Operations & Fulfillment

Fulfillment Cost

The total cost of storing, packing, and shipping an order to the customer — warehouse, labor, materials, and postage.

Formula

Fulfillment Cost per Order = Storage + Pick & Pack + Packaging + Shipping

What is Fulfillment Cost?

Fulfillment cost encompasses everything it takes to get a product from your warehouse to the customer: storage, picking and packing labor, packaging materials, and shipping postage.

Fulfillment Cost Components

Storage: Warehouse rent per cubic meter/foot
Pick & pack: Labor to locate, pack, and label
Packaging: Boxes, filler, tape, branded inserts
Shipping: Carrier postage costs
Returns processing: Handling returned items

Example

Storage: $0.50. Pick & pack: $2.00. Packaging: $1.50. Shipping: $5.50. Total: $9.50 per order.

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