4 shipping KPIs every operations manager should track to cut costs and win customers

Shipping is one of the biggest expenses for e-commerce brands—and one of the biggest factors in whether a shopper becomes (and stays) a customer. Hidden costs, late deliveries, or avoidable support tickets can eat into margins and drive customers away. In fact, 76% of shoppers said that an unacceptable delivery experience would strongly or somewhat affect their decision to order from that company again. 

That’s why the smartest operations teams treat shipping performance like any other business function: measurable, trackable, and improvable. By keeping a close eye on the right KPIs, you’ll know whether your shipping operation is healthy, or whether it’s costing you money and customers.

Here are 4 KPIs every operations manager should track to uncover inefficiencies, keep costs under control, and deliver the reliable experience customers expect.

Shipping KPI #1: OTIF (On-time, In-full)—your on-time performance scorecard

On-time delivery isn’t just about happy customers—it’s about preventing lost sales. 30% of consumers say they won’t buy from a brand again if an item arrives late.

OTIF measures the percentage of orders that are delivered both on time and in full. While 100% is the goal, a realistic benchmark is 80–100%.

Many factors can contribute to a low or high OTIF, including:

• inventory availability
• order volume fluctuations
• SKU count
• associate expertise level, etc.

As the team lead, you’ll be keenly aware of what is a realistic OTIF to track, given the nuances of your supply chain, helping you spot weak points before they turn into lost revenue.

Shipping KPI #2: Shipping cost as a percentage of AOV—your margin watchdog

Shipping is one of the largest line items in any supply chain. Monitoring shipping cost as a percentage of your average order value (AOV) reveals whether your rates are competitive—or if margins are quietly slipping away.

Our 2023 E-commerce Benchmarks Report show most brands keep shipping costs at 10% or less of AOV.

‍

You can also track total fulfillment spend—including labor, storage, pick and pack, and parcel fees—which can reach 20% of AOV. If you’re above these ranges, it’s time to investigate savings opportunities.

Shipping KPI #3: Number of WISMO queries—the hidden cost of poor visibility

Every “where is my order?” (WISMO) ticket is wasted overhead, and a red flag for your shipping program. High WISMO volume often signals missing or unclear tracking updates, which frustrates customers and clogs up your support team. For example, more than 80% of consumers expect to receive regular updates about the status of their products, from the time the order is placed until it arrives in their hands. This includes notifications for purchase confirmation, initial shipment notification, and final delivery.

The goal is to drive WISMO volume down with proactive notifications and reliable tracking. Lowering WISMO not only reduces unnecessary service costs but also creates a smoother experience that helps win customers back for repeat purchases.

Shipping KPI #4: CLTV for customers with returns—measuring margin protection

Returns can make or break profitability with a whopping 97% of consumers stating they would be more likely to purchase an item in the future from a company that provided them with a positive return experience in the past.

To see whether your returns policy is protecting or eroding your revenue, track customer lifetime value (CLTV) for shoppers who’ve returned at least one item.

If returners spend less over time, it may indicate your process is too costly or frustrating. If they spend more, it signals your returns strategy builds trust and drives higher long-term value. Either way, measuring this KPI helps you see the financial impact of returns so you can adjust policies and fees before margin erosion sets in.

How to improve your shipping KPI results

Tracking these KPIs is just the start. The next step is knowing how to improve them.

Download our Operator’s Guide to Healthy Shipping for step-by-step strategies to reduce costs, streamline fulfillment, and deliver a shipping experience that helps you win customers

‍

Like the old adage by Peter Drucker, “You can’t improve what you don’t measure.” By identifying the important KPIs for your operations team, you can identify your impact on the customer experience, improve any weaknesses, and prove the value of a world-class operations team. 

Read More

Do shoppers hate your shipping costs? Here's how to tell if your shipping fees are attracting loyal customers or deterring them.

‍