How much does ecommerce fulfillment cost?

What do you actually pay for in e-commerce fulfillment?

Fulfillment costs come down to five areas — whether you handle it yourself or outsource.

1. Warehousing

Your products need somewhere to live. The cost depends mainly on how many SKUs you have, how big your products are, and how many units of each you hold. In other words, how much space your products take up.

If you run your own warehouse, you typically pay a fixed monthly fee regardless of whether it’s full or half-empty. On top of that, you’re covering heating, electricity, insurance, and equipment every single day. Your own warehouse is usually a fixed cost, no matter how much or how little you’re selling.

If you outsource, you pay based on the storage spaces you use. Pricing is typically based on product size, the shelf or pallet spaces used, and how long each product is stored. Crucially, costs scale across all three dimensions; you only pay for the space and time you actually use.

2. Receiving incoming stock

When a shipment arrives from your supplier, it needs to be received, checked, logged, and shelved. In your own warehouse, that’s your time or your staff’s time. In an outsourced model, receiving is either part of the overall service or priced based on incoming volume.

3. Order picking and packing

Here’s where the real work happens, getting your products out into the world. Picking and packing customer orders is the most labour-intensive part of e-commerce fulfillment.

If you outsource, pricing is typically based on the number of orders and the number of lines per order i.e. how many different SKUs are in each order. Pricing is often tied to volume: the more orders, the lower the per-order cost.

And don’t forget packaging materials. You’re paying for those either way — whether you handle it yourself or outsource. Some partners include packaging in their pricing; others charge separately for each box used.

When thinking about the value of picking and packing for your business, it’s worth noting that this stage has a big impact on customer experience. During peak seasons and campaigns, a spike in demand can cause delays when you’re relying on your own resources, but with an outsourced fulfillment partner, capacity flexes with your volume.

4. Shipping and freight

Freight costs depend on parcel size, weight, destination, and delivery method. Domestic and international shipping are priced differently. Whether a parcel goes to a service point, a customer’s home, or a parcel locker also affects the price. B2B shipments are always priced separately.

Online merchants can also benefit from competitively tendered carrier contracts that large fulfillment operators typically have in place as freight can end up significantly cheaper than negotiating your own rates.

5. Add-on services

Running an online store also means handling claims, processing returns, repackaging products, adding labels, assembling gift sets or kits, and much more. These services aren’t usually part of base pricing, but many fulfillment partners can handle them just as well as you would yourself.

And there’s more — what else costs money in e-commerce fulfillment?

So far this has probably all sounded fairly straightforward. But many online merchants are surprised when they start digging into fulfillment pricing models.

Because many providers also charge fixed fees.

• Setup fee. When you move your fulfillment to a partner, a one-off fee is sometimes charged for the work involved in getting things up and running — often based on your number of SKUs.
• Integration setup and maintenance. To get your order and fulfillment chain running smoothly, your e-commerce platform and marketplaces need to be integrated with the partner’s warehouse management system. This typically comes with a one-off charge.
• Admin or management fee. A monthly admin fee for the partnership is a common part of the pricing.
• Ongoing system or licence fees. You pay a monthly share of the systems the partner uses to manage your warehouse.
• Minimum charge. Some providers use a minimum charge to ensure their costs are covered when order volumes are low.
• Other surcharges — for example on oversized or particularly heavy products or shipments.
• Automatic annual price increases written into the contract can quietly push your costs up without you noticing.

Plugo is priced differently — no fixed fulfillment costs

With Plugo, you don’t pay for things you don’t use. No licence fees, no admin fees, no integration charges, no setup costs. No fixed fees, no minimum charges buried in the contract, no invoices for integrations or project kick-offs.

With Plugo, you pay only for the core service — and the cost is directly tied to your store’s volume.

You pay for warehousing, shipments, and deliveries. Every line on your invoice is transparent and based directly on transactions.

We also believe pricing should be available to everyone upfront. Don’t wait days or weeks for a quote — use our calculator to work out the cost for your store right now.

Should you outsource or handle fulfillment yourself?

There’s no single right answer. The starting point for a meaningful comparison is knowing your own costs.

If you currently handle fulfillment yourself, start by working out the true cost — honestly and from every angle: space, electricity, insurance, heating, packaging materials. And of course your time. Maybe put a price on the stress and the rushed moments too.

If you’ve already outsourced, pull up your costs from the past year and look at the total. Think about how the price would change if your volume goes up or down.

Then get pricing from a few partners for your specific store. Make sure to ask what setup and ongoing fees they charge, so there are no nasty surprises down the line.