We break down each cost of the entire outsourced order fulfilment process, and help you choose the right provider for your business
✔ Receiving costs come in at around 10p per item
✔ Storage fees range from 5p for a small letter to £10.88 per pallet/cubic metre, per month
✔ Picking and packing fees start at £1.50 per order, but can reach £4.20 for packages with up to 10 items inside
✔ Huboo is the cheapest ecommerce fulfilment provider. Learn more
Want to begin outsourcing your ecommerce business’ order fulfilment, but struggling to get your head around the costs? We don't blame you.
Order fulfilment costs vary wildly across different third-party logistics (3PL) suppliers (many of whom aren’t transparent about their prices), and the guessing game doesn’t stop there.
What you’ll pay also depends, among other things, on:
- How many orders you’re shipping
- The number of items in each one
- The physical size of your inventory
- The packaging demands of your products
- Where you’re shipping to
It all begs the question… how much does ecommerce fulfilment really cost?
Let’s find out.
Order fulfilment services pricing UK
We’ve broken down the range of factors that influence ecommerce fulfilment pricing in the UK. Read on for the costs of outsourcing each step of the fulfilment process – from setting up your account, all the way to shipping and returns.
- Setup fees
- Receiving fees
- Storage fees
- Picking and packing fees
- Shipping fees
- Kitting and return fees
- Account management fees
- Exit fees
But before you start, bear in mind these are necessarily ballpark estimates of the costs of order fulfilment. To get a more specific idea of exactly what your business can expect to pay, we recommend taking advantage of our free quote-finding tool.
Simply provide us with a few details about your ecommerce business’ requirements (such as how many parcels you’re currently delivering, and via which channels), and we’ll connect you with leading 3PL suppliers in the UK. They’ll be in touch with quotes tailored to your fulfilment needs, completely free of charge.
A 3PL (third-party logistics) provider is a company that provides supply chain solutions. These companies handle your order fulfilment responsibilities for you, allowing you to outsource your ecommerce business’ packaging and postage needs, and free up your time and storage space.
While it’s not a blanket rule, many 3PL providers will charge a setup fee when you begin working together. This cost ranges from anywhere between £100 to more than £800.
What you’ll pay depends on the complexity of your current setup, including your website, shopping cart, and the size of your business and order volume.
Negotiate this one down, if you can.
Whether they’re coming from a supplier or directly from you, when you first ship your products to your 3PL provider’s warehouse (a fulfilment centre, in industry terms), there’s a fair bit of admin involved for the latter. Fulfilment centre staff have to receive the goods, relabel them according to their own system, and potentially repackage them to fit your own requirements, too.
It’s a lot of work… and you can be sure these ‘receiving’ fees are getting passed on to you.
Receiving costs are priced either by the shipment (in which you’re looking at a figure of around £200 per load), or by the unit (a fee of around 5 to 10p per item).
We should note here that, rather than charge individual costs for receiving, picking, and courier costs, some providers roll it all up into a single fee. Huboo does this, with all-inclusive rates available from 92p per small letter.
Storage fees are the bread and butter of order fulfilment costs, and pretty much every 3PL you’ll come across charges them. Essentially, storage fees are what you’ll pay to house your inventory in a third-party fulfilment centre (warehouse).
What’s less certain, though, is exactly how each 3PL supplier charges for the space your stock takes up. Many fulfilment providers charge by the pallet (one cubic metre of space), including:
- Core Fulfilment: £10.88 per pallet, per month
- Minatus: from £2.24 per cubic metre, per week
Charged per cubic metre or pallet, you should budget between £10 and £14 per month in storage. Bear in mind, this price may increase with the more unique products (SKUs, or stock keeping units) that you add to your inventory.
Other 3PL providers argue that charging per pallet isn’t fair – that your ecommerce business should pay only for the actual space your products take up. myWarehouse, for instance, calculates the exact dimensions of your products to help you cut out spend on ‘dead space’ (though, funnily enough, myWarehouse doesn’t tell you exactly what those storage rates are!).
Other fulfilment suppliers charge for storage on a per item basis, such as:
- Huboo: 5p for a small letter to £1 for a medium-sized parcel (per month)
- Amazon FBA: from 39p for clothing, shoes, and bags to 91p for ‘all other categories’ items (per daily average volume in cubic feet, per month)
Some 3PL providers charge by individual ‘bin’. This is ideal for small items, and, due to the ease with which they can be picked, helps keep storage costs down. In this scenario, you can expect to pay between £1 and £3 per each bin, per month.
Picking and packing fees
When someone orders from you online, fulfilment centre staff swing into action. Your product is selected from your inventory (picked) and then boxed up for shipping (packed). Unsurprisingly, all this incurs a fee.
