Knowing how much to expect while fulfilling orders for your company is vital to the success of your business. Fulfillment costs can be broken down into four basic categories. With these there might be a few more that your business could or could not incur.
Receiving
3PLs will most likely charge for receiving and putting away inventory. Receiving can be charged in a few different ways. It can be charged by hour, as a flat fee, or by the pallet.
Storage
You will have to pay for the amount of space that your inventory takes up in the warehouse each month. There are different ways to calculate the price of the storage. The cubic storage model is one of the most precise. It charges you for the air space your product occupies. Then there are some warehouses that charge per pallet.
Pick and Pack Fulfillment Fees
The pick and pack area charges for the pulling of your orders, packaging them, and labeling them. The most common way a fulfillment center will charge for the pick and pack is to have the fee cover picking the first item, plus a smaller additional fee for each additional item. So, if an order only has one item, the initial fee will be charged and then if another SKU is added to the order, there will be a small extra charge.
Shipping Costs
These costs are charged by the carriers, not your fulfillment warehouse but your 3PL can be a big help in getting discount and good deals with those carriers. Here at Launch Fulfillment, we want to ensure you get a good deal on great shipping.
There are a few other charges that could come up. Things like reverse logistics, kitting, or warehouse fees. Keep an eye out for fulfillment companies that fit your price range. Ultimately its up to you on what you need and how much you are willing to spend. Third party logistics companies are a great thing to have in your corner.