'What does shipping cost you?' — most sellers answer with the freight rate and miss the other four lines. The complete formula for cost per delivered order, and how to calculate yours in an afternoon.
The five components
1) Base freight: what the AWB cost. 2) Surcharges: fuel, remote-area, COD fee — the add-ons that arrive on the invoice. 3) RTO share: (forward + return cost) × RTO rate ÷ delivered rate — the refused-order cost spread over successful ones. 4) Packaging: ₹10–25/order. 5) Platform fees: aggregator markup, app subscriptions amortised.
The delivered-order denominator
Divide by delivered orders, not shipped — 100 shipped at 80% delivery means each delivered order carries 1.25 shipments of cost. ₹70 freight is actually ₹87.50 before anything else. The number sellers quote vs the real number is usually off by 30–50%.
The worked example
₹65 freight + ₹8 fuel surcharge + (₹120 RTO cost × 20% RTO = ₹24) + ₹15 packaging + ₹5 platform = ₹117 true cost per delivered order. The '₹65 shipping' seller is actually spending ₹117 — margin math runs on the real number.
The monthly tracker
Six numbers on a sheet: orders shipped, delivered, freight total, surcharge total, RTO count, packaging spend. The formula computes itself — track monthly and watch what moves it.
Pure Parcel runs the whole stack described here — one place for every carrier.
See how →The playbook
Sum all five lines
Freight + surcharges + RTO + packaging + fees.
Divide by delivered
Per delivered order — the honest denominator.
Track monthly
The trend line is the real signal.
Attack the biggest line
RTO or packaging usually — not the freight.