Picking and packing fees typically depend on how many orders you fulfil a month, and the average number of items per order.
With Core Fulfilment, for instance, you’ll pay as little as £1.50 per order in picking and packing fees (if you have one item per order, and a monthly volume of 10,000 packages) or as much as £4.20 (if you have ten items per order, and ship 250 items per month).
myWarehouse charges a flat £2.61 picking and packing fee for orders with one item, with each additional item costing 42p. Huboo’s packing fees begin at 30p for a large letter, and go up to £2.95 for an extra large parcel.
Amazon FBA’s picking and packing rates (lumped together as ‘fulfilment fees’) depend on your item’s sale value, size, and weight. Costs start at £1.35 for items of small envelope size that weigh up to 80g, and go up to £2.17 for a large envelope. Parcels start from £2.15, and reach £5.52 for items that weigh over 10kg.
It’s tough to estimate the costs of shipping, as they depend on so many variables – not only the fees of the carrier itself, but on the size, weight, and nature of the products you’re transporting.
However, we should note that – even when you outsource your order fulfilment – you still have the option to use your own shipping carrier. Though this route offers more transparency and control, 3PL providers typically can offer the cheapest, quickest shipping – Amazon FBA being the most notable example.
The bottom line? Get to grips with where the cheapest, simplest shipping lies, before you sign a deal.
Kitting and return fees
If your product requires some kind of assembly or special attention before it’s shipped, chances are you’ll have to pay ‘kitting’ fees. These are usually based on an hourly rate of between £40 and £60, and will vary depending on the size and time demands of the job.
Likewise, return fees reflect the cost of the labour involved with handling any returns. This includes receiving your returned stock, assessing the damage (if any), and (if possible) getting it ready for resale.
Account management fees
These costs vary drastically between providers (in terms of what they include, and how much they are), but some form of account management fees is inevitable.
Typically, these costs include dedicated customer support, and integration with your website and shopping cart. As most 3PL providers’ operations are built around a live, cloud-based platform, you’ll also need to pay a monthly subscription fee to licence the software.
All up, you can expect to pay between £60 and £240 per month for order fulfilment account management fees.
Certain 3PL providers will charge a fee when you conclude your time with them, or slap you with a bill for early termination.
That’s why it’s crucial to read and negotiate any contract for order fulfilment services with care – and why it’s so important to pick the right provider.
Fulfilment services pricing table
That’s a lot of fulfilment services costs to get your head around. Let’s recap.
|Type of cost||Price range|
|Setup||£100 to £800 (one-off)|
|Receiving||£200 per shipment, or 5 to 10p per item|
|Storage||£10 to £14 per cubic metre, per month|
|Picking and packing||£1.50 to £5 per item|
|Shipping||Dependent on your products and carrier|
|Kitting and return||£40 to £60 per hour|
|Account management||£60 to £240 per month|
As we mentioned earlier, these figures should be treated purely as estimates. You almost certainly won’t pay all of these fulfilment costs – many 3PL providers may not charge setup fees, or will waive the fixed fees associated with account management. Plus, plenty of 3PL suppliers offer other ways to save, by not imposing minimum order requirements or roping you into long contracts.
On top of this, many 3PL companies will lump many of these fees together under one umbrella. You might find everything, from receiving to return, simply referred to as ‘fulfilment fees’, or pay a simple monthly subscription fee for the whole hog.
That is, of course, if you choose the right provider…
Choosing the right order fulfilment supplier
While this page isn’t about comparing order fulfilment suppliers (we do that in much greater detail in this guide for small businesses), we can recommend to you the cheapest 3PL provider we’ve found. It’s Huboo.
Unlike many other fulfilment providers, Huboo offers rates that combine receiving, picking, packing, and shipping costs, for ultimate simplicity. There’s plenty of flexibility, too – you’ll have the option to choose between 24-hour and 48-hour delivery, and benefit from subscription rates starting from £10 per month.
Add this to Huboo’s offer of two months’ worth of free storage when you sign up, and there are few better deals out there.
Now that you have a better idea of how much it costs to outsource your ecommerce fulfilment, it’s time to start comparing quotes from providers. How?
Well, simply provide us with a few details about your business’ requirements. We’ll ask:
- How long you’ve been trading for
- How you currently deliver your products
- Where you sell your products
- How many items you deliver daily
We’ll also need your postcode, so we can put you in touch with the top 3PL providers servicing your area. They’ll then be in contact with you directly, to offer no-obligation quotes tailored to your business’ situation. It takes around 30 seconds to fill in your requirements, and is completely free for UK businesses.