eCommerce fulfillment services range from simple storage to end-to-end fulfillment and everything in between.
If you’re considering outsourcing any part of your fulfillment operation, it’s crucial to understand the options available to your online business, including what to look for and how much to pay.
This ultimate list of eCommerce fulfillment services covers the different fulfillment options and upgrades available to your business, covering what each service entails, average prices for US sellers, and how to get started.
What is an eCommerce fulfillment service?
An eCommerce fulfillment service is a third-party offering that enhances your business’ fulfillment operations.
The benefit of using third-party fulfillment services are:
- Time – giving you more time to invest in other business activities.
- Cost – reducing the cost of fulfillment and fast shipping.
- Customer satisfaction – improving metrics such as shipping options, speed, and cost.
7 main eCommerce fulfillment services
Fulfillment companies and 3PLs offer many eCommerce services, the most common being:
Storage is the secure keeping of your products until you sell, remove, or destroy them. Here are some warehousing terms you should know when shopping for your storage space.
- Leased warehouse – warehouse space that you rent to store inventory in and fulfill orders from.
- Temperature controlled warehouse – leased warehouse space maintained at a specific temperature to prolong the life of products such as food.
- Dispersed warehouse network – a network of fulfillment warehouses across the country in which you disperse inventory to enhance shipping speeds and reduce shipping costs.
Tip: A “warehouse” is a space used exclusively to store products. A “fulfillment warehouse” is a warehouse space with additional services, such as picking, packing, and shipping.
Warehouse space is typically charged by combining two fees;
Base rental rate per square foot + estimated operating expenses per square foot
The average base rental rate is $0.85 per square foot, and the average operating expenses (known as NNN or CAM) are $0.25 per square foot – making the average cost of warehouse space in the US $1.10 per square foot per month.
Fulfillment warehouses charge by volume rather than area to calculate storage costs. For example, Amazon FBA standard storage fees start at $0.75 per cubic foot per month between January and September and rise to $2.40 per cubic foot per month between October and December. In contrast, Deliverr’s storage fees start at $0.72 per cubic foot all year-round.
2. Package preparation
Package preparation fulfillment services ensure your products are in a condition ready to ship to customers. These services can cover:
- Quality control – checking product quality to ensure it meets set criteria before shipping.
- Prep-work – preparing products to your marketplace requirements before shipping to another service like an FBA warehouse.
- Reworking – making minor amendments to products or packaging to correct defaults, adhere to local regulations, or create product bundles.
- Spot cleaning – cleaning, steaming, and folding items of clothing before packaging.
Package preparation costs differ depending on the time involved, with the average warehouse worker paid $11.44 per hour. For example, Amazon FBA prep and label work ranges from $0.30 to $1.90 per item.
3. Shipping and handling
Shipping and handling services cover everything involved in delivering orders to customers, including:
- Picking products for orders
- Packaging orders and labeling them ready for shipment
- Arranging collection and shipping
Shipping and handling costs differ depending on the shipping services used; however, they are usually cheaper when arranged through a fulfillment company that has access to bulk shipping and preferential pricing.
For example, shipping a small-size item such as a mobile phone case costs:
- $2.50 with Amazon FBA
- $3.99 with Deliverr
- $5.69 with Amazon multi-channel FBA
Shipping an oversized item such as a computer monitor costs:
- $13.96 with Amazon FBA
- $17.98 with Deliverr
- $17.69 with Amazon multi-channel FBA
However, be mindful of additional costs and fees. For example, Amazon FBA charges long term storage fees for inventory held over 365 days, returns processing fees for handling returned items, and unexpected services fees when items don’t comply with FBA policies. These additional costs can make some fulfillment companies more expensive.
Relevant reading: How to calculate your shipping costs
4. Inventory stock checks
Inventory stock checks involve your fulfillment company or 3PL performing certain tasks relating to your existing stock, for example:
- Taking photographs of products
- Remeasuring dimensions or weight
- Checking product labels and packaging
Fulfillment companies typically charge inventory stock on a SKU basis, plus any fees for required rework. For example, Deliverr charges $28 per SKU per warehouse.
5. Freight forwarding
Freight forwarding is a service that arranges the shipment of goods from point A to point B, usually overseas, and involves multiple transport methods (e.g., rail and air). This includes:
- Planning the best journey
- Contracting carriers
- Ensuring compliance with local laws and regulations
Freight forwarding prices differ depending on the modes of transport used. The average air freight cost from China to the US is between $1.50 – $5.00 per kilogram and the average ocean freight cost from China to the US is around $0.50 per kilogram.
You can learn more about freight forwarding and average costs in our guide to freight forwarding for eCommerce sellers.
6. End-to-end fulfillment
An end-to-end fulfillment service, which is sometimes also known as Fulfillment as a Service, covers your entire fulfillment operation, including:
- Receiving inbound stock
- Storing inventory
- Receiving, picking, and packing orders
- Arranging shipment
- Syncing inventory across sales channels
The cost of Fulfillment as a Service differs depending on the fulfillment company used. Some fulfillment companies charge separate fees for receiving, storing, picking and packing, and shipping.
Other fulfillment service companies, such as Deliverr, charge an all-inclusive cost comprising just two fees: storage and shipping. This makes it easier to calculate your fulfillment costs and project profits.
Tip: use a fulfillment cost calculator to calculate and compare the costs of different fulfillment companies.
7. Fast shipping program qualification
A fast shipping program qualification service ensures your shipping speeds and KPIs meet the requirements for different fast shipping programs, such as:
The cost of fast shipping program qualification is usually absorbed into the fulfillment or shipping fee.
As you can see, there are various third-party fulfillment services all aimed at making your business more efficient, cost-effective, and customer-pleasing.
You don’t have to jump in and use every fulfillment service straight away. You can start small by testing different fulfillment services on different product lines to find the best fulfillment company for your customers and business.