In this solo YouTube explainer, Sam Anderson, founder of Order Fulfilment Experts, walks viewers through the full cost structure of e‑commerce fulfilment services. He begins with receiving fees, explaining per‑unit versus hourly charging and discloses his own rate of £37.80 per hour (63p per minute), applied pro‑rata. He describes the two software tools his warehouse uses – Mintsoft for order management and automatic cost generation, and GetHarvest for granular time‑tracking of every staff activity. The video then covers storage fees, noting a standard £60 per rack per month and the rationale for choosing high‑ceiling bulk storage versus small‑item B2C racks. Picking and packing fees are discussed, with a warning against unrealistically low rates and an emphasis on skilled staff who also handle customer communication. Product assembly/kitting is presented as a time‑based service, with pre‑agreed pricing derived from video‑recorded time‑and‑motion studies. Sam explains postage and courier pricing, the complexity of postal matrices, volume‑based discounts, and the modest margin fulfilment houses earn on shipping. He highlights that technology platform integrations (Shopify, WooCommerce, etc.) are offered free by his firm, contrasting with competitors who charge per plugin. Finally, he introduces a recent minimum‑spend policy of £250 per rack per month, which bundles storage, handling, and shipping costs, and advises brands to demand full transparency to avoid hidden fees. The video ends with an invitation for questions.
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Pricing. It can be quite a minefield in the order fulfilment space. Hi, my name's Sam Anderson and I'm the founder of Order Fulfilment Experts, and today I'd like to go through how fulfilment houses price their service to you, and more specifically, how Order Fulfilment Experts charges for its service, so that you'll be able to finish this video with a very clear understanding of what's involved and why. So the first thing that happens is goods come into the warehouse. So the first thing that gets charged for is receiving fees. Some fulfillment houses will have a per carton or a per pallet or a, you know, per unit cost for that. Others will do it on an hourly rate. It depends on the type of product and how easy it is to create a per unit cost, and that depends entirely on whether you can reasonably guess how long this will take. So basically, with everything that is charged out, you're paying for the fulfillment house's time and facilities. So to be perfectly honest, I mean, having looked into this before producing this video, there are some fulfillment houses that will charge as much as £60 an hour for certain tasks. We certainly don't do that. And there are some that start around £30 an hour mark. For us, we are at £37.80 an hour or 63 pence a minute. So we don't do it like actual solicitors whereby they'll go, oh, you're a minute over that hour, we'll charge you for the whole hour. It's done very much pro rata. And we use two systems in this warehouse. We have Mintsoft, which is our order management software, and within that we can put the pre-agreed per task price within the system, and that will then automatically generate the cost. And it's totally, uh, transparent. You can see every single transaction in there. You can see what the postage cost based on the option of the post. You can see the packaging costs based on what you've asked for in terms of how it should be packaged. And the picking and packing cost as well. So coming back to what I was saying in terms of how the stock flows throughout the warehouse, first of all it comes in, it's receipted, so there's a charge for the time it takes to do that. And as I say, that's either per unit or for the amount of time taken. And the second system we use other than Mintsoft is something called GetHarvest, where every single person on the team records the time they're spending on every task throughout the day, including their lunch breaks actually. And it's become a habit for us all, including me. And what was interesting, a little segue here, is that when I started doing it, it really shone a light on how much time I'm just spending on like general communication in terms of operations instead of sales, marketing, content, HR, looking after my team, And so that can be very useful if you're looking to try and really focus your mind on best use of your time. Anyway, I'll come back to what I was explaining. So once the goods come in, obviously you then— they need to be put on a shelf or a rack or a pallet, so if they're not already on one. So they— there are storage fees associated with the cost of your goods. So in a previous video, I talked about how if you're looking at long-term bulk storage, it's much, much better to go for a very large, high-ceilinged storage facility for that. And for your B2C or direct-to-consumer fulfillment for e-commerce brands, you're much better obviously choosing a fulfillment house that can break things down into their eaches and deal with very small eaches. So the racking you can see behind me, this is just a very, very small rack we're using for next the packing benches there, but they're normally double the size of that, and our racks can get between 1.5 to 2 pallets worth of stock on them at any given time. So, and we charge those out at £60 per month per rack. Now that is pretty standard, there's nothing, you know, it's not the cheapest, it's not the most expensive, it's a pretty standard reasonable rate to that you could expect to pay. And then after that, you've got the picking and packing fees. And I would just say, out of the gate for this, I would say be a little suspicious if it's really, really low. And you could say, well, that's very disingenuous of you, Sam, because of course you'd say that. But I mean, I have had fulfillment houses— I've had customers who've come from fulfillment houses who have gone under because they simply weren't charging enough and there just wasn't enough meat on the bone for them. So that's why we very much have a sort of a per-minute charge. We know how much we're charging our time for, and it's really the same price as a really good quality UK-based VA. And all the team here are not your standard, if I'm allowed to say that, picker-packers. These guys actually manage a portfolio of customers. They work as a buddy team. They're in direct contact with the customers via WhatsApp or Google Meet or email and good old-fashioned telephone. So these are much more sort of high-level people that we get to work in the warehouse who are able to manage all the customer communication side of things as much as the actual nitty-gritty of the picking and the packing and the product assembly. So talking of which, product assembly is becoming a much larger part of what we do, in fact. So kitting and product assembly, it's pretty much the same sort of thing. And again, you'll pay for the time it takes