Pick-and-pack cost analysis

We build the cost of picking, packing and dispatching an order from its parts: labour minutes, packaging materials, storage space, system fees and the handling that special orders add. The model runs on your actual order mix, so single-line parcels, multi-line orders, gifts and bulky items each carry their own cost.

The board gets a cost per order by channel and product, and a view of what each order contributes after fulfilment.

• An activity-based cost model of pick, pack and dispatch, built on time standards and material prices.
• A cost per order table by order size, product group and channel.
• A packaging review comparing carton and mailer options against damage and carrier charges.
• A contribution view of each channel after fulfilment cost.
• Recommended changes to thresholds, fees and provider rates, each with its effect on margin.

• Cost per order is stated by order size band, so a single item in a mailer and a full carton each carry their own figure.
• Packaging spend is tied to the orders that drive it, and the board sees it as a share of order value.
• Damage rate is compared across packaging types, so a cheaper carton is judged on what it loses.
• Contribution per order after fulfilment is stated by channel, so a channel's margin carries what it costs to ship.
• The share of orders priced below their cost to fulfil is on the page, and your thresholds and fees are set against it.

Fulfilment cost is usually one number, an average. Orders vary widely: one item in a mailer against twelve in a carton with inserts. An average hides which products and channels lose money after pick and pack, and it sets prices and thresholds wrongly.

• Your free-shipping threshold was set by a competitor's, and not by your costs.
• The provider charges a flat fee per order and your basket mix has changed.
• Gift wrap, inserts and special packaging are given away or billed inconsistently.
• Packaging spend has risen and nobody can say which orders drive it.
• Margin by channel is calculated before fulfilment cost, so it looks better than it is.

Finance directors and chief executives of e-commerce brands and retailers who set delivery fees, free-shipping thresholds or provider rates without knowing what an order costs to prepare, and boards comparing in-house with outsourced fulfilment.

Qasim Abbas set the capital logic for a last-mile fleet of about 1,000 vehicles at BaladiMart, part of Al Baladi Group, and the same test applies inside a warehouse. We state what each order costs, what it earns and who set the threshold.

We use order exports from whichever platform and warehouse systems the group runs, with cost data from the ledger, including Xero, QuickBooks and NetSuite. The model is a workbook checked line by line against your invoices. See how fees work.

Does this work if a provider does the packing?

Yes. We rebuild the cost from the provider's rates and your order mix, and compare it with what the invoice says you pay.

Can the model be updated later?

Yes. The model is handed over with the assumptions listed, so your team updates it when rates or mix change.

Share a month of orders and your latest fulfilment invoice. We show what a cost-per-order build reveals for your channels at a private briefing with the Managing Partner.