Fulfillment is the cost most underestimated by e-commerce businesses. It includes picking, packing, outbound shipping, and reverse logistics for returns. If not properly calculated, NCM looks positive on paper but is negative in practice.
Shortcut using data you already gathered for other questions in this wizard: your courier's monthly invoice (shipping carrier) ÷ number of orders that month ÷ your AOV. Include picking and packing if you outsource them to a logistics operator — it's on the same invoice.
With 20% fulfillment and 30% gross margin, NCM before returns is already 10%. Any additional returns push it negative. This is the most common value-destruction cycle in e-commerce: volume grows, losses grow.
| Status | Range |
|---|---|
| Healthy | < 12% of AOV (picking + shipping + returns) |
| Alert | 12–20% of AOV |
| Critical | > 20% of AOV (logistics destroys the margin) |
Last-mile negotiation is the most direct lever. With 500+ monthly shipments you have real negotiating power with couriers. Each percentage point reduction in fulfillment converts directly into net profit.
← Calculate your Fulfillment Rate free on Unit Economics Calculator