Vertical Financials
Costs & Inventory

Fulfillment Cost per Order

Definition

The total cost to get one order out the door to a customer: pick and pack, packaging, outbound shipping and related warehouse fees.

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Formula

Fulfillment Cost per Order = Total Fulfillment Costs ÷ Orders Shipped

This number connects operations to profit. On a $45 order, the difference between $8 and $11 of fulfillment is a big share of contribution margin.

Tracking it monthly shows the effect of carrier rate changes, packaging and order mix. Watch for: free shipping thresholds set without knowing this number, which can give away margin on every order.

Example

$38,000 of 3PL, packaging and shipping costs across 4,000 orders is $9.50 per order.

Related terms

3PL (Third-Party Logistics)Contribution MarginAOV (Average Order Value)Dimensional Weight

Terms that reference this

3PL (Third-Party Logistics)Dimensional WeightMulti-Channel Fulfillment (MCF)Zone Skipping
← PreviousFreight-InNext →GAAP (Generally Accepted Accounting Principles)

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