"Free shipping should be a marketing expense, not a logistics cost."
Why this matters in practice
Classify free shipping under customer acquisition costs (CAC) instead of costs of goods sold (COGS) to prevent operational misalignment. By recognizing the marketing intent behind free shipping, businesses can accurately evaluate operational efficiency and cost-effectiveness. This clarity prevents misaligned incentives that can cause friction between marketing and operations. In practice, separating these costs means marketing teams take ownership of the costs associated with customer acquisition strategies, ensuring logistics retains focus on fulfillment performance and efficiency.
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Related Operational Failures
Failures that commonly trigger this insight.
Seen in Scenarios
Operational situations where this insight appears most often.
Operational Readiness Check
Checklist controls that help prevent repeat incidents.
Checklist item: Every order has a clear owner
Someone is responsible for resolving stuck orders.
Checklist item: Carrier pickup times are documented
Ensures same-day shipping promises are met.
Checklist item: Refunds are processed within 48 hours
Builds trust for future purchases.
View full operational readiness checklist
Review all active readiness controls.