Warehousing & Fulfillment

Explaining order fulfillment costs and pricing

Jules

by Jules

On 2018 M03 20

by Jules

As you're probably aware, order fulfillment is a very important part of running an eCommerce business. If you're leaning towards working with a third-party logistics (3PL) provider, costs are most likely a top concern when you're looking for a company to work with.

3PL costs can be tricky to calculate as they aren't fixed costs: rather, they are variable as they depend on your product requirements and other factors.

In this post, we'll share what eCommerce order fulfillment costs you should expect, in addition to other fees that you may come across.

What are the main order fulfillment costs?

Account setup fee

This is the fee you pay when you register an account with your 3PL. This can include the management and the business related to your account. It can be a one-time fee or a cost paid per transaction.

A cost paid per transaction could be more affordable for small and medium businesses.

Inbound handling

Need to transfer your existing products, or have new products coming to the warehouse? There's a fee for that! You can expect your 3PL to charge you for accepting and handling any inventory that is coming to their warehouse.

Storage

Your inventory will take up space at the warehouse while you're waiting to make a sale, so you can expect warehouse storage fees to apply.

These fees can eat into your budget if you hold on to excess inventory that isn't selling. Having some good inventory management skills can definitely help save on these costs.

Here are other warehousing mistakes you should avoid.

Pick and pack

This fee applies to picking an item and packing it for shipping. Some companies will charge you for picking and packing each item separately. Others will combine all services into one fulfillment fee.

Other value-added services

In addition to the above costs, warehouses can also provide other value-added services that are tailored to your specific business, such as:

  • Sorting
  • Stretch wrapping
  • Order processing
  • Pallet order setup
  • Warehouse Management System (WMS) fees
  • Kitting: Putting separate items that are related together so they can be packaged and supplied in one unit
  • Container vanning: When cargo is loaded into an empty shipping container and sealed in the presence of customs, then loaded onto a ship
  • Devanning: When a container is opened in the presence of customs and all items are taken out.

These processes can be charged per month, rather than per order.

At Easyship, we partner with multiple international warehouses to provide a global fulfillment service for our customers. Better yet, we make sure our warehouse pricing is simple, affordable, and have no hidden fees. Learn more.

This article forms part of our Warehousing & Fulfillment guide. See it here.