"Free shipping boosts CAC, not COGS. Align accordingly."
Hannah Martinez

Why this matters in practice

Classifying free shipping under logistics skews COGS, confusing financial transparency and altering incentive structures wrongly. In reality, free shipping enhances customer acquisition by lowering perceived barriers to purchase, making it rightly part of marketing expenses. For Shopify operators, integrating these costs into CAC encourages growth-driven strategies where marketing and operations are in sync. By doing so, expectations across departments align with the strategic aim of increasing revenue, not disrupting service levels. Reclassifying these costs prevents operations teams from making decisions under false financial pressures, preserving service quality while enabling precise attribution of marketing expenditure.

Share

If this reflects something you've seen, share it with your team.