26 September, 2023

Understanding Fulfillment Center Pricing & Costs

As the business landscape continues to rapidly evolve, outsourcing order fulfillment is an increasingly-popular way to streamline operations, increase efficiency and boost profits. But if you’re considering outsourcing your fulfillment services, you know that not all third-party fulfillment (3PL) providers are created equal. When it comes to cost, the amount can vary as widely as the services provided.

So, what can you expect for fulfillment pricing, and why? Let’s dive in.

Fulfillment Pricing: A Breakdown

As an independent retailer partnering with a fulfillment center, you’ll typically encounter four main charges: fees for receiving inventory, storage costs, pick and pack fees, and charges for outbound shipping. The frequency and amount of these charges are influenced by various factors like the volume and intricacy of orders, as well as the dimensions of the products themselves. Additionally, added touches like branded packaging or specialized item assembly will also affect your overall fulfillment expenses.

But when partnering with a fulfillment center, there are other costs to consider. These might include a one-time onboarding fee, charges for handling returns, fees for inbound shipping, and account management costs. If you’re looking to enhance your customer’s unboxing experience with custom packaging or need product kitting or assembly, be prepared for some extra charges there as well.

Of course, every fulfillment partner has its own pricing structure. While some might provide a detailed breakdown of each service, others offer a flat-rate charge. The industry doesn’t have a one-size-fits-all pricing model, which means fulfillment centers often tailor their pricing strategies to cater to specific retailer needs.

Why Flat Fee Fulfillment Isn’t Always the Answer

At first glance, flat fee fulfillment might seem like the easiest and most transparent option in the fulfillment industry. But flat fee fulfillment often fails to adequately consider the unique needs and nuances of each business. That’s why many of the largest 3PL providers, including WSI, require a custom quote before providing any pricing. While the process for getting a 3PL quote can seem extensive, there’s a good reason for it.

We believe in custom and comprehensive cost of fulfillment services. Why? Because every client’s needs are different, and thus so are the ways we can save each client money.

For instance, if you’re a retail brand with one centralized fulfillment center, you might be missing out on savings. By distributing inventory across multiple fulfillment centers, you could significantly cut down on shipping times and costs. With an extensive network of over 20 owned and operated warehouse locations throughout the United States, (including four fulfillment centers strategically located from the Midwest to the West Coast, East Coast, and Texas) no one knows this better than WSI.

WSI’s Unique Approach to Fulfillment Pricing

We don’t just offer a service; we offer a true partnership, working with each and every client to find solutions that fit their unique needs. We do our due diligence to learn the ins and outs of your business and tailor our services to provide a perfect fit.

Whether you currently lease or own your warehouse space, we can help. Sometimes that might mean moving inventory into one of our public warehouse locations. Other situations require more creativity, like a recent client who was outgrowing their warehousing situation. But instead of a costly expansion, we worked with them to unlock vertical square footage in their current warehouse, allowing them to save costs by staying where they were.

A Glimpse into WSI’s 3PL Fulfillment Services

Our services are designed to cater to a wide range of needs:

  • Inventory Management: Keep track of your products efficiently.
  • Order Fulfillment & Tracking: Ensure every order reaches its destination.
  • Precise Labeling & Packaging: Professional presentation 99.5% of the time.
  • e-fulfillment / e-commerce: Catering to the digital marketplace.
  • Custom Packaging / Repacking / Assembly: Tailored to your needs.
  • Returns Management: Handling returns smoothly.
  • Retailer Experience: Expertise in B2B compliance, parcel,  TL and LTL management
  • Imported Goods Devanning & Inspection: Ensuring quality at every step.

Fulfillment Costs: The Bottom Line

When you’re looking for a 3PL partner to handle your shipments, remember that price and service are paramount. While pricing can be competitive across 3PLs, it’s the service that truly makes a difference. A 3PL who takes the time to develop a custom quote can save you significantly more than one offering a flat fee.

At WSI, we pride ourselves on delivering top-notch service, ensuring that every client feels valued and understood. If you’re considering outsourcing your fulfillment and want to learn more, speak to one of our expert team members today.