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How much does fulfillment cost?

Fulfillment costs depend on several factors that are often difficult for retailers to estimate when searching for an external fulfillment service provider. On this page, we have compiled some valuable information designed to clarify the varying expenses involved in fulfillment and to provide you with an initial overview of what outsourcing to third-party fulfillment providers might entail for you.

Table of contents

  1. What do fulfillment costs depend on?
  2. What are typical prices for fulfillment?
  3. Partial costs in fulfillment simply explained
  4. FAQ
  5. Sustainably optimize fulfillment costs

What do fulfillment costs depend on?

Fulfillment refers to the execution of all activities involved in a customer order and associated with order processing. Fulfillment costs thus combine the costs of goods receipt, storage, picking, services and shipping. The more complex the supply chain, the higher the costs.

Warehousing1 has been able to identify the following factors from the day-to-day business of our account managers that have a direct impact on fulfillment costs:

  • Product attributes such as the category of goods, size and weight
  • Order attributes such as the number of items and SKUs per order
  • Shipping method: express or standard, European or worldwide
  • Additional services such as enclosing a flyer or taking over returns management

What are typical prices for fulfillment?

Based on the insights we have gathered in the logistics industry over the past years, we have assembled an overview of representative common market prices for you therafter. However, by no means are these amounts binding and are merely intended as a guidance.

Storage per EPAL CCG1

7,00€ - 13,00€ / month

Storage per box (4/8/16)

1,30€ - 3,00€ / month

Base price

0,75€ - 1,60€ / order

Pick

0,15€ - 0,50€ / pick

Packing material

0,20€ - 1,20€ / order

Shipping

Varies depending on method

Store connection

Up to 20.000€*

* free of charge with WH1+

The partial costs in fulfillment simply explained

Goods receipt

The price for goods receipt depends mainly on how the goods are delivered to the warehouse keeper. Palletized goods are often easier to handle than non-palletized goods. Single-variety cartons can be staged as is for picking, while mixed ones must first be sorted. This means more or less work for the warehouse keeper, which is reflected in the final price for the service.

Storage

The monthly price for fulfillment depends mainly on the type of goods and the type of warehouse required as a result. Do you have temperature-sensitive goods such as medicines or food? Then a cold storage will be necessary, whose higher energy costs will be reflected in the price. If there are a large number of SKUs for your project, the storage will be more complex, more space-intensive and therefore also more expensive.

Picking

The price for picking depends on the number of picks required, as each pick of a SKU from the warehouse represents time and costs for the warehouse keeper. The more different SKUs and thus items to be picked, the higher the costs for Pick & Pack. After the simple composition of the orders, there is the possibility to use additional services.

Special services & extras

For the fulfillment customer, special services result in additional costs, but these can add a great deal of value and are therefore well worth it. Depending on the provider, different value-added services are possible: from the simple insertion of a flyer with a discount code, to packaging in tissue paper, to the complete takeover of returns management.

Shipping

Generally, the cost of shipping depends on the size and weight of the package and thus the nature of your products. For small items such as jewelry or books (up to 1 kg and 5 cm in height) there is the possibility of cheap shipping as merchandise mail. For oversized goods like furniture, the shipping cost will be correspondingly higher. Some fulfillment service providers can offer you partially advantageous shipping conditions, which they negotiated with the corresponding shipping service provider beforehand.

FAQ

What are fulfillment costs?
Fulfillment costs are all the expenses that are generated during the processing of an order. They depend on numerous factors and vary from service provider to service provider.
What are fulfillment costs made up of?
Fulfillment costs consist of expenses for warehousing, pick and pack, in addition to shipping. Moreover, costs for value added services (VAS), such as the return management, may be added on top.
How much does it cost to connect a store system to a warehouse management system (WMS)?
In some cases, a store connection can cost up to 20,000€ - depending on its complexity. Yet some interfaces, such as between JTL and Shopify, may already exist and can thus be implemented easily and cost-effectively.
How can you optimize fulfillment costs?
To optimize costs for external fulfillment, it is important to compare offers from different fulfillment service providers. In this regard, costs and service quality should always be weighed up.

Optimize fulfillment costs sustainably

Flexible contracts

No fixed costs and long-term rentals, billing only according to actual use of space and services

Ideal implementation

Selection from a comprehensive network reduces transport times and costs, specialized locations enable economies of scale

Scalable integrations

Fast and smooth connection without high initial investment for each new location in your logistics network

Talk to a logistics expert now.

Would you like to start right away or do you still have questions regarding the cooperation? Simply fill out the contact form now to receive a personal response within 24 hours.


Email: info@warehousing1.com

Phone: +49 30 629 3898 0


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