-30% void fill | Better box selection |
Case Study: Shipping Percentage Reduction
Before Optimization
| Metric | Value |
|---|---|
| Monthly revenue | $150,000 |
| Monthly shipping cost | $24,000 |
| **Shipping percentage** | **16%** |
Breakdown:
- Carrier costs: $18,000
- Packaging: $3,500
- Returns: $2,000
- Labor: $500
Optimization Actions
| Action | Investment | Savings |
|---|---|---|
| Box recommendation system | $150/month | $3,600/month |
| Carrier renegotiation | Staff time | $2,700/month |
| New box inventory | $800 one-time | $900/month |
| Return reduction (better packaging) | $200/month | $600/month |
After Optimization
| Metric | Value |
|---|---|
| Monthly revenue | $150,000 |
| Monthly shipping cost | $16,200 |
| **Shipping percentage** | **10.8%** |
Result: 5.2 percentage point reduction = $93,600 annual savings
Setting Your Target
Realistic Goals by Starting Point
| Current Shipping % | 6-Month Target | 12-Month Target |
|---|---|---|
| 20%+ | 16-18% | 13-15% |
| 15-20% | 13-15% | 11-13% |
| 12-15% | 11-13% | 10-12% |
| 10-12% | 9-11% | 8-10% |
| <10% | Maintain | Incremental gains |
Priority Actions by Shipping Percentage
| If Shipping % Is... | Priority Focus |
|---|---|
| 20%+ | Packaging + carrier contracts immediately |
| 15-20% | Packaging optimization first |
| 12-15% | Process refinement |
| 10-12% | Incremental improvements |
| <10% | Maintain efficiency |
Tracking and Monitoring
Key Metrics to Track
| Metric | Frequency | Purpose |
|---|---|---|
| Shipping % of revenue | Weekly | Overall health |
| Cost per order | Daily | Operational efficiency |
| Box utilization | Weekly | Packaging efficiency |
| DIM weight vs actual | Weekly | Packaging optimization |
| Carrier cost by zone | Monthly | Contract performance |
Dashboards and Reports
Weekly report should include:
- Shipping % (week, month, quarter)
- Average cost per order by carrier
- Box utilization percentage
- DIM weight waste in dollars
- Returns shipping cost
Frequently Asked Questions
What's a 'good' shipping percentage?
It depends on your industry and products. Generally, hitting the average for your industry is acceptable, and achieving the "high performer" benchmark indicates strong optimization. More important than the absolute number is whether you're improving over time.
Should I include returns in shipping cost calculation?
Yes. Returns are a real shipping cost that affects your margins. Excluding them gives you an artificially low percentage and hides optimization opportunities.
How does free shipping affect this calculation?
Free shipping doesn't change your costs—it changes who pays. Include all shipping costs regardless of whether customers paid. Your shipping percentage shows operational efficiency, not pricing strategy.
What if my shipping percentage is very low?
Below-benchmark shipping can indicate strong optimization, but verify you're not underinvesting. Check damage rates, delivery times, and customer satisfaction. If quality is suffering, you may need to spend more strategically.
How quickly can I improve my shipping percentage?
With packaging optimization (highest ROI), many stores see 2-3 percentage point improvements within 30-60 days. Carrier renegotiation takes 60-90 days. Full optimization to high performer status typically takes 6-12 months.
Sources & References
- [1]E-commerce Shipping Benchmarks - ShipBob (2024)
- [2]Retail Industry Shipping Metrics - National Retail Federation (2024)
- [3]Shipping Cost Analysis - Shopify (2024)
Attribute Team
The Attribute team combines decades of e-commerce experience, having helped scale stores to $20M+ in revenue. We build the Shopify apps we wish we had as merchants.