The Hidden Cost of Same-Day Delivery Promises

Speed sells. Customers love fast delivery, and promising same-day or next-day has become a competitive necessity for many D2C brands. But speed is expensive—often far more expensive than brands realize.

Here's how to calculate whether your delivery speed promises are actually worth it.

The True Cost of Speed

When brands calculate delivery costs, they typically look at the base shipping rate. But same-day and next-day delivery add layers of hidden costs:

The Conversion Lift Myth

The common justification: “Fast delivery increases conversion rates.” And it does—but by how much? Our analysis of 12 D2C brands shows:

• Same-day delivery increases conversion by 8-15% vs. 3-5 day delivery
• But the incremental orders are often lower-value and higher-return
• Net contribution margin on same-day orders is typically 40-60% lower

A Smarter Approach

Rather than blanket same-day promises, consider these strategies:

1. Tiered delivery pricing: Let customers choose speed and pay accordingly
2. Geographic prioritization: Offer same-day only in high-density, high-margin pincodes
3. Order value thresholds: Same-day free above ₹2,000, paid below
4. Product-level rules: Fast delivery for high-margin items only
5. Clear communication: “Order by 2 PM for next-day” reduces same-day pressure

Calculating Your Break-Even

Before committing to speed promises, calculate:

1. Your incremental cost per same-day order (use the table above as a starting point)
2. Your average order contribution margin
3. The conversion lift required to break even
4. Your actual measured conversion lift from speed

If the required lift exceeds your actual lift, you're subsidizing convenience at the expense of profitability.