Fulfillment center pricing depends on several key factors including storage space, order volume, labor costs, and the complexity of your products.
Most fulfillment centers charge using a combination of receiving fees, storage fees, pick and pack fees, and shipping costs.
Understanding how these pricing components work will help you budget accurately and choose the right fulfillment partner for your business.
Key Points
- Storage costs are typically calculated per square foot or pallet and vary by warehouse location
- Pick and pack fees depend on order complexity, item size, handling requirements and packaging needs
- Volume discounts become available as your order volume increases, reducing per-unit costs
- Additional services like kitting, special packaging, or returns processing add to base pricing
- Shipping rates can be significantly lower through fulfillment centers with negotiated carrier contracts
What Goes Into Your Receiving Fees?
Receiving fees cover the cost of accepting your inventory into the fulfillment center. These fees may be hourly or by item, depending on the size and complexity of your shipment.
Fulfillment centers charge for the labor and time required to unload your products, inspect them, and log them into their inventory management system. Some centers also include barcode labeling in receiving fees, while others charge separately for this service.
If you ship palletized containers rather than floor-loaded ones, you’ll often pay lower receiving fees since palletized shipments require less labor to process. Your warehousing and distribution partner can help you determine the most cost-effective shipping method.
How Do Storage Fees Work?
Storage fees compensate fulfillment centers for the physical space your inventory occupies. Most centers calculate storage using one of two methods: per pallet or per square foot.
Per-pallet pricing works best if you store full pallets of inventory. Rates typically range from $20 to $40 per pallet per month depending on the warehouse location and climate control requirements. Per-square-foot pricing is more common for smaller items or mixed inventory, usually costing between $1.00 and $2.00 per square foot monthly.
Climate-controlled storage, defined as temperature and humidity controlled space, costs significantly more than standard warehouse space. If your products cannot be stored in ambient storage expect to pay 25-50% more than standard rates.
What Factors Affect Pick and Pack Costs?
Pick and pack fees represent one of the largest components of fulfillment center pricing. These fees cover the labor cost of retrieving items from storage, packing them securely, and preparing them for shipment.
Your pick, pack, and ship costs depend on several factors:
- Order complexity: Single-item orders cost less than multi-item orders that require more picking time
- Item size and weight: Larger or heavier items take more time to pick and require more packing materials
- Special handling: Fragile items, liquids, or products requiring gift wrapping add to labor costs
- Packing materials: Boxes, bubble wrap, and other packaging supplies are usually charged separately
Most fulfillment centers charge between $2 and $8 per order for pick and pack services. However, orders with multiple items or special requirements can cost $10 or more per order.
When Can You Get Volume Discounts?
Volume discounts become available as your order numbers increase. Fulfillment centers offer these discounts because processing higher volumes improves their operational efficiency.
- Storage discounts: Customers using more warehouse space often negotiate lower per-pallet or per-square-foot rates
- Pick and pack discounts: Processing 500+ orders monthly typically qualifies you for tiered pricing
- Shipping discounts: Higher volumes give you access to better negotiated carrier rates
Track your monthly order volume closely to identify when you cross into higher discount tiers. Some fulfillment centers also offer seasonal volume commitments that lock in lower rates during your peak periods. Your e-commerce fulfillment provider should review your pricing quarterly to ensure you’re receiving appropriate discounts.
What Additional Services Impact Your Total Cost?
Beyond basic storage and fulfillment, several value-added services can increase your monthly costs. These services solve specific business problems but require additional labor and resources.
Kitting services combine multiple products into a single bundled unit. This service typically costs $1-3 per kit depending on complexity. Returns processing adds $2-5 per return to handle inspection, restocking, or disposal.
Custom packaging and branded inserts create a better unboxing experience but add $1-4 per order depending on materials used. An Inventory management system with real-time tracking may include monthly software fees of $50-500.
Discuss your specific needs upfront to get accurate pricing that includes all services you’ll actually use. Many businesses underestimate these add-on costs when budgeting for fulfillment.
Partner With Meyer for Transparent Fulfillment Pricing
Fulfillment center pricing doesn’t have to be complicated. Meyer offers straightforward pricing based on your actual storage needs, order volume, and service requirements.
Our customized order fulfillment services help businesses optimize their fulfillment costs while maintaining high service levels. We provide detailed pricing breakdowns so you know exactly what you’re paying for. Contact Meyer today to discuss your fulfillment needs and receive a personalized pricing quote for your business.