E-Commerce Apr 08, 2022

E-commerce Fulfillment Cost: Fulfillment Pricing Explained

Kseniia Hrechyshkyna

Kseniia Hrechyshkyna



Oksana Shesternina

Oksana Shesternina

Business Analyst


E-commerce Fulfillment Cost: Fulfillment Pricing Explained

Time to read: 10 minutes


  1. What Is E-Commerce Fulfillment Cost?
  2. Why Outsource E-Commerce Fulfillment?
  3. What Factors Impact Your E-Commerce Fulfillment Cost?
  4. How Does 3PL Affect Your E-Commerce Fulfillment Cost?
  5. How Should You Calculate Your Fulfillment Cost Per Order?
  6. Why Choose Magento to Streamline Your Order Fulfillment?
  7. Conclusion

A carefully designed order fulfillment process is crucial to the market power and profitability of e-commerce businesses as well as their ability to engage and retain customers. Every order is a cause for celebration, but the order is not complete until the client receives it in his or her hands safe and sound.

Order fulfillment, which is also known as supply chain fulfillment, refers to the steps that a business takes from the moment a customer inquires about a product to the time that it is actually shipped to the customer.

Fulfillment cost

Each step of this process results in expenses that add up to the total order fulfillment cost. In this article, we explain the main elements of the order fulfillment cost and answer several questions. What influences the fulfillment cost? What is order fulfillment via 3PL? How do you calculate your fulfillment cost?

What Is E-Commerce Fulfillment Cost?

E-commerce fulfillment cost represents the total amount of expenses involved in the process of handling products from receiving inventory to distributing it. Generally, the order fulfillment process involves seven steps, but these steps may vary depending on which order fulfillment model is used and whether it is managed in-house, outsourced, or involves dropshipping.

Let’s take a closer look at the basic steps of the order fulfillment process:

  1. Receiving inventory

  2. Storage

  3. Order picking

  4. Order packing

  5. Shipping

  6. Delivery

  7. Return

Basic steps of the order fulfillment process

Order Fulfillment Models

The order fulfillment model you choose for your business ultimately determines the order fulfillment cost. There are four order fulfillment models:

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Why Outsource E-Commerce Fulfillment?

Outsourcing your order fulfillment to 3PL companies may seem expensive in the beginning, but if you use the right approach, then you will reap the rewards in the long-term. There are several reasons you should choose 3PL for your business.

What Factors Impact Your E-Commerce Fulfillment Cost?

Regardless of whether you decide to delegate your order fulfillment to a third party or handle it yourself, several factors affect the total fulfillment cost per order or item. Closely examining e-commerce fulfillment fees helps you understand how different variables, such as packaging or the volume of returns, impact the organization’s total fulfillment cost. You will incur several fees throughout the order fulfillment process.

How Does 3PL Affect Your E-Commerce Fulfillment Cost?

Now that we’ve discussed the essentials, let’s move on to the e-commerce fulfillment cost of using 3PL. As we have explained, 3PL stands for third-party logistics, and it is an integral part of many e-commerce operations because 3PL allows business owners to accomplish their essential tasks and grow their businesses.

Learn more about using 3PL in e-commerce by watching this video:

While researching 3PL, you may also discover 4PL (fourth-party logistics) providers. These companies serve as mediators between retailers and 3PL companies and offer end-to-end order fulfillment management for e-commerce merchants.

Let’s take a look at what 3PL companies offer beyond your e-commerce supply chain arrangement.

3PL order fulfillment pricing models

The table below provides an overview of the pricing models that most 3PL companies typically use for order fulfillment.


Many 3PL companies may charge extra fees for add-on services. For example, some 3PL companies may charge an additional fee if the period of the warehouse storage exceeds the time period established in the initial agreement with the merchant.

How Should You Calculate Your Fulfillment Cost Per Order?

Understanding how much you spend on your order fulfillment is crucial because this information helps you maintain a cost-efficient process. The picture below illustrates the data points you need to calculate your monthly cost per order:

How to calculate?

Thus, to calculate your single order fulfillment costs per month, you should first calculate your total storage fee, total pick/pack fee, and total receiving fee. Add these three costs together to determine your total monthly fee. Once you have calculated the total monthly cost for your order fulfillment, divide this number by your total number of monthly orders to determine your fulfillment cost per order.

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Why Choose Magento to Streamline Your Order Fulfillment?

Understanding your order fulfillment price is essential, and it involves simple mathematics, but with e-commerce, you should not manually calculate this information or manage your order fulfillment.

Magento is a modern e-commerce platform that allows you to put most of your business operations, including order fulfillment, on autopilot. Even the most complicated supply schemes with multiple sources can be completely automated by synchronizing all relevant data in real time.

Let’s take a quick look at the basic fulfillment process of Magento 2 default.



A well-functioning e-commerce supply chain provides the foundation for successful business performance, but merchants must control their business expenditures and not lose sight of any wasted money.

This article explained the key concepts of e-commerce fulfillment cost. To implement these concepts in your business, you should consider using an experienced e-commerce development team, like Dinarys. Contact us with your project details. As Magento Solution Partners, we will gladly help you put together your core business activities, so you can see the entire financial picture and reduce expenses. We guarantee appropriate security for your data and timely delivery of our work.

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