Fulfilment Cost Calculator
True order fulfilment cost.
Calculate fulfilment cost per order and monthly total from pick and pack labour, materials, warehouse rent, and returns processing.
What this tool does
This calculator models the total cost to fulfil each order by combining four operational cost streams: pick-and-pack labour, packaging materials, warehouse rent allocated per order, and returns processing. It computes both the cost per individual order and your monthly fulfilment total based on order volume. The result represents the direct operational expense associated with moving inventory from warehouse to customer. Per-order labour costs and order volume are typically the largest cost drivers. The calculator is useful for understanding how fulfilment expenses scale with sales volume, or for comparing cost structures across different operational approaches. The calculation assumes these per-order components remain consistent and does not account for fixed overhead costs unrelated to order count, one-off capital investments, or variable factors like shipping distance or product size variation. Results are for financial modelling and illustration purposes.
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Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Fulfilment cost per order includes pick/pack labour, packaging materials, warehouse rent allocated per order, and returns processing. Typical in-house fulfilment: 3-6 per order. 3PL (third-party logistics): 4-8 per order (upper rate but no warehouse/staff to manage). Amazon FBA: 3-12 depending on product size and weight.
2,000 orders/month × (1.50 pick/pack + 1.80 materials + 0.50 warehouse + 0.20 returns) = 4/order × 2000 = 8,000/month, 96k/year. For 50 AOV this is 8% of revenue - typical. Above 12% signals inefficient fulfilment; below 5% usually indicates under-counting (forgot returns or warehouse allocation).
Fulfilment cost drives break-even for shipping offers. A store offering 'free shipping over 50' with 4 fulfilment cost needs 50 orders to break even just on the shipping offer. Understanding fulfilment cost changes how to structure shipping promotions, bundle offers, and free-shipping thresholds.
A worked example
Try the defaults: orders per month of 2,000, pick/pack labour per order of 1.5, packaging materials per order of 1.8, warehouse rent per order of 0.5. The tool returns 4.00. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.
What moves the number most
The result responds to Orders per Month, Pick/Pack Labour per Order, Packaging Materials per Order, Warehouse Rent per Order, and Returns Processing per Order.
The formula behind this
Per-order cost = labour + materials + warehouse + returns. Monthly = per-order × orders. Annual = monthly × 12. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.
What to do with a low result
A disappointing result is information, not a judgement. Pick the single input that dragged the figure down most and focus the next quarter on that one factor. Breadth-first improvement rarely works; depth-first on the worst input usually does.
What this doesn't capture
The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.
2,000 × (££1.5 + ££1.8 + ££0.5 + ££0.2) = 4.00.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes total fulfilment cost by first determining the per-order cost as the sum of four components: pick and pack labour, packaging materials, warehouse rent allocation, and returns processing. This per-order figure is then multiplied by the number of orders in the selected period—monthly or annual—to arrive at the total fulfilment expense. The model assumes each cost component remains constant per order and applies uniformly across all orders. It does not account for economies of scale, seasonal variation, fixed overhead costs outside the per-order allocation, discounts on bulk materials, or variable labour requirements. Results represent a linear projection based on supplied input values.
References
Frequently Asked Questions
In-house vs 3PL fulfilment?
How to reduce cost per order?
Amazon FBA vs own fulfilment?
What's a good fulfilment %?
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