Let’s cut straight to it: no one likes nasty surprises in the small print. Yet too many ecommerce businesses sign fulfilment contracts without really digging into the detail, only to discover hidden fees months later. And by then, you’re tied in, frustrated, and watching your margins erode.
So before you outsource, you need to ask some tough questions about contracts and costs. Because transparency isn’t just nice — it’s essential.
The True Cost of Fulfilment
On paper, most providers will tell you the basics: storage fees, pick & pack charges, and shipping costs. That’s fine — but it’s rarely the whole story.
Here are some common hidden extras you’ll want to watch for:
• Minimum order volumes. Some providers insist you hit a set number of orders each month — even if you don’t. If you’re growing or seasonal, this can sting.
• Peak surcharges. Extra fees for busy periods like Black Friday or Christmas.
• Storage penalties. If your stock stays longer than expected, you may face long-term storage charges.
• Packaging add-ons. Standard boxes may be included, but branded packaging or inserts could cost extra.
• Account management fees. Some partners charge just to have a dedicated support contact.
None of these are necessarily “bad” — but they need to be clear upfront.
Contract Clauses to Look Out For
- Length of contract. Are you locked in for a year, or can you exit with 30–90 days’ notice? Flexibility matters if your growth path changes.
- Fee escalation. How often do they review prices? Are increases tied to inflation, carrier rates, or just whenever they feel like it?
- Liability for errors. If they mis-pick an order, who pays for the replacement and shipping?
- Shrinkage allowance. Many warehouses include a percentage of “acceptable” stock loss. Check what that number is — you don’t want to fund their mistakes.
- Service level guarantees. If they promise 99% accuracy or next-day dispatch, what happens if they miss it?
The Cost of Not Asking
I’ve seen too many businesses blindsided by hidden fees. One fashion brand I worked with thought they’d found a “cheap” fulfilment provider. But after three months they realised they were paying:
• Peak surcharges in November and December.
• Minimum monthly order charges even in quiet months.
• Extra fees for branded packaging.
Their actual costs were 35% higher than expected — and they were locked into a 12-month contract. It took them a year to get out and move to a more transparent partner.
The Better Way
On the flip side, I’ve also seen providers who build trust by laying everything on the table. They show you the full rate card, explain how and when prices may change, and give you flexibility to grow or scale back. Those are the partners worth keeping.
Questions to Ask Your Provider
- What are your minimum order requirements?
- Do you charge extra during peak season?
- How often do your fees increase, and why?
- Are there costs for branded packaging or inserts?
- What’s your policy on errors, shrinkage, or lost stock?
- How long is the contract, and what’s the exit notice?
Final Thought
Contracts and fees shouldn’t feel like a trap. A transparent partner will make it easy to understand costs, explain where extras apply, and give you confidence that your margins won’t be eaten by surprises.
So before you sign anything, scrutinise the small print. Because in fulfilment, the true partnership is built not on promises — but on trust, transparency, and honesty in the contract.
