Comparing Ecommerce Shipping Costs in Australia: 2023 Guide

Every example and amount on this page is illustrative. It shows the method and is not a benchmark, a quote or advice.

What the 2023 shipping-cost figure actually measures

A 2023 ecommerce shipping-cost figure is meaningful only when it identifies whose cost it represents. A carrier quote is the amount a postal or courier service estimates for transporting a parcel under stated conditions, such as origin, destination, weight, dimensions, service level and delivery speed. It is a transport price, not necessarily the amount ultimately invoiced or the merchant’s total fulfilment expense.

The shipping fee charged to a customer is a store-pricing decision. It may be calculated at checkout, set as a flat fee, included in the product price or shown as free shipping. “Free” describes what the customer pays at checkout; it does not mean the carrier or fulfilment provider charges nothing. The fee is also not automatically equal to the carrier’s quote.

The fulfilment cost absorbed by the merchant is the cost the business carries to dispatch the order. Depending on the operation, that can include the carrier charge, packaging, pick-and-pack labour and a fulfilment provider’s handling fee. A figure used to set checkout shipping should focus on the customer fee and conversion rules. A figure used to assess order economics should use the merchant’s absorbed fulfilment cost. A carrier quote is useful for checking a delivery option, but it is not a profitability measure.

Keep the tax basis consistent as well. An amount quoted by a carrier, charged to a customer and recorded as an expense may each be presented with or without GST. Label the currency, GST treatment and delivery conditions beside any 2023 figure so these measures are not compared as though they were interchangeable.

A simple formula for the real cost per order

Start with the cost paid to prepare and send one order. The basic formula is:

Use this figure when comparing carriers, service levels, fulfilment methods or the effect of a shipping surcharge. It measures what shipping consumes before considering what the customer paid for delivery. Keep every input on the same tax basis: if the carrier invoice and packaging costs include GST, include the applicable GST consistently; if you are measuring recoverable business costs excluding GST, exclude it consistently instead.

For the amount shipping contributes to an order's economics, use a second version: net shipping cost per order = postage + packaging + surcharges + insurance + applicable GST − customer shipping revenue. Customer shipping revenue means the delivery amount charged at checkout, not the product revenue. This is the right measure when assessing a free-shipping threshold, a flat shipping fee or the contribution left after fulfilment.

Do not subtract customer shipping revenue when the question is operational cost. A carrier comparison still needs the gross shipping cost, even if the customer pays $10 at checkout. Subtract it only when measuring the order's contribution. Apply the same rule to every option being compared, and allocate shared costs such as a packaging purchase or monthly carrier surcharge per order using a consistent method.

• Gross shipping cost per order = postage + packaging + surcharges + insurance + applicable GST.
• Net shipping cost per order = gross shipping cost per order − customer shipping revenue.
• Use gross cost for carrier and fulfilment decisions; use net cost for contribution and shipping-pricing decisions.

A worked example in Australian dollars

Consider one domestic Shopify order where the customer pays AUD 9.95 for shipping at checkout. Assume every figure below is on the same GST basis; mixing GST-inclusive and GST-exclusive amounts would make the result misleading.

The merchant’s shipping-related cost is AUD 14.00: AUD 12.00 paid for postage, AUD 1.20 for packaging and AUD 0.80 in carrier or delivery surcharges.

The shipping contribution is therefore:

AUD 9.95 charged to the customer − AUD 14.00 shipping-related cost = −AUD 4.05.

The order has a negative shipping contribution of AUD 4.05. In other words, the merchant is subsidising delivery by that amount before considering product cost, payment fees, advertising, returns or other operating costs. This is a worked example, not an Australian average or a 2023 market benchmark.

If the merchant describes delivery as “free”, the arithmetic does not change. The customer charge becomes AUD 0.00, so the shipping contribution becomes AUD 0.00 − AUD 14.00 = −AUD 14.00. The cost still exists; it has simply moved from the checkout line to the merchant’s margin.

The figure to act on depends on the question. The AUD 12.00 postage line is useful for reviewing the carrier quote. The AUD 14.00 total is the relevant operating cost for evaluating the delivery option. The −AUD 4.05 result shows what the chosen checkout charge contributes toward that cost. For GST treatment and free-shipping implications in Shopify, see Shopify GST Australia: The Cost of Free Shipping, and a Free Year of ORVX Core.

How to compare delivery options fairly

Compare delivery options using the same shipment profile, not the headline price on each carrier’s website. Record the parcel’s packed length, width, height and weight; origin and destination postcode; delivery service; pickup arrangement; and whether the quoted amount includes GST. A 500 g satchel, a 5 kg carton and an oversized cubic parcel are different comparisons even when the product is the same.

