What is Cost Per Order (CPO) and how do you calculate it?

September 22, 2020 3PLFulfillment

Cost per order (CPO) is the total calculated cost that is incurred by a customer making a purchase and helps determine profit made from a single order. Reference the below image to understand how to calculate CPO. Holding everything else constant, a lower CPO translates to greater profitability.

Looking to reduce your CPO?
Assess your storage and warehousing costs. It may be best to outsource your fulfillment needs to a dedicated 3PL. Some may think it’s cheaper and more efficient to manage fulfillment in-house, however, many businesses actually grow faster while reducing costs by working with a 3PL.

 

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