What Are the Costs Associated With Picking and Pack?Posted by Marcher Kondrup on June 13th, 2021 Order processing is the chore or work-flow related to the packing, picking and delivery of your ordered goods to your customer and is a critical component of order fulfillment . Order processing facilities or operations are also commonly known as " Distribution centres" or "DFC's". These facilities often have hundreds or even thousands of employees spread across multiple locations. They work together as a team to make sure your orders are picked, packed and delivered in record time. However, if you're looking for efficient, cost effective and highly customised packaging and pick and pack options, then you'll be better off working with a third party company. A Pick and Pack provider will take all the stress and hard work out of sourcing your products from the manufacturers/suppliers/ores, and then delivering them to your customer. You'll simply tell them what your requirements are and they'll organise the logistics of getting your goods to your customers/producers/ores and then on to your clients/producers. The one big thing you'll need to make sure you do is that you hire a pick and pack provider that fits within your production footprint, because if they're too big, your shipping costs can be crippling. Ask for quotes from multiple providers and don't rule out warehouses based in the UK if you can help it. Most companies will already have a full compliment of full time warehouse staff for picking and packaging, so the only real extra they'll need is some additional fulfillment staff (also called "pickers"). Some companies only stock a few items, usually per product group. Other companies may have thousands of different product groups in their warehouse. If you only want a small number of items picked and packed per day, then warehouse staff isn't going to be necessary. If you want thousands of different products being picked and packed every day, then you'll need to find another solution. So what's the pick and pack warehouse fees anyway? A premium is generally added to the price of any pick and pack services. This premium is based on the increased cost of storing the inventory, because you don't get to keep the boxes as long and you incur more storage costs. This premium basically pays for the labour costs of picking and packing each item individually. It also includes a percentage of the actual merchandise cost. These fees can vary greatly, so never just simply assume that they apply to you, just to be on the safe side. Packaging supplies are a big part of many business operations, but are typically not the largest expense. So you could cut your storage costs dramatically by outsourcing the pick and pack aspect to an omnichannel fulfillment company. An omnichannel fulfillment company handles all aspects of your orders from manufacturing through to shipping, so all the costs are completely separate. By using an omnichannel fulfillment company you get to eliminate the storage costs and much of the administrative headache associated with pick and pack orders, and you still get the products that you need and want to fulfill orders for. Pick and pack warehouses that outsource the packing or production of products usually charge a fee per pallet. This fee per pallet rate is based on the size of each order, and varies according to the provider. If you're looking for a truly cost-effective solution then it's highly recommended that you find a fulfillment company which offers this as a free option. Remember, in addition to paying the fee per pallet, you must also pay the shipping costs associated with moving your inventory. Fulfillment companies which charge a storage fee only tack on the additional cost of shipping, and never the storage fee. The actual time frame for packing or picking is also different between these two processes. Fulfillment companies which operate in a warehouse environment will have experienced staff which can quickly pack and pick inventory to meet current demand. On the other hand, an omnichannel fulfillment company operates by having their employees perform the entire pick and pack process from beginning to end. This allows them to quickly fulfill orders and pass on the savings associated with using their services. The bottom line is that a pick and pack operation will provide your e-commerce site with greater functionality, but will also require you to spend a significant amount of money. Fulfillment companies which operate on-site will often charge significantly less than warehouses. Not only do they allow you to take advantage of a superior picking and packing process, but they will also save you on storage fees and additional shipping costs. By outsourcing to an on-site fulfillment firm you will effectively eliminate these fees and have the ability to lower your overall cost of ownership.Like it? Share it! More by this author |