"Free shipping is a marketing cost, not just a logistics expense."
Supply Chain Analyst

Why this matters in practice

Reclassifying free shipping under marketing spend rather than logistics costs, like Cost of Goods Sold (COGS), shifts how a Shopify store aligns its operational goals. By including free shipping in Customer Acquisition Cost (CAC), you establish clear ownership and align incentives across teams. Marketing sees it as leverage to drive customer acquisition and traffic, while logistics efforts target fulfillment efficiency. Without this alignment, operational silos form: marketing inflates traffic to meet volume targets, logistics buckles under capacity pressures, and profit margins shrink as finance manages unexpected liabilities. To maintain sustainable economics, document free shipping not just as a cost but a strategic tool in customer acquisition planning, with structured accountability and cross-departmental alignment.

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