Variable Costs: Total Variable Order Costs

Variable Costs measures the total variable order costs—including handling, gateway fees, shipping, and other costs—that change with each order.

Formula

Variable Costs = Handling Cost + Gateway Cost + Shipping Cost + Other Cost

Formula Components

Metric	Definition
Handling Cost	Per-order fulfillment and handling fees
Gateway Cost	Payment processor and transaction fees
Shipping Cost	Carrier shipping charges
Other Cost	Additional per-order, per-item, or percentage fees

Metadata
Type	Currency
Data Source	Shopify, Upstack Costs
Aggregation	Sum

Example

Your store processed 1,842 orders in March with the following variable costs:

Cost Type	Total
Handling fees	$3,684
Gateway fees	$4,238
Shipping costs	$9,210
Other costs	$1,289
Variable Costs	$18,421

How It Works

Variable Costs aggregates all per-order costs that scale with order volume. These costs are deducted from CM1 (Gross Profit) to calculate CM2 (Contribution Margin after variable costs). Tracking variable costs separately helps isolate product margin from operational costs.

When to Use

Scenario	Action
Calculating CM2	Subtract Variable Costs from Gross Profit
Analyzing unit economics	Track per-order variable burden
Setting pricing floors	Ensure prices cover COGS + Variable Costs
Evaluating fulfillment partners	Compare handling and shipping costs

Metric	Relationship
COGS	Product costs (separate from variable costs)
Other Cost	Component of Variable Costs
Variable Costs Per Order	Average variable cost per order
Variable Costs %	Variable costs as % of net revenue

See all COGS metrics →

RC Other COGS Variable Costs/Order

⌘I

​Formula

​Formula Components

​Example

​How It Works

​When to Use

​Related Metrics

Formula

Formula Components

Example

How It Works

When to Use

Related Metrics