Warehousing Services Costs, Pricing, Rates and Fees

The most frequently asked question we receive from customers is “how much does outsourced warehousing cost“? While it is a complicated answer, back in 2017 we started collecting data from our extensive network of warehousing and best fulfillment companies each year in order to help both businesses and warehouses understand average warehousing pricing and costs. This page is the culmination of many years of work, and includes historical survey results from each of our annual warehousing costs and pricing surveys. With data accumulated from both the warehouses in the US and warehouses in Canada.

Average Warehousing Service Costs: For Businesses Using Warehouses

When outsourcing, your business will incur a monthly fee for warehouse space utilized during that month. This fee will take the form of one of the following: a pallet fee, a cubic footage fee, a square footage fee, or a bin fee. Each of these fees are explained in detail on our Warehouse Storage and Pallet Storage page. The main benefit of this warehouse pricing model is that it is variable – you only pay for what you use during the month, as opposed to leasing, purchasing, or building, where you will pay a fixed cost each month whether you use the entire space or not.

Average Warehousing Service Costs: For Warehouse Owners

How Much Do Warehouses Cost?

When considering warehouse options, your business has four primary options: renting an existing warehouse, purchasing an existing warehouse, building a warehouse from scratch, or outsourcing warehousing to a third-party logistics company (3PL). Each option comes with its own cost structure and financial implications.

1. Rent: How Much Does It Cost to Rent a Warehouse

The cost of renting a warehouse space varies dramatically, depending upon the location of the warehouse, the supply or scarcity of warehouse space in the area, the size of the warehouse space, the intended use of the space, and the amenities of the warehouse itself. On average, businesses can expect to pay between $5,000 and $25,000 per year for smaller co-warehousing spaces of less than 3,000 square feet and between $50,000 and $500,000 per year for larger warehouse rental, with urban areas commanding the higher end of the spectrum.

How are Warehouse Costs Calculated for Leases?

Calculating the cost of renting, leasing, or purchasing a warehouse involves three factors: the amount of space, the rate per square foot (monthly or annual), and operating expenses.

In addition to the base rate, operating expenses (utilities, taxes, insurance, etc.) can add $2-$5 per square foot. These typically include:

• Electric: $1-$2 per square foot/year
• Janitorial: $1-$2 per square foot/year
• Water: Variable
• Internet: Dependent on service
• Taxes and Insurance: Area-dependent
• Operating expenses may be paid by you, the landlord, or split, depending on the lease.

Common arrangements include:

• NNN (Triple Net): Tenants pay insurance and taxes.
• CAM (Common Area Maintenance): Shared maintenance costs. A gross lease bundles all fees into the rent.

What Does an Example Warehousing Lease Look Like?

• For a 10,000 square foot warehouse with an annual rate of $7.96 per square foot and $4 per square foot in operating expenses, the total cost would be:
• $7.96 x 10,000 (base cost) + $4 x 10,000 (operating expenses) = $119,600 per year
• To find the monthly cost, divide by 12: $119,600 ÷ 12 = $9,967 per month.

2. Buy: How Much Does It Cost to Buy a Warehouse?

Purchasing a warehouse is a major financial commitment, with prices varying based on factors such as location, building condition, and amenities. Businesses looking to buy can typically expect to pay between $500,000 and $7.5 million, depending on the market. This investment may also require ongoing costs for maintenance, insurance, and taxes. Additional costs depend on the building’s age, layout, and zoning, with modern or specialized warehouses fetching higher prices.

3. Build: How Much Does It Cost to Build a Warehouse

Building a warehouse from scratch offers the most customization but also tends to be the most expensive option. Annualized costs for construction can range from $1 million to $10 million or more, depending on the location, materials used, and the inclusion of advanced features such as automated systems or specialized storage areas. While it does represent a tremendous investment opportunity, it is best suited for a company with cash reserves and/or an ability to secure a long-term loan or note.

4. Outsource: How Much Does it Cost to Outsource Warehousing to a 3PL

Outsourcing your warehousing is the most effective way to lower your warehouse costs. Outsourcing needs to a third-party logistics provider (3PL) is generally the most flexible and affordable option, particularly for businesses that need to scale their warehousing capacity up or down. Annual outsourcing costs usually range from $10,000 to $200,000, depending on the volume of goods stored and the level of service required.

Remember, the main benefit of this warehouse pricing model is that it is variable – you only pay for what you use during the month, as opposed to leasing, purchasing, or building, where you will pay a fixed cost each month whether you use the entire space or not.

