This is usually the very first question I get from e-commerce founders: “So, how much does fulfilment outsourcing actually cost?”. The honest answer is simple. It depends.
That may sound frustrating, but fulfilment outsourcing costs are driven entirely by how your business operates, your order volumes, and the level of service your customers expect. However, there is a bigger issue. Most founders are asking the wrong question. Instead of asking, “How much does fulfilment outsourcing cost?”
You should be asking, “How much is my current fulfilment setup actually costing me?” Because when you run fulfilment in-house, there are many hidden costs quietly draining your time, money, and energy.
The True Cost of In-House Fulfilment
The obvious costs come first. You need to cover warehouse premises, including rent, business rates, utilities, and insurance. Then there are staffing costs. This includes pickers, packers, admin support, and management. These costs remain constant regardless of whether order volumes are high or low. But the costs do not stop there.
You also need contingency resources. Staff holidays, sickness, and peak periods create gaps that must be covered. Most businesses compensate by overstaffing or maintaining excess capacity year-round, which increases operational costs.
One of the most overlooked costs is your own time.
- Time spent managing stock levels.
- Time spent resolving dispatch issues.
- Time spent overseeing warehouse operations instead of growing your business.
This is the time that should be spent sourcing new products, improving marketing, and increasing sales. These activities generate revenue, while warehouse management simply maintains operations.
How Fulfilment Outsourcing Reduces Operational Costs
Fulfilment outsourcing allows you to access economies of scale. Instead of carrying the full cost of warehouse space, staff, and systems on your own, these resources are shared across multiple businesses. You only pay for the space and services you actually use. This flexible model allows your fulfilment costs to scale with your business, rather than limiting growth. Fulfilment outsourcing also reduces management overhead, improves operational efficiency, and frees up valuable time so you can focus on scaling your business.
How Fulfilment Outsourcing Is Priced
Most fulfilment outsourcing providers use a clear and structured pricing model based on four core elements:
- Storage fees – based on the amount of warehouse space your inventory occupies
- Pick fees – the cost of selecting items for each order
- Pack fees – preparing and packaging orders for shipment
- Shipping fees – based on carrier, service level, and delivery destination
This transparent structure allows businesses to understand exactly what they are paying for and how costs scale with order volume.
Fulfilment Outsourcing Is an Investment in Growth
When evaluating fulfilment outsourcing, it is important to look beyond direct cost comparisons.
Consider the full value it provides:
- More time to focus on growth and strategy
- Reduced operational stress and management burden
- Improved efficiency and scalability
- Access to professional fulfilment infrastructure
Fulfilment outsourcing is not simply a cost to minimise. It is a strategic decision that enables sustainable growth.
The real question is not, “Can you afford fulfilment outsourcing?” It is often, “Can you afford to keep doing everything yourself?”
