If you’re Googling the kind of things that led you to this article, you’re probably realizing that your business has grown beyond the point where you can handle pick and pack fulfillment and shipping operations in-house.
First, appreciate what an amazing milestone that is! It’s a sign that your company is gaining a loyal following and that the products you provide have found their footing with your target markets.
Next, take a deep breath. There are A LOT of considerations to go through when choosing your pick and pack company. A great one will take your business to the next level. A poor choice can significantly set back your progress. This article will take you through the things you need to consider as you’re interviewing pick and pack partners.
If you’d like more personalized recommendations, please reach out! Our experts have been matching businesses with pick and pack warehouses since 2005 and are attuned to the unique needs of growing companies and startups alike. We’ve helped businesses find the best partners at crucial points in their companies’ growth, allowing them to expand into new markets and focus internal efforts on making and marketing their products. Our matching services are unbiased, objective and always free to companies.
If this is your first foray into outsourcing pick and pack operations, your initial questions probably center on pricing and whether you can keep margins healthy while bringing on additional help.
While prices are going to vary significantly depending on regional and product-specific factors, these rough pricing benchmarks from our latest survey can help you get started in your considerations.
| Service | Service Definition | Service Costs |
|---|---|---|
| Set Up Fees | Charges for onboarding and system integration. | Per Account: $425 (Range: $0 to thousands) |
| Receiving Fees | Fees for processing and handling inbound inventory. | Per Hour / Per Container: $45.67/hour (Range: $425-$500) |
| Storage & Warehouse Fees | Costs for storing goods in the warehouse. | Per Pallet: $20.17 per pallet (Alternate methods: $0.4625/cubic ft, $3.08 per bin) |
| Amazon Fees | Fees for labeling, preparing, and storing products to meet Amazon's FBA requirements. | Per Unit / Per Label: $0.37 per label (Range: N/A) |
| Fulfillment Fees (Pick and Pack) | Charges for picking items from inventory and packaging them for shipping. Either structured as a per order fee or a per order fee plus a per item fee. | Per Order: $3.25 per single item order (Range: $2.50-$4.79) |
| Inbound Shipping Fees | Cost of sending products from suppliers to the fulfillment center. | Per Shipment: Discounted off carrier rates (Varies by carrier) |
| Outbound Shipping Fees | Cost to send products from the warehouse to customers. | Per Shipment: Markup over cost (Range: 14.60%-16.20% markup; 30-55% discount off rates) |
| Box Fees | Charges for packaging materials used to prepare orders. | Per Box: $1.19 per box (Range: $0.50-$1.50) |
| Order Inserts | Fees for adding promotional inserts or special labeling to orders. | Per Insert / Per Label: $0.17 per insert (Range: $0.05 per label) |
| Return Fees | Costs for handling returned items, including inspection and restocking. | Per Return: $4.06 per return (Range: $3.50 + $0.56 per item) |
| Kitting Fees (I.e. Subscription Boxes) | Fees for assembling multiple products into a single package. | Per Hour / Per Unit: $43.30/hour (Range: $0.25-$0.65 per unit) |
| Account Management Fees | Charges for ongoing account management and customer service support. | Per Month: $102.88 (Range: $30-$500) |
| Call Center Services Fees | Costs for providing inbound customer service via the 3PL's call center. | Per Minute: $1.29 per minute (Range: N/A) |
Beyond pricing, your business will need to ensure the pick and pack partner you select can meet your needs across the following areas:
If you’re still feeling somewhat overwhelmed by the process, we’re here to help. Schedule a call with a member of our highly experienced team or fill out a form and we’ll help match you with your ideal pick and pack service, free of charge. Our analysis is independent, completely unbiased, and rooted in decades of pick and pack know-how.
When you get in touch, we’ll ask a few questions to better understand your business model and your personal priorities. Our decades of experience working with pick and pack warehouses allow us to maintain an up-to-date database of the industry’s leading providers. We’ll assess which is the best fit for you based on pricing, location, packaging, compliance needs, integrations, speed, and dozens of other factors.
Then, we’ll match you with the providers we feel can best meet your needs. You have no obligation to move forward with our recommendation. Whether our matchmaking results in you finding your pick and pack partner or not, you pay nothing. Pick and pack companies pay us a one-time fee of less than $50 to get the chance to quote your project.