Summary Information and Links to Each of insightQuote’s Warehousing Costs and Pricing Surveys

Starting in the most recent year (2024) and working back to the first time that we completed the survey (2017). Each year, we survey all the warehouses in our network, asking key questions about their performance metrics, agreements and terms, warehousing costs, and warehouse pricing for customers.

As you will see, using an outsourced warehouse is by far the most cost-effective way to lower your warehouse costs – Outsourced warehousing offers the most flexible pricing terms for small and large businesses alike. Below are jump links to each of our previous surveys with a year over year analysis for each.

Annual Surveys (2017-2024):

• 2024 Warehousing Services Costs, Pricing, Rates and Fees Results
• 2023 Warehousing Services Costs, Pricing, Rates and Fees Results
• 2022 Warehousing Services Costs, Pricing, Rates and Fees Results
• 2021 Warehousing Services Costs, Pricing, Rates and Fees Results
• 2020 Warehousing Services Costs, Pricing, Rates and Fees Results
• 2018-2019 Warehousing Services Costs, Pricing, Rates and Fees Results
• 2017 Warehousing Services Costs, Pricing, Rates and Fees Results

What The 2024 Survey Results Mean for Warehouse Customers:

• Price Are Lower: If you’re using warehousing services, the average annual price increase is slightly lower in 2024 (4.23%) compared to 2023 (4.54%). This could give you a little more breathing room in terms of budgeting for storage and fulfillment.
• Monthly Spend Requirements Are Up: Expect higher minimum monthly spend requirements, which jumped from $195 in 2023 to $337.50 in 2024. This may affect smaller businesses with lower order volumes.
• Pick and Pack Services Are More Expensive: Both B2C and B2B pick and pack fees have increased, with B2C rates rising from $2.97 in 2023 to $3.18 in 2024, and B2B rates going from $4.31 to $4.79. This could mean higher fulfillment costs for each order you ship out.
• More Discounts Available: There’s good news, too. Warehouses are increasingly offering discounted rates for pick and pack services, with 75.48% of providers offering discounts in 2024, compared to 65% in 2023. Shipping discounts have also improved across ground, express, and LTL services.
• Long-Term Storage Fees Are Less Common: Fewer warehouses are charging long-term storage fees in 2024, down from 58% in 2023 to just 23.33%. This could reduce the cost of holding onto inventory for extended periods.

2024 Warehousing and Fulfillment Costs & Pricing Survey

What The 2024 Survey Results Mean for Warehouse Owners:

• Occupancy Costs Have Risen: A significant portion of your revenue may now go toward occupancy costs, which increased from 24.90% in 2023 to 31.68% in 2024. This could put pressure on profitability, especially for smaller operations.
• Labor Costs Are Lower as a Percentage of Revenue: On the flip side, labor costs as a percentage of revenue have dropped from 31.70% to 28.59%. While the hourly wage for staff has risen slightly ($16.95 in 2024 compared to $15.78 in 2023), you may be able to maintain a more balanced budget due to this decline.
• Profit Margins Are Tightening: Corporate profit margins have slightly decreased, from 10.49% in 2023 to 9.37% in 2024. This suggests that despite rising costs, overall profitability may be harder to maintain, prompting a closer look at cost control strategies.
• Staying Competitive with Discounts: More warehouses are offering discounts on services like pick and pack. Keeping these competitive rates while managing costs will be key to retaining customers and maintaining profitability.

2024 Warehousing and Fulfillment Costs & Pricing Survey

What the 2023 Survey Results Mean for Warehouse Customers:

• Rising Storage Costs: The cost for storage services increased in 2023 compared to 2022. For example, the price per pallet went up from $16.21 to $18.30, and the cost per cubic foot rose from $0.50 to $0.55. This indicates that customers should expect to pay more for storing goods.
• Changes in Discounts: The percentage of warehouses offering discounted pick-and-pack services slightly increased from 64.29% in 2022 to 65% in 2023. Similarly, discounts for storage services saw a larger rise, from 38.71% to 47%, offering more opportunities for cost savings.
• Service Fees Vary: The average setup fee increased slightly from $368 in 2022 to $377 in 2023. Account management fees saw more substantial changes, with fewer companies charging these fees (28% in 2023 versus 51% in 2022), but the average fee increased from $198.93 to $261.80.
• Shipping Discounts Are Declining: There was a notable decrease in shipping discounts for ground, express, international, and LTL services, with rates dropping across all categories. For instance, the ground shipping discount went from 21.82% to 15.58%.

