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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

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 bring great added value. Depending on the provider, different value-added services are possible: from simply enclosing a flyer with a discount code, to packaging in tissue paper, to completely taking over 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.

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.

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Email: info@warehousing1.com

Phone: +49 30 629 3898 0


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