The Real Cost of Fulfillment for Ecommerce Brands: Storage, Pick & Pack, Shipping, and Returns Explained

TLDR

Ecommerce fulfillment costs in the UK change based on storage, pick and pack, packaging, shipping zones, and returns. The real savings come from looking at these costs together and choosing a provider that gives the most cost-effective mix for your business.

Key takeaways

• Typical UK fulfilment pick & pack (before shipping) often runs around £1 to £3 per order, though this can vary based on item size, order complexity and volume.
• Pallet storage in many UK 3PLs can be as low as ~£4–£6 per pallet per week; costs increase depending on SKU type, storage method, occupancy and seasonality, but £20 per pallet/week is more likely an outlier than a norm.
• Fulfilment cost comprises several components such as storage, picking & packing, packaging, shipping and returns, and ignoring one can lead to unexpected expense spikes.
• Using a transparent 3PL with clear line-item pricing helps avoid hidden fees such as long-term storage, pallet-in/pallet-out, or return inspection/processing charges.
• Because shipping and logistics are volatile (fuel, carrier surcharges, destination zones), brands should evaluate entire fulfilment costs together, not just per-order fees, before deciding on a provider or pricing model.

Average UK fulfilment cost breakdown

Understanding ecommerce fulfilment costs is important for any brand deciding if it is cheaper to handle orders in-house or work with a third party logistics provider. Many businesses also want clear insight into how these fees are calculated, what causes price changes, and which UK fulfilment partners offer straightforward pricing without surprises. 

This guide should break down each cost component in simple terms and help you compare providers, assess fees for small and mid sized business, depending on your needs, and find the best value for high volume ecommerce sellers.

Explore cost effective ecommerce fulfilment services with Bezos.ai.

How ecommerce fulfilment costs are calculated

Ecommerce fulfilment costs come from several areas that work together to create the final price per order. 

Receiving, storage, pick and pack, packaging materials, shipping and returns all shape the total. 

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When asking “What is the average cost of order fulfilment?”, it helps to look at how each part adds up. Storage rates, packaging fees and handling charges create the base cost, while shipping usually pushes the overall price above five pounds for most UK brands. 

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Most brands see totals above five pounds once shipping is included because carrier fees usually make up the largest share of the spend.

Many businesses also want clarity on what are the hidden costs in ecommerce fulfilment, because small add ons can make two quotes look very different. Hidden charges often come from SKU overage fees, seasonal storage surcharges, special handling requirements or Q4 peak season uplifts. These costs are easy to miss but can influence margins when order volumes grow.

Compare fulfilment quotes with Bezos.ai and find a clearer breakdown of real costs.

A Simple Breakdown of Receiving Fees and Storage Fees

Receiving fees are usually charged per pallet or per hour, depending on how the fulfilment centre handles inbound stock. Storage is billed weekly, and the amount changes based on how much space your inventory takes up. 

Many brands want to know how fulfilment centres calculate these charges and why storage fees rise during certain seasons. 

The answer comes down to stock levels, turnover speed and pallet density. Higher volumes take up more space, slow moving SKUs stay on racks longer, and loose or uneven pallets reduce capacity, which pushes storage costs upward.

How can I reduce my ecommerce fulfilment expenses?

Yes, we all like to cut corners, but reducing fulfilment costs is more than that. Usually, smart ecommerce brands use several proven strategies to lower costs while keeping service quality high.

Use SKU rationalisation to trim overhead

One effective move is to apply SKU rationalization, meaning you review every product (or SKU) in your catalog and cut out low-performing or rarely sold items. 

That way you only keep stock that sells well and delivers profit.

• By eliminating underperforming SKUs you reduce the number of items sitting idle in the warehouse. That lowers storage costs, reduces dead stock risk, and decreases labour and handling costs tied to managing that inventory.
• A leaner product assortment also simplifies operations. It becomes easier to forecast demand, organise picking and packing, and avoid inventory mismatches. 

Improve demand forecasting and inventory turnover

A second pillar is better forecasting and faster inventory turn rates.

• If you use demand forecasting, which should ideally be based on sales history, seasonality, and market trends, you can stock more accurate amounts. This reduces overstocking and prevents paying for storage for stock that moves slowly. 
• Faster turnover means products don’t stay long in the warehouse waiting to be sold. That reduces per-unit storage and holding costs.
• Better forecasting also helps you avoid emergency restocks or rush shipping, both of which are expensive.

Optimise warehouse operations

Warehouse layout, stock placement, and efficient picking/packing processes have a big impact.

• Store high-demand SKUs in locations close to dispatch areas. That reduces picking time and labour cost per order.
• Use slotting optimization. Usually, that means rearrange inventory placement based on turnover rate. That way products move smoothly through the warehouse.
• Introduce more efficient packing: match packaging size to the order, avoid overpacking, use lighter or simpler materials when safe. This lowers packaging cost and can reduce shipping fees. 