2023 Warehousing and Fulfillment Costs & Pricing Survey

What The 2023 Survey Results Mean for Warehouse Owners:

• Higher Labor and Space Costs: The cost per square foot for warehouse space increased slightly from $7.96 in 2022 to $8.22 in 2023. Additionally, the average hourly wage for warehouse staff rose from $14.97 to $15.78.
• Slight Decline in Occupancy and Labor Costs: The percentage of revenue spent on labor costs decreased from 33.09% in 2022 to 31.70% in 2023. Similarly, occupancy costs as a percentage of revenue also decreased slightly from 25.22% to 24.90%.
• Stable Profit Margins: Corporate profit margins remained consistent, with a slight change from 10.58% in 2022 to 10.49% in 2023.
• Contract Trends: More warehouses are offering flexible agreements, with month-to-month terms increasing from 50% in 2022 to 56% in 2023, while annual agreements also increased from 43.9% to 61%.

2023 Warehousing and Fulfillment Costs & Pricing Survey

What The 2022 Survey Results Mean for Warehouse Customers:

• Increasing Costs for Core Services: Customers are seeing higher costs in several key areas compared to 2021. Storage fees, for instance, have risen notably—pallet storage increased from $14.79 to $16.21, while bin storage costs decreased slightly from $4.07 to $3.18. Expect these changes to impact your overall warehousing budget.
• Fewer Discounts on Services: Warehouses are offering fewer discounts on services like pick and pack, where only 64% offer discounted rates in 2022, down from 72% in 2021. Similarly, the availability of discounted storage dropped from 49% to 38.7%. This means customers may find it harder to negotiate lower prices for fulfillment services.
• Higher Fees Across the Board: Additional fees, like account management and call center charges, have increased. Account management fees rose from an average of $160 to nearly $199 per month, and call center fees jumped from $0.85 per minute to $1.43 per minute. Customers should prepare for a rise in service costs as warehouses adjust their pricing structures.
• Consistent Shipping Rates: Despite rising costs elsewhere, some shipping-related expenses have remained stable. For instance, B2C pick and pack prices stayed consistent at $3.13 per order in both 2021 and 2022, providing some cost predictability in this area.

2022 Warehousing and Fulfillment Costs & Pricing Survey

What The 2022 Survey Results Mean for Warehouse Owners:

• Higher Labor and Space Costs: Owners are dealing with rising operational costs, particularly in labor and space. The hourly rate for warehouse staff increased from $14.00 in 2021 to $14.97 in 2022, while the cost per square foot of warehouse space rose slightly to $7.96 from $7.91. These small but steady increases in overhead will likely impact profit margins.
• Tightening Profit Margins: Reported corporate profit percentages saw a slight decrease, from 11% in 2021 to 10.58% in 2022, suggesting that rising costs are eating into profits. Warehouse owners need to focus on optimizing operational efficiency to offset these shrinking margins.
• More Pricing Flexibility Needed: With 80% of warehouses regularly increasing their prices (up from 61% in 2021), flexibility in pricing strategies is becoming crucial. Owners may need to balance the frequency of price hikes with customer retention efforts, especially given that customer retention dropped slightly from 95.67% to 94.54%.
• Fewer Discounts May Affect Competitiveness: As fewer warehouses are offering discounts, both for pick and pack and storage services, this might affect competitiveness in attracting new customers. Offering alternative value-added services or loyalty programs could help retain customers without relying on constant discounting.

2022 Warehousing and Fulfillment Costs & Pricing Survey

What The 2021 Survey Results Mean for Warehouse Customers:

• Price Increases in Fulfillment Costs: From 2020 to 2021, the cost for B2C pick and pack services rose from $2.96 to $3.13 per order, and the cost for B2B orders remained steady at $4.27. This suggests that customers using fulfillment services can expect a slight increase in their per-order costs, particularly for consumer orders.
• Long-Term Storage Fees Decrease: In 2021, only 49% of warehouses charged long-term storage fees, down from 62% in 2020. This is beneficial for customers storing goods for extended periods, as fewer warehouses are imposing these fees, potentially lowering overall storage costs.
• Increased Account Management Fees: The percentage of warehouses charging account management fees rose from 51% to 60%, with the average fee increasing from $130 to $160.10 per month. Customers should budget for this additional cost when planning warehousing services.
• Shipping Cost Structure Shifts: In 2021, 64% of warehouses used a cost-plus shipping model, up from 45% in 2020. This shift means that customers may see more transparency in shipping costs but also higher charges as the model tends to add a margin on top of shipping costs.

