Fulfillment Center Pricing - How Much Does Outsourcing Fulfillment Cost

eCommerce has many components and handling it all yourself can quickly become overwhelming and inefficient.

To improve your business and maximize profits, you need to utilize tools, outsource processes, and use automation.

To run a profitable eCommerce business, you must ensure that your order fulfillment is both effective and affordable. One way to achieve this is by outsourcing fulfillment to a third-party logistics (3PL) company.

Outsourcing can save a lot of time, and it means you can trust the experts to do what they do best while you get to focus on what you do best.

While outsourcing things like your eCommerce fulfillment can be a boon to your business, the downside is that nobody will do your fulfillment for free.

In this guide, we look at what you can expect to pay when outsourcing to a fulfillment center, and four ways to save more money.

What Is a Fulfillment Center (or 3PL)?

A fulfillment center is also called a third-party logistics company (3PL). This is a logistics service that does fulfillment, warehousing, and inventory management on your behalf.

However, fulfillment costs have a very real effect on your bottom line. There will be a cost to move products from your warehouse to your customers. The 3PL will pass on the costs for receiving, storing, and shipping products directly back to you. Sometimes, these fees are charged per hour, by space, or per unit. It all depends on your business model and the 3PL you choose.

The benefits of outsourcing to a 3PL

Remember that plenty of brands still do fulfillment in-house, either because they’re still growing or because it’s too expensive to outsource fulfillment right now. That’s okay! But at a certain point, your business will require outsourcing fulfillment to stay competitive.

Fortunately, we think the benefits are worth the costs:

• Ship faster: Your customers expect 2-day shipping. Do you have the infrastructure to handle that? Your 3PL will allow you to ship from multiple locations to reach more customers faster.
• Reduce overhead costs: It sounds like a contradiction, but hiring someone to handle fulfillment can save you more money. Instead of investing in machines, employees, and infrastructure to handle fulfillment in-house, you can instead use your resources to market and sell more products. This works because fulfillment centers usually cost less for storage and shipping, anyway. Their shipping costs are usually much lower (to the tune of 15 - 25%) than what you would be able to find yourself. These bulk rates make fulfillment centers a no-brainer for eCommerce pros.
• Improve accuracy: Outsourcing to a 3PL means they handle picking, packing, shipping, and returns. This is great if you don’t have the internal bandwidth to fulfill orders yourself. Since a 3PL does this daily, its processes are fast and accurate, leading to fewer fulfillment headaches.

Common Outsourcing Fulfillment Costs

Outsourcing fulfillment benefits your business, but it still comes at a cost.

You need to know how your 3PL prices everything because every provider differs. Although these common fees will give you an idea of what to look out for, your costs will differ based on industry, inventory size, and more.

Fulfillment companies typically charge eight types of fees, but the four major fees are intake or inventory receiving fees, storage fees, fulfillment or pick and pack fees, and shipping fees.

At a high level, you will look at paying the following fees in these four categories.

However, it is essential to understand all the costs associated with using a 3PL provider before making a decision, so let's take an in-depth look at the eight common fulfillment costs.

1. Initial setup fees

Fortunately, you only have to pay a setup fee once. This is a fee to get everything up and running with your supplier, ranging from $100 - $1,000. Generally speaking, the bigger and more complex your business, the higher the initial setup fee will be.

2. Intake fees

Any time the 3PL receives products from your supplier, it takes the fulfillment center time to add them to their system, organize them, etc. That's why you'll pay an intake fee whenever inventory arrives at the warehouse.

Depending on the 3PL, you might pay this fee by:

• Hour ($35–$60 is standard)
• Unit ($0.30–$0.50 per unit)
• Pallets ($10–$25 each)

3. Storage fees

You’ll pay a storage fee to hold all of your inventory before shipping it out to the customer. These storage fees are based on how much space you take up in terms of:

• Pallets ($10–$25 per pallet per month)
• Cubic feet ($0.50–$0.75 per cubic foot per month)
• Bins for smaller items ($1-$10 per bin per month)

4. Fulfillment fees

Fulfillment fees are also known as pick and pack fees. This fee covers the costs associated with fulfillment workers going through the warehouse, picking up the products, and packaging them for the customer.

5. Shipping fees

Fulfillment centers pass on the cost of shipping products to you. But there’s good news: you can take advantage of the 3PL’s shipping volume discounts to save on shipping costs, usually to the tune of 10 - 30% off.

6. Return fees

Sometimes customers will need to return items—it happens! But remember that you’ll have to pay a fee to your fulfillment center to process the return. That’s because the 3PL must re-process or dispose of the inventory.

7. Kitting fees

More complex products might require kitting or combining your products into one set. For example, you might need kitting if you’re putting multiple SKUs together in one package as a product bundle.

8. Account management fees

The last type of fee you might see when outsourcing fulfillment is an account management fee. This is a flat fee you pay every month for someone to manage your account. It includes things like:

• Customer service calls
• Inventory updates
• General activities needed to fulfill your orders

Example: Fulfillment center pricing by product size

To understand how fulfillment costs vary by product type, let’s look at three examples: a small, medium, and large item shipped through a 3PL provider.

This tells us:

• Small, lightweight products scale efficiently.
• Medium products remain profitable with healthy margins.
• Bulky products incur the highest fulfillment costs.

For heavy or oversized products, fulfillment costs can exceed $40 per order once freight and dimensional-weight charges are added.

Four Tips to Save Money on eCommerce Fulfillment

Outsourcing fulfillment saves your business more time and frees you up to focus on more important tasks. But after seeing how much it costs to outsource fulfillment, you might think it’s not worth the effort.

1 - Unlock volume discounts

Fulfillment centers are ideal for dropshippers who have high order volumes. This means that if you play your cards right, you can access bulk discounts that will make fulfillment worthwhile.

2 - Negotiate better contract terms

Want better savings on your fulfillment costs? Negotiate them! Always try to negotiate your fulfillment contract.

3 - Avoid hidden costs

Don’t pay more than you need to. Be on the lookout for these hidden fulfillment costs:

• Integration costs: You need systems that talk to your 3PL.
• Expedited shipping: If you offer 2-day shipping to customers, your 3PL might charge extra for this service.
• International orders: Are there “gotcha” fees for international shipping?

4 - Do the math

The last way to save money on outsourcing fulfillment is to do the math. This will help you find the best fulfillment service and understand the financial benefits of outsourcing.

Fulfillment Cost FAQs

How much do fulfillment services cost per order?

Pick-and-pack fulfillment typically runs $0.75–$3.50 per item or $2–$5 per order, on top of shipping.

What fees do fulfillment centers charge?

Expect up to eight fee categories: initial setup, intake, storage, pick-and-pack, shipping, returns, kitting, and account management.

How can I reduce fulfillment costs?

Unlock volume discounts as you grow, negotiate contract terms, watch for hidden fees, and do the per-order math before committing.

The Bottom Line

Customers are shopping online more than ever. But most of them are ignorant of the work it takes to put a product in their hands! As a dropshipper, you’re part of an intricate system that gets products from point A all the way to point Z. Know what to expect from your 3PL if you choose to outsource fulfillment.