Pick and pack services are a step in the fulfillment process where items are selected from inventory (picking) and combined and packaged securely in cartons (packing) for shipment to customers. It is commonly used in B2C e-commerce and order fulfillment operations but may also be used in some B2B applications. Pick and pack is also referred to as fulfillment.
The pick and pack process involves receiving and storing products at a warehousing facility, where inventory is tracked and managed for accuracy. Items are then picked from storage locations based on orders, often using barcoding and electronic tickets to streamline efficiency. The selected items are packed according to client instructions, ensuring secure and accurate packaging. Finally, the packed orders are shipped to customers, with the facility coordinating distribution to minimize costs. The process also includes providing order confirmations, inventory control updates, and ensuring timely delivery.
Warehouses usually choose between four common pick and pack methods. Piece picking is the simplest method, where items are picked one by one for each order, ideal for small orders but time-consuming for large ones. Zone picking divides the warehouse into zones, assigning pickers to specific areas to reduce travel time and improve efficiency, making it suitable for larger warehouses. Batch picking allows pickers to collect items for multiple orders in a single pass, ideal for small or low-demand items, minimizing travel time in high-volume warehouses. Wave picking combines zone and batch methods, grouping orders into timed waves to optimize efficiency for diverse orders and varying deadlines.
Professional pick and pack companies reduce pick times by optimizing warehouse layouts, strategically placing popular items near packing stations to minimize travel time. They use advanced inventory management systems and picking technologies (such as barcode scanning, pick-to-light systems, and voice-directed picking) to provide real-time visibility, ensuring accurate and efficient item retrieval. Efficient storage solutions, such as organized bins and clear labeling, further streamline the process. Additionally, they train and cross-train their pickers to follow best practices and adapt to changing order volumes, maximizing efficiency and flexibility.
Outsourcing to a professional pick and pack warehouse offers numerous benefits, starting with improved accuracy and reduced shipping errors. These facilities leverage advanced technology and experienced teams to ensure orders are processed, picked, and packed with precision, minimizing damaged shipments and increasing customer satisfaction. Many also provide 24/7 access to online management systems for real-time monitoring, approvals, and adjustments, giving you greater control over your fulfillment operations.
Pick and pack warehouses also help lower costs by eliminating the need for expensive in-house storage, staffing, and transportation. They utilize their established networks and industry expertise to negotiate better freight rates and streamline the supply chain, making it easier for you to compete with larger companies. Additionally, they are highly scalable, allowing you to adjust space and labor needs based on inventory demand, whether during seasonal peaks or periods of growth.
Another key advantage is efficiency. By handling all aspects of the fulfillment process, including billing, audits, and operations, these warehouses allow your team to focus on core business priorities. Their flexibility also supports businesses with varying needs, from accommodating seasonal fluctuations to offering customized services like branded packaging or personalized inserts to enhance the customer experience. Ultimately, outsourcing with a pick and pack provider saves time, reduces stress, and enables your business to grow more efficiently.
Pick and pack companies typically charge customers for receiving, storage, fulfillment (or pick and pack fees), and shipping. Specifically, pick and pack fees are usually charged on a per order basis OR a per order plus a per item basis. The average pick and pack fee from our latest survey was $2.50 per order and $.68 per item.
The “top” pick and pack provider for your business depends entirely on your unique needs, such as product type, order volume, service requirements, and location. Different providers excel in specific industries, technologies, and scales of operation. While companies like ShipBob, ShipMonk, ShipHero, ShipHype, and others frequently appear on “top lists,” this doesn’t guarantee they are the best fit, or even suitable, for your business. Selecting the right pick and pack fulfillment company requires a careful assessment of your priorities and a detailed comparison of how each provider aligns with your specific goals.
The top US location for pick and pack services are Los Angeles, New York/New Jersey, Texas, Chicago, and Miami. These locations are population centers within the US, making them ideal for distribution to customers within the local markets.
The most popular pick and pack locations in Canada are Toronto (representing the largest population base in Canada), Vancouver (a strategic port of entry from China), and Montreal (another strong population base).
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