2021 Warehousing and Fulfillment Costs & Pricing Survey

What The 2021 Survey Results Mean for Warehouse Owners:

• Labor and Management Costs Rise: Wages for warehouse staff increased slightly from $13.47 to $14.00 per hour in 2021. Similarly, warehouse management salaries saw a modest rise from $52,765 to $55,854.92. Owners should account for higher payroll expenses in their financial planning.
• Profit Margins Improve: Corporate profit margins increased from 9.77% to 11% in 2021, reflecting a healthier financial outlook for warehouse owners. Despite rising costs, owners are finding ways to increase profitability, possibly by optimizing operations or adjusting pricing strategies.
• Increase in Pricing Flexibility: The percentage of warehouses offering month-to-month agreements decreased from 55% to 46% in 2021. This signals a trend toward longer-term contracts, which may offer more stability for owners but could limit flexibility in adjusting rates or services.
• Setup and Integration Costs Rise: Average setup fees for new customers remained stable, while integration fees for connecting with e-commerce platforms increased significantly from $156 to $447.14. Owners should prepare for higher upfront costs when onboarding new clients or integrating with digital systems.

2021 Warehousing and Fulfillment Costs & Pricing Survey

What The 2020 Survey Results Mean for Warehouse Customers:

• Increased Costs for Storage and Returns: Customers will notice a rise in storage costs, with pallet fees increasing from $13.20 to $14.58 and bin storage rising from $2.85 to $3.30 between 2018-2020. Additionally, return fees have jumped from $3.53 to $4.05 per return. These increases may impact overall fulfillment costs, particularly for businesses handling large volumes of stock or frequent returns.
• Discounts and Setup Fees: Fewer warehouses are offering discounts, with the percentage of those providing discounted pick-and-pack rates dropping from 74.29% to 69%. However, the cost of setting up services has risen sharply, with setup fees increasing from an average of $336 to $520. Customers may need to budget more for onboarding and fewer discount opportunities.
• Stable Shipping Fees but Rising Return Charges: While shipping discounts and methods have remained relatively stable, return fees have increased significantly. This could affect customers managing high return volumes, making it important to re-evaluate return policies and procedures to control costs.
• Price Changes for Shipping Methods: Notable reductions in Ground and Express shipping discounts, coupled with an increase in LTL (Less-than-Truckload) shipping savings (from 51.33% to 57%), suggest that customers may find more favorable rates with LTL services, particularly for bulk or large shipments.

2020 Warehousing and Fulfillment Costs & Pricing Survey

What The 2020 Survey Results Mean for Warehouse Owners:

• Profit Margins Are Growing: Corporate profits have seen a significant rise, moving from 7.25% to 9.77% between 2018-2020. This suggests that despite rising labor and management costs, many warehouses are finding ways to increase profitability, likely through higher service fees and more efficient operations.
• Management Salaries Have Increased: The salary for warehouse management staff has risen from $50,524 to $52,765. Owners may need to consider these increasing payroll expenses in their overall cost structure but could also view it as a sign of investing in quality leadership.
• Stable Labor and Space Costs: Hourly wages for warehouse staff have remained mostly consistent at around $13.47, while the cost per square foot of warehouse space has seen negligible change, increasing from $7.79 to $7.81. This stability helps owners better predict fixed costs, which could help maintain operational predictability amidst other fluctuating expenses.
• Fewer Discounts Offered to Customers: The decline in the number of warehouses offering pick-and-pack discounts (from 74.29% to 69%) indicates that owners are becoming more conservative with pricing incentives, likely in response to increased labor and setup costs.