Negotiate smarter shipping and choose shipping strategies wisely

Shipping costs often form a large portion of fulfilment expenses. So optimising shipping can save a lot.

• If possible, negotiate rates with carriers or use regional carriers to minimise last-mile and zone-based surcharges.
• For standard orders, offer slower delivery options. Faster delivery usually costs more. Some orders don’t require express shipping, and giving customers a choice helps balance cost vs. speed.
• If you sell across multiple markets (for example, across EU countries or multiple regions in the UK), placing inventory strategically in different fulfilment centres can reduce shipping distances and lower carrier costs. 

Consider outsourcing or working with the right fulfilment partner

Sometimes outsourcing to a third-party logistics provider (3PL) or carefully choosing your fulfilment partner saves more than handling everything in-house.

• A good fulfilment partner often brings scale, better negotiated carrier rates, and efficient warehouse operations, all the things that are hard for small or mid-sized sellers to replicate.
• Outsourcing can shift fixed costs (warehouse rent, staff, equipment) into variable costs, which means you pay mostly for what you actually use. That offers flexibility, especially for seasonal businesses. 

Pick, pack, and packaging

Pick and pack fees vary widely across fulfilment centres, and the differences matter for small and mid sized ecommerce businesses. Most UK providers charge a base rate for the first item in an order and a smaller fee for each additional unit. This means multi item orders become more expensive because every extra product adds time, handling steps and packaging materials.

Fragile products also raise the cost. They often need bubble wrap, void fill or double boxing, which increases both labour and packaging expense. Custom packaging can lift fees even further because it takes more time to assemble, adds complexity to the packing process, and may require special storage space inside the warehouse.

Small brands tend to feel these costs more because they do fewer orders and cannot benefit from high volume discounts. Mid sized brands usually secure better rates, but their costs still climb quickly if they sell bundles, ship breakable items or use branded packaging with manual assembly. The key is understanding how each of these choices affects the fee per order so you can plan margins accurately.

Which ecommerce fulfilment providers offer the best value for money?

Many brands ask this because pricing varies a lot between UK 3PLs. A key difference is how each provider structures pick and pack fees. Some 3PLs charge separately for every material, which can make the true cost per order higher than it first appears. Others bundle standard packaging into their base rate. This often includes a mailer, a shipping label and basic protective materials, which creates a clearer and more predictable cost.

Bundled pricing can offer better value for small to mid sized ecommerce brands because it reduces the number of surprise charges. It also helps with forecasting since your per order cost stays stable even if packaging prices rise. Businesses that ship simple products or low risk SKUs tend to benefit most from these bundled models. Brands with complex packaging needs may still pay extra, but the uplift is usually easier to understand when the base materials are already covered.

Ultimately, the best value usually comes from a provider that offers transparent fees, includes essential materials in the pick and pack rate and avoids long lists of small add on charges that inflate the monthly invoice.

Learn more about packaging optimization with Bezos.ai.

Shipping costs and UK courier zones

Shipping is usually the biggest expense for UK ecommerce brands. This is why many people ask “How do shipping zones affect fulfilment pricing?” and “Is it cheaper to fulfil in-house or outsource?” To answer these questions, it helps to look at typical courier rates and how they scale with weight and destination.

Common UK courier costs:

Prices rise when parcels move through multiple zones. Zone based surcharges increase costs if orders travel long distances or cross regional boundaries. Fuel fees also change often and can add a noticeable uplift to each label. Peak season spikes put even more pressure on budgets because carriers raise rates during busy months to manage demand.

These factors shape the answer to “Are third-party fulfilment services cost-effective?” Many 3PLs access bulk shipping rates that small businesses cannot secure on their own. Lower carrier fees can offset the cost of outsourcing, especially for brands with steady order volume or heavy products that are expensive to ship at retail rates.

Discover how to reduce shipping costs with Bezos.ai.

Returns processing and hidden costs

Return processing often carries extra costs that are easy to miss, which is why many brands want a clearer view of the hidden fees linked to ecommerce fulfilment.

What are the hidden costs in ecommerce fulfilment?

Returns management is often overlooked. But it can carry quite a few hidden costs that add up quickly. Typical returns handling by UK fulfilment providers includes inspection, repackaging, restocking or disposal. According to a recent overview of UK 3PL cost models, returns handling often ranges from £0.50 to £2.00 per returned item. 

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Beyond that base cost, extra charges can appear if items require refurbishment, repackaging, grading or condition checks. Brands that sell fragile, seasonal or high-value items may see higher fees, especially when returns arrive in poor condition or need special handling.

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Because many returns come back in imperfect condition, some stock may be unsellable or require discounting. This loss in value or the cost of repackaging represents another hidden expense, one that is easy to miss when budgeting fulfilment costs.