to do it. Now obviously you can get to a pre-agreed price, and the way you do that is we just do a time and motion study, and we will even video it and send it to prospective customers or customers who are already on board with us and want us to sort of then start doing some kitting so they can see for themselves exactly how long things are taking. And then there's no gray area about what it should— how long it should have taken and what it should cost and all that sort of thing, because it's okay, that particular thing, you know, took a minute, therefore that's 63p per one to do that. And I would encourage obviously you to try and get those agreements with fulfillment houses so that as far as you possibly can, you do have a per-task price pre-agreed for everything. Now where we differ is the sorts of customers we tend to attract are those that want a much more personable service, but also one that's more bespoke. And that is primarily why we then also use GetHarvest and record our time, because we may be asked to go and up the road to Screwfix and buy some specialist pliers to fix some ski jackets. We may also be asked to do tissue paper ruching for products before they go into point of sale at Selfridges. We may also get asked to handwrite gift cards. So clearly Mintsoft, however good it is, cannot actually sort of manage that in its system, which is why we also have Harvest in conjunction with Mintsoft. But Emily, our business administrator, and who she does all the invoicing, she will upload all of those entries from Harvest into Mintsoft. So it's all in one place and our customers can see everything. So we then are looking at postage and courier fees. Now, postage and courier fees, again, it can be a little bit of a minefield because that if— I don't know if you've ever seen a postal matrix, but it is rather overwhelming. So the UK ones, obviously you've got the different formats and weights. And therefore a different price, all the various different services as well for each of those weights and formats. And then if you're going internationally, you're then looking at— well, it just depends on not just which country it's going to and the volumetric weight, but also where in that country as to what the cost will be. And also fuel surcharges can actually fluctuate, not just, you know, month by month, but also week by week, or even we've known it to go from day by day. I'm going to probably cover in more detail in a standalone video because it is quite an involved topic. But what I will say at this stage is that most fulfillment houses, just like us, we have a standard postage price, uh, price list that we send out to customers when they say, could, could you quote for us? Now obviously what does happen is we have some customers who use a particular service, so they might have a particular weight bracket and destination and format that they're sending to much, much more. And in this industry, volume is everything. And so, for example, we've got a customer who's looking to onboard, and they're sending out parcels that are 600 grams on Royal Mail tracked 48-hour service. Now, uh, they're hoping to get a really high volume going. So what I can then do is go to Royal Mail on their behalf, and I say, look, we're going to be pushing through X volume in addition on that particular service. What is the next discounted rate on that volume we can send through to you? And obviously you then pass that back to the customer. Now, fulfillment houses do make a small percentage on postage and couriers as well. It's their bread and butter, you know. This, for a fulfillment house, it's a very low margin, high volume business. So the devil is in the detail. So, but we do also have customers who say, look, we'd prefer to use our own postal system— our own postal account, sorry— and we plug Mintsoft into that. And then what we do is we just charge the nominal percentage fee that we would have otherwise got, because that's a fulfillment house's bread and butter, is the picking and packing and obviously the sending and distribution of goods. So from after that, really the main things that you need to consider are going to be technology platforms and minimum spend. So technology platforms, for us, we actually— they're completely free of charge. We offer them to our customers completely free of charge. So if you're selling off of WooCommerce or Shopify or any of those other platforms, we can plug into those completely free of charge. There are some that Mintsoft actually pass a premium cost premium connections that they ask for an additional cost, or bespoke ones that need to be built, obviously. But other than that, obviously, we connect via an API key and then we leave it overnight, come back to it, make sure that the data is working all well and talking to each other in between. Many fulfillment houses will charge for that, and they'll charge for however many plugins you have. So if you're selling off of other platforms, they'll charge for that too. It's not something that we've wanted to do. And then minimum spend. So there are some fulfillment houses that charge a large sort of minimum of like £500 a month, even £1,000 a month minimum, depending on the size of the fulfillment house and the sorts of contracts that they attract. We never did this until recently, mainly because we got quite a few customers using us as a bit like glorified storage. And as a fulfillment house, if the stock isn't moving we're not earning anything from it. And so we actually then implemented a minimum fee of £250 per rack per month. And that £250, so within that is obviously the cost of the storage, there's also the picking, the packing, the packaging, the postage, the couriers, the goods in. There's everything is in there. So, and we actually only have one customer who falls under that, and there's one that chooses to pay us £250 a month because they just love the service and what have you, and they just have one rack. So, and that's fine and everyone's happy. So yes, just bear in mind that, you know, you'd be wary of every single cost. And, uh, you know, a good decent fulfillment house should be very transparent about it, not have any hidden costs. Be wary, obviously it's very difficult to, but do ask if there are any costs that haven't been sort of fully laid out on the table in case there's any uncertainty on that. Because yeah, it's, it's not, it's not a happy conversation obviously if you get a bill that you're not expecting. And I know that from our perspective when we're dealing with other suppliers as well. So I hope that's really helpful. There are a lot of other areas that I'm going to discuss over time time, but I think that really gives a good insight already as to how fulfillment houses charge. And I really just hope that it's useful. And if you have any questions, please don't hesitate to reach out at all, and I'll be happy to go through things in more detail. Okay, many thanks. Bye for now.
