Ecommerce fulfillment costs can vary significantly depending on several factors, including the type of products, the volume of orders, and the services required. Generally, these costs include receiving, storing, picking, packing, and shipping products, as well as handling returns and managing inventory.
Receiving costs. these fees cover the process of accepting and processing inventory at a fulfillment center. They can range from $25 to $50 per hour or be charged per pallet, typically between $5 and $15.
Storage costs. fulfillment centers charge for storing products, often based on the space used. This can be calculated per cubic foot, with rates around $0.30 per cubic foot per month, or per pallet, which might be $5 to $40 per month.
Pick and pack fees. these cover the labor costs of selecting items from storage and packaging them for shipping. Fees typically range from $3 to $5 per order, with additional charges for extra items in an order.
Shipping costs. this is often the largest expense in fulfillment. Shipping fees vary based on the destination, weight, and dimensions of the packages. Fulfillment centers often negotiate discounts with carriers, which can be passed on to clients.
Additional fees. there may be one-time setup fees ranging from $100 to $1,000, monthly account management fees between $75 and $250, and fees for handling returns or providing custom services like kitting or gift wrapping.
Overall, ecommerce fulfillment costs can account for up to 20% of a business’s revenue, depending on the scale and complexity of operations. Understanding these costs is crucial for accurately pricing products and maintaining profitability.