What is the best ecommerce fulfilment service for small businesses?

For small brands or micro-businesses, the best fulfilment service is one that offers flexible and lightweight return workflows. That means:

• A provider that handles returns individually, without requiring large batch volumes or minimum thresholds.
• A returns process designed for lightweight SKUs or small parcels, which minimizes return-handling costs.
• Transparent and predictable pricing for returns inspection and restocking, so you don’t get hit with surprise fees.
• Low or no minimum order volumes, so you’re not forced to pay for services you don’t use.

Third-party fulfilment partners often win here. Because they serve many clients, they can spread fixed costs over volume. This makes returns logistics more viable for small sellers than trying to manage reverse-logistics in-house. 

Using a 3PL with good returns management can make returns more manageable and less risky. It also helps conserve capital since you can avoid investing in staff, warehouse space or complicated workflows that only make sense at scale.

How to calculate your total fulfilment cost

Have you ever been at a loss, wondering “How do I calculate total fulfilment costs and choose the most affordable solution?” How are ecommerce fulfilment costs calculated, anyway? Well, first and foremost, you need a concise formula. 

Formula

Total fulfilment cost per order = (Receiving + Storage + Pick and Pack + Packaging + Shipping + Returns) ÷ Monthly Orders

For example, let’s say that your expenses come like this:

• Storage: £400
• Pick and pack: £1.20
• Shipping: £3.80
• Returns: £0.40

Total cost per order at 1,000 monthly orders = £5.40.

Use the fulfilment cost calculator from Bezos.ai to estimate your real return handling costs.

How to reduce total fulfilment expenses

Many brands want a clear answer to “How can I reduce my ecommerce fulfilment expenses?” because costs rise quickly as order volumes grow. Several practical strategies can make a noticeable difference without harming delivery speed or customer experience. 

• Packaging standardisation is one of the easiest wins. Using a smaller set of box sizes reduces material costs, speeds up packing, and helps lower courier rates by avoiding oversized parcels.
• Courier renegotiation is another strong lever. Brands that review their carrier contracts yearly often unlock better terms, especially when they show consistent volume. 
• SKU optimization also helps. Removing slow movers and consolidating variants lowers storage costs and reduces the number of pallets held in the warehouse.
• Choosing 3PLs with regional warehouses can cut shipping costs because parcels travel shorter distances. 
• Predictive inventory tools reduce overstock fees by helping you avoid holding excess stock during slow periods. These tools adjust purchasing based on real demand, which keeps storage bills under control.

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This connects with the common question “Are third-party fulfilment services cost-effective?” Outsourcing becomes more economical once a brand reaches the range of three hundred to five hundred monthly orders. 

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At that point, the savings from bulk courier rates, automated processes and reduced labour often outweigh the cost of running fulfilment in-house.

Comparing top UK fulfilment companies

You probably want to know what are the leading fulfilment companies for ecommerce that offer competitive pricing and transparent fees.  Let’s take a look at the table explaining typical pricing models and which types of brands they suit (small, mid-sized, high-volume).

Which types of providers suit different business sizes

Small shops benefit from low minimums and simple fee structures. Mid sized brands often prefer providers with deeper integrations and reliable warehouse capacity. High volume sellers gain the most from fulfilment partners that bundle services, offer strong automation and secure lower courier rates through scale.

Best value for high volume ecommerce sellers

Brands that ship significant volume often look for a service that bundles pick and pack, packaging and shipping into a predictable cost. This lowers the cost per order as volume rises. Bezos.ai, J&J Global Fulfilment and FulfilmentCrowd perform well in this area because they combine automation with efficient warehouse networks and bulk courier discounts.

Get fulfilment quotes through Bezos.ai and compare costs across top UK providers.

Conclusión

Ecommerce fulfilment costs in the UK shift based on many factors. Product weight, courier zones, return rates and warehouse efficiency all play a part in the final price per order. These costs are not fixed, which is why brands that understand each driver can plan more accurately and avoid surprises. Comparing providers transparently also helps identify which partner offers the most affordable and scalable fulfilment setup for long term growth.

Contact Bezos.ai team today to get a quote. 

PREGUNTAS FRECUENTES 

What is the average cost of fulfilment per order?
Typically between £1 and £3 before shipping, depending on SKU complexity.

Are third-party fulfilment services cost-effective?
Yes, once a brand reaches around 300 to 500 monthly orders.

How do I calculate my total fulfilment cost?
Add receiving, storage, pick and pack, packaging, shipping and returns, then divide by monthly orders.

What drives fulfilment prices the most?
Shipping distance, parcel weight, and packaging requirements.

Is in-house fulfilment cheaper?
Only for very small volumes or businesses with niche handling needs.