2020 Warehousing and Fulfillment Costs & Pricing Survey

What The 2018-2019 Survey Results Mean for Warehouse Customers:

• Increased B2C and B2B Fulfillment Costs: The cost for B2C pick and pack services rose from $2.64 in 2017 to $2.86 in 2018-2019, while B2B pick and pack prices jumped from $3.74 to $4.17 in the same period. If you’re using these services, expect slightly higher fulfillment costs, particularly for bulk or business-to-business shipments.
• Rising Setup and Account Management Fees: In 2018-2019, 53% of warehouses charged an average setup fee of $336, and 56% added a $226.54 monthly account management fee. If you’re onboarding new warehousing partners, these fees can impact your overall costs, so factor them in when choosing a provider.
• Reduced Ground Shipping Discounts: Ground shipping discounts offered by warehouses dropped from 24% in 2017 to 20.02% in 2018-2019, which may increase shipping costs for ground deliveries. However, there was a notable increase in Less-Than-Truckload (LTL) shipping discounts from 44% to 51.33%, potentially benefiting those with large, freight-based shipments.
• Returns Fees: If your business deals with returns, be aware that 84.62% of warehouses charged an average return fee of $3.53 per return in 2018-2019. This fee could add up depending on the volume of returns you process.
• Stable Discounts for Pick-and-Pack Services: Around 74% of warehouses consistently offered discounted pick-and-pack rates, unchanged from 2017, which may help offset some of the cost increases elsewhere.

2018-2019 Warehousing and Fulfillment Costs & Pricing Survey

What The 2018-2019 Survey Results Mean for Warehouse Owners:

• Rising Labor and Management Costs: The average hourly wage for warehouse staff increased from $11.44 in 2017 to $13.32 in 2018-2019, while management salaries saw a similar rise from $47,478 to $50,524. Expect higher labor costs as a significant part of your operational expenses.
• Increased Real Estate Costs: The cost per square foot of warehouse space rose from $6.53 in 2017 to $7.79 in 2018-2019, signaling increased occupancy costs for owners. This might put pressure on profit margins, especially in high-demand areas.
• Declining Corporate Profits: Reported corporate profit percentages dropped from 8.83% in 2017 to 7.25% in 2018-2019. This could be a sign of tighter margins due to rising costs for space, staff, and other operational expenses.
• Regular Price Increases: More warehouses reported increasing their pricing regularly, from 53.85% in 2017 to 64.29% in 2018-2019, with an average annual price increase of 4%, up from 2.37% in 2017. Keeping an eye on pricing strategies will be crucial for maintaining profitability.

2018-19 Warehousing and Fulfillment Costs & Pricing Survey

What The 2017 Survey Results Mean for Warehouse Customers:

• Stable Performance and Order Accuracy: With 99.51% order-picking accuracy and a retention rate of 97.82%, customers can expect reliable service from warehouses. This consistency in performance suggests fewer errors and better service overall, which is crucial for customers relying on third-party logistics to fulfill their orders smoothly.
• Cost of Warehousing Services: Warehouses charge $2.64 per order for B2C pick-and-pack services and $3.74 for B2B orders, giving customers clear visibility into the costs of fulfillment. Storage fees average $13.02 per pallet, with some warehouses offering discounted rates on pick-and-pack services (74.36% of warehouses provide discounts). These rates help customers plan and budget their logistics and storage needs more effectively.
• Shipping Discounts: Warehouses typically offer significant discounts on shipping, with 24% off Ground and 31% off Express rates. Customers can leverage these savings, especially for high-volume orders, helping them manage costs for shipping domestically or internationally.
• Month-to-Month Flexibility: Around 56.41% of warehouses offer month-to-month contracts, providing flexibility for customers who prefer not to be locked into long-term agreements. This can be particularly beneficial for businesses that experience seasonal changes or fluctuating demand.

2017 Warehousing and Fulfillment Costs & Pricing Survey

What The 2017 Survey Results Mean for Warehouse Owners:

• Cost Management: The average cost per square foot of warehouse space is $6.53, while warehouse staff are paid an average hourly rate of $11.44. Managing these costs efficiently is crucial for maintaining profitability, as labor and space costs can significantly impact bottom lines.
• Profit Margins: Warehouse owners reported an average corporate profit percentage of 8.83%. To maintain or grow these margins, owners need to optimize their operations, keeping labor costs manageable and negotiating competitive rates for space and services.
• Pricing Increases and Flexibility: 53.85% of warehouses increase pricing regularly, with an average annual increase of 2.37%. Owners need to carefully balance these increases with customer expectations to avoid losing business. Offering flexible contract terms, like month-to-month agreements, can help maintain customer loyalty and reduce churn.
• Service Differentiation Through Discounts: Offering discounts, as done by 74.36% of warehouses for pick-and-pack services, can help warehouse owners attract and retain clients. Additionally, offering competitive shipping rates, with 41.03% of warehouses providing discounts off published shipping rates, can be a strong selling point to win more business.

2017 Warehousing and Fulfillment Costs & Pricing Survey

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