Fulfillment Costs Explained: Part 1November 12, 2014
Order fulfillment is a large and complex part of the ecommerce industry. As such, managing it can take a lot of time and resources. But by outsourcing the process, you’ll be able to focus better on running your business. As you look for a third-party fulfillment partner, you’ll probably notice that this convenience can come with multiple types of fees. Everyone’s pricing structure is different. That said, here is a list of common fees you’re likely to encounter when looking for a fulfillment partner. [more]
Setup Fees: Many fulfillment companies charge new clients a one-time setup fee to integrate them into their warehouse and system. The fee generally covers things like shopping cart integration (and other IT requirements), warehouse space setup, and initial inventory receiving.
Inventory Fees: These types of fees can vary between companies and can include things like inventory management, long-term storage, and inventory receiving and handling.
Pick, Pack and Ship: This type of fee arises when warehouse staff completes orders by picking items from inventory, packing them, and shipping them off to the customer. Ideally, the fee is offset by the fact that the efficiency of the system allows you to purchase and store products in bulk, manage inventory, and accurately track orders. Depending on the size of orders and/or types of products, some companies may also charge additional order/weight handling fees.
Packaging Fees: Some companies have free stock packaging options available, but that cost may actually be hidden elsewhere on your bill. Plus, you may incur fees for more elaborate or custom packaging. At Fulfillment Works, we offer discounted packaging because we go straight to the manufacturer and buy in bulk.
In our next post, we’ll cover some fulfillment fees that fall under the umbrella of account management and tech support.