One of the greatest advantages of using an order fulfillment company to handle the shipping and logistical aspects of your business is the significant savings you can enjoy, both on your shipping costs as well as your shipping-related overhead, such as storage, power, and of course, payroll.
Here are the fees you will encounter when getting quotes; please note that the prices indicated are merely there to give you an idea of what to expect; they will necessarily vary depending on your particular situation.
Setup Charge – This fee is normally assessed a single time when you open your account. It should range from $200 to $500, and covers everything from software, shopping cart integration and account setup, to order testing.
Storage and Inventory Management – Your inventory takes up space in the warehouse, and needs to be handled and moved with the care it deserves. Most order fulfillment companies will charge a fee per square or cubic foot. The usual range is $0.25 to $0.50 per cubic feet of inventory.
Account Management – This fee, usually about $100 a month, covers all the clerical and administrative work maintaining your account entails.
Receiving Fees – The receiving fees will apply to the cost of receiving your merchandise, entering it in inventory and bringing it to its designated area in our warehouse. It usually runs about $40 per hour, and is normally billed in half-hour increments.
Pick and Pack – Sometimes called the ‘bread and butter’ of the order fulfillment industry, the pick and pack fee is charged on every order prepared and shipped by the order fulfillment company. Typical costs range from $2.50 to $6 or more per order, with an extra charge of $0.40 to $1 (or more) per individual item in the order. This fee usually covers the cost of shipping materials, as well. Other prices can apply to add flyers or marketing materials to each order, or to perform light assembly on your items prior to shipping.
Shipping Fees – These are the fees charged by the shipping companies themselves to the order fulfillment center. As a customer, you can expect a rebate from 10 to 25% off the advertised UPS rate. Be aware that certain order fulfillment companies do not offer discounted UPS rates. In general, there are no discounts from published rates when shipping with Canada Post.
Return Fees – Return fees are charged when a customer returns their purchase. Usually ranging from $3 to $5, these cover the expense of unpacking your order, verifying it and returning your items to inventory.
Please note that all prices are based on standard shipping boxes. Prices can and will vary depending on the nature, size and weight of what you’re actually shipping.
These are the most common fees, that most if not all order fulfillment companies will have in common. Other fees can apply for additional services, such as:
- Product photography
- Order cancellation
- Rush service
- Inventory control
Remember that in all cases, almost everything is negotiable, to a certain degree. In order to be able to negotiate your order fulfillment and shipping fees, you must bring something to the table, and that’s volume.