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.
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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.
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:
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 CCG17,00€ - 13,00€ / month |
Storage per box (4/8/16)1,30€ - 3,00€ / month |
Base price0,75€ - 1,60€ / order |
Pick0,15€ - 0,50€ / pick |
Packing material0,20€ - 1,20€ / order |
ShippingVaries depending on method |
Store connectionUp to 20.000€* |
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.
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.
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.
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.
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.
No fixed costs and long-term rentals, billing only according to actual use of space and services
Selection from a broad network reduces transport times and costs, specialized locations enable economies of scale
Fast and smooth connection without high initial investment for each new location in your logistics network
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