Use published rates where the service offers a calculator or rate card, such as Australia Post services. Treat eParcel as the business-account service being quoted, rather than assuming a retail-postage price is a valid proxy. For StarTrack, TNT, Couriers Please, Toll and FedEx, use the relevant account or sales quote when rates depend on contract terms, pickup location, fuel or other accessorial charges. Save the quote date and its assumptions.

Keep zones consistent. Test the same metro-to-metro, metro-to-regional and interstate postcode pairs, rather than comparing one carrier’s easy lane with another’s difficult lane. Separate standard, express and time-definite services: a faster option answers a different operational need and should not be judged against standard delivery on price alone. Also record whether pickup is included, charged separately, restricted to certain days, or requires the merchant to lodge parcels.

Put every result on one GST basis. If a quote is AUD 11 including GST, its ex-GST amount is AUD 10; if another is AUD 10 ex-GST, its customer-facing equivalent is AUD 11. Compare like with like, then apply the basis used in your margin reporting. The fair decision is the rate for the actual order profile and delivery promise—not the lowest displayed number.

• Australia Post: use the public parcel or business-service calculator for the specified size, weight, postcodes and speed; use an eParcel quote when the order will ship under that account.
• StarTrack, TNT, Couriers Please, Toll and FedEx: request or reproduce the account quote with the same parcel, zone, pickup and delivery requirements, and check for separately listed surcharges.
• For each option, retain the rate basis: published or quoted, inclusive or exclusive of GST, pickup terms, service level and quote validity.

The errors that distort the number

Dimensional weight can make a light parcel expensive. Carriers may price a shipment using the greater of its actual packed weight and a volumetric calculation based on length, width and height. A 1 kg product in a large carton can therefore be charged at 4 kg, depending on the carrier’s divisor. Use the packed dimensions and the carrier’s published rule, not the product’s weight alone. Weigh the completed parcel too: a catalogue weight that excludes tissue, inserts, tape or the carton understates the charge.

The quoted label price may also exclude fuel, remote-area, residential, peak-period or other accessorial surcharges. Check the final invoice rather than treating the base rate as the delivered cost. Returns distort the result in a different way. If 20 orders generate $200 of outbound freight, but two returns add $30 in return labels and $10 in replacement packaging, the shipping-related cost is $240, or $12 per original order—not just the $10 outbound average. Packaging inventory belongs in the same check: $600 of cartons, mailers and void fill used across 1,000 orders adds $0.60 per order, while obsolete or damaged stock should not be silently assigned to current parcels.

Keep the GST basis consistent. A GST-registered business may compare supplier invoices excluding GST, while a consumer-facing checkout amount includes GST; mixing the two overstates or understates the gap. The GST treatment of free shipping deserves a separate check. Marketplace fees can also apply to the order total, shipping charge, or both. They are not carrier freight, but they reduce the shipping revenue available to cover it. Finally, a single average can hide the decision that matters: $9 metro freight and $18 regional freight can appear as $10.80 across 80% metro and 20% regional orders. Keep metro, regional and remote cohorts separate before setting a threshold or free-shipping rule.

What to do with the answer

Use the result as an operating number, not a universal benchmark. First, set checkout thresholds by order economics. If a typical order contributes AUD 32 before shipping and the business absorbs AUD 8 of delivery cost, a free-shipping threshold should leave enough contribution to cover that AUD 8 and other variable costs. Test the threshold against actual order values rather than choosing a round number by habit.

Take the same shipment profile to carriers when requesting a rate review. Show parcel dimensions, weights, destinations and monthly shipment counts, then compare the proposed rate with your realised cost per delivered order. A lower label price is not necessarily lower total cost if it brings higher surcharges, packing labour or delivery-related refunds.

Choose service levels by product and destination. A premium service may be appropriate for urgent, high-value orders; a slower option may protect contribution on low-value products where the delivery charge consumes a larger share of revenue. For marketplace fulfilment, compare the marketplace’s total fulfilment charge and required service level with your own pick, pack, postage, storage and return costs. Treat the result as a channel-level profit comparison, not just a shipping-price comparison.

• Monitor shipping contribution by product, destination and order value. For each segment, compare shipping revenue collected with carrier charges, packaging, fulfilment labour, surcharges, refunds and delivery-related losses. A product can appear profitable overall while losing money to ship to one region or below a particular order value.
• Review the measure monthly and after carrier, packaging, product mix or checkout-policy changes. In Shopify, connect store data to ORVX to inspect product-level profitability alongside revenue, costs and returns; ORVX reports realised revenue from delivered orders rather than counting cancelled or returned orders as revenue.

There is no single shipping-cost figure that answers every operational question. Use the carrier-cost measure for rate negotiations, the delivered-cost measure for product and margin decisions, and the customer-versus-merchant contribution for checkout pricing. Recalculate the same way across services and order segments so an Australian ecommerce business can act on comparable numbers rather than headline rates.

General information only: tax, duty and import rules change and depend on your situation, so check with an accountant or the official source before acting.