fulfillment center pricing - how to calculate fulfillment cost per order

Fulfillment Center Pricing

At OSW, operational efficiency is at the core of everything we do. With over three decades of experience in fulfillment services, we've honed our processes to ensure seamless operations and consistent customer experiences. Our expertise in hiring and training the right personnel, coupled with robust systems and protocols, guarantees accuracy and reliability in every order.

use our pricing spreadsheet to help you
calculate the exact costs of your fulfillment

Transparency is a cornerstone of our approach to business. We believe in providing clear and upfront pricing to our clients, ensuring they understand exactly what they’re paying for and why. Our commitment to transparency extends to every aspect of our services, from fulfillment to customer care, fostering trust and accountability in our partnerships. By offering transparent pricing, we empower our clients to make informed decisions and build long-lasting relationships based on honesty and integrity.

How to Calculate Costs of Outsourcing Fulfillment

While there isn’t a one-size-fits-all formula for determining the exact pricing for outsourced fulfillment, here’s a general framework you can use to calculate costs:

total fulfillment cost

Pricing structures will vary among fulfillment providers, so it’s essential to carefully review and understand the terms of the service agreement to estimate costs accurately. The following spreadsheet, available as a free download, is a great resource to ensure you know exactly what you’re paying for and why. Once you’ve downloaded this resource, our sales team will happily provide our pricing structures (upon request). 

focus on what you do best

Cost savings

Outsourcing fulfillment can often result in significant cost savings compared to maintaining in-house operations, especially for smaller businesses or those experiencing rapid growth.


Fulfillment partners can offer scalable solutions that adjust to fluctuations in demand, allowing companies to easily handle seasonal peaks or sudden spikes in orders without additional infrastructure or resources.


Fulfillment providers bring specialized expertise and experience to the table, ensuring efficient and accurate order processing, inventory management, and shipping logistics.

Access to technology and resources

Outsourcing fulfillment grants access to advanced technologies, software platforms, and infrastructure that may otherwise be cost-prohibitive for companies to invest in.

Geographic reach

Fulfillment partners often have multiple warehouses or distribution centers strategically located to reach customers quickly and cost-effectively, enabling companies to expand their market reach without significant overhead.


By entrusting fulfillment tasks to a dedicated partner, companies can save valuable time and resources that can be reinvested into other business areas, such as marketing, product development, or customer service.


Outsourcing fulfillment can help mitigate risks associated with order errors, shipping delays, inventory management, and compliance issues, as these responsibilities are transferred to the expertise of the fulfillment provider.

Outsourcing fulfillment services not only ensures operational efficiency but also helps brands save significantly on shipping costs. As businesses scale, managing in-house fulfillment operations becomes increasingly complex and costly. By partnering with us, brands can streamline their processes and allocate resources more effectively, ultimately reducing overhead expenses.

Sudden spikes in demand can pose significant challenges for brands. What would happen if you woke up to hundreds or even thousands of orders overnight?

Our scalable infrastructure and expertise provide a safety net against such scenarios. By outsourcing fulfillment to us, brands can protect themselves from unexpected order surges, ensuring continuity and reliability in their operations.

Common Challenges of Order Fulfillment Pricing

inventory management

One of the primary challenges in order fulfillment is managing inventory effectively. Balancing supply and demand is crucial; otherwise, you risk losing customers to competitors due to product unavailability. Implementing a robust inventory management system, often facilitated by cloud-based solutions offered by many 3PLs, can help you maintain optimal stock levels and avoid stockouts.


Overstocking or understocking can also pose significant challenges. Conducting thorough market research to gauge demand levels is essential for maintaining the right inventory levels. In cases of low demand, strategic marketing campaigns can help stimulate interest and drive sales.

Shipping Efficiency

A slow shipping process can deter customers from purchasing your products. Hiring reliable order fulfillment services can significantly enhance efficiency. These companies often have systems in place to process orders promptly, with some even offering same-day processing if orders are received by a specific cut-off time. Additionally, their relationships with shipping carriers enable them to leverage discounts and shipping options, ensuring timely delivery to customers. With proper planning and execution, order fulfillment companies ensure that customers receive their orders promptly and enhance overall satisfaction.

FAQ: What are the different options available for order fulfillment of your products?

Exploring the different choices available to brands to fulfill their products involves deliberation to guarantee the best balance between cost-effectiveness and productivity for your business. Whether you’re evaluating the advantages and disadvantages of self-preparation or investigating the perks of delegating tasks to an outsourced fulfillment company, each alternative presents its factors and expenses to consider. 

Let’s dig into the specifics of each strategy to assist you in making an informed choice that matches your business objectives and financial plan.

fulfilling by amazon (FBA)

  • Consider monthly shipping costs and profit margins.
  • Eligibility requires meeting a minimum threshold of 40 items per month.
  • Assess whether Amazon’s fees align with your business’s economic viability, potentially bringing small margins to zero.
  • Lift-gate fees may apply for suppliers shipping on pallets, especially if your rented warehouse lacks dock access. 

DIY fulfillment

  • Factor in costs such as rent, employees, supplies, technology, and management time.
  • Renting warehouse space can be costly, starting at a bare minimum of $750 per month, depending on location.
  • Additional expenses may include lift-gate fees for pallet shipments and employee salaries, averaging $2500 or more per month, including benefits.
  • Total monthly expenses for DIY fulfillment can exceed $3000.

Outsourcing fulfillment

  • Pay only for the space you use, usually lower than renting your own space.
  • Avoid lift-gate fees and enjoy discounts for longer-term commitments.
  • No need to hire employees, resulting in faster processing times.
  • Outsourcing your fulfillment is significantly less expensive than other options for most companies.
  • Typical fees charged by prep centers include labeling fees, prep fees, stickering fees, box, bubble wrap, and pallet fees, as well as inspection fees.

Ready to explore fulfillment center pricing?
Download our pricing spreadsheet calculate to estimate costs

Download Our Fulfillment Cost Calculator


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