Fulfillment Service Charges: What Do They Mean?

8 Sep

So you are ready to contract with a fulfillment company! This is truly a defining moment for your business.  Whether you email, fax, or have orders linked from your shopping cart, fulfillment companies charge for a variety of services.  The following terms and definitions may help you decipher the line items on the price quote:

CC Transaction: This is the charge to have the fulfillment company handle the processing of credit card transactions for you.

Kit Building:  This fee usually involves combining individual items to make sets or kits. 

Order Processing: Usually this is a cost per order that includes the printing of the packing slip and shipping label, picking the first item, plus picking each additional item.  This may also include a minimum fee for low order quantity or file alterations on your orders.

Product Assembly/Assembly: Usually, this is the cost for assembling products to make them ready to sell.  An example would be folding and poly-bagging t-shirts for proper storage. Assembly can include combining multiple products into an individual sku, labeling products, and pre-packaging items. One purpose of assembly is to avoid higher costs when items are shipped out individually at a later date.

Purchasing: This the fee to have shipping or product supplies ordered for you.  Usually includes checking inventory levels periodically and re-ordering as needed.

Receiving: This fee includes checking in product shipments, restocking storage/pick locations and entering data; usually charged per carton or pallet.

Returns: The fee to process items returned by your customers. 

Setup:  This is the initial charge that covers the cost of the preparations needed to handle your products.  These preparations may include the loading of data and  linking the shopping cart into the fulfillment software, phone connections and special storage requirements.

Warehousing:  Cost of storing your product, usually charged by the pallet or cubic foot.  Some companies count this on a weekly basis and then determine the average for the month.

Mediascope offers all of the services listed above, plus many more. Give us a call today at 1-888-644-0844 to discuss how we can help your transition to working with a fulfillment company!

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