# Cost to serve

> The fully loaded cost of taking one order from the click to the door and, where it applies, back again: payment fees, pick and pack, outbound carriage less what the customer paid, the allocated cost of returns, customer contact per order and the per-transaction technology beneath it.

Source: https://barkingcat.ai/terms-of-trade/cost-to-serve/

## Terms of Trade · Edition 2: The trading pack

Definition

The fully loaded cost of taking one order from the click to the door and, where it applies, back again: payment fees, pick and pack, outbound carriage less what the customer paid, the allocated cost of returns, customer contact per order and the per-transaction technology beneath it. It sits between gross margin and contribution margin, and it is the reason a channel can grow revenue while earning less per order.

Field note

Cost to serve is the measure that surprises ecommerce directors when their bumper quarter leads to mass redundancies.

Board question

What is cost to serve per order this quarter, who owns the number, and which of its lines moved?

Applied through

[Commercial Discipline](https://barkingcat.ai/the-cats-whiskers/commercial-discipline/) in the Cat’s Whiskers; [the Review](https://barkingcat.ai/review/) measures against margin, and the [Ecommerce Commercial Diligence](https://barkingcat.ai/investors/ecommerce-commercial-diligence/) read marks every growth assumption against contribution after this line.

Related terms
- [Contribution margin](https://barkingcat.ai/terms-of-trade/contribution-margin/)
- [Returns rate](https://barkingcat.ai/terms-of-trade/returns-rate/)
- [Average order value](https://barkingcat.ai/terms-of-trade/average-order-value/)
- [Weeks cover](https://barkingcat.ai/terms-of-trade/weeks-cover/)

## Contact

steve@barkingcat.ai

Barking Cat Advisory Limited. Registered in England and Wales, company number 17338003.