There are many great fulfillment centers. Shipbob seems perfect to a business owner who is shopping 3PLs for the first time. They’ve got energetic sales reps, a flashy website, and their rates seem almost too good to be true. I mean free pick & pack? That’s awesome!
However, it is important to know all their fees before you make a decision. Shipbob's pricing and service fees may be hard to understand until you've included their shipping fees which make up the majority of their fee structure.
Want to understand where your costs are coming from?
Fulfillment Costs: Shipbob
Usually these are fixed charges for the time spent to integrate your stores with a 3PL’s software. These fees can hurt a small business that doesn’t need expenses before they ever ship a package.
Shipbob: Varies up to $1,000
Also known as maintenance fees, account fees are ongoing fees for the cost of keeping your account active and maintained on the 3PL’s software. You will not see many 3PLs charging for this, although many will roll it up into customer service fees.
Receiving fees involve verifying inventory counts and conditions as well as properly processing and storing the goods. Receiving fees are crucial to a smooth operation. Faulty receiving can result in miscounts, shrinkage (lost inventory), and damaged goods which means higher costs and bad reviews. Hourly rates are concerning because you never know exactly how much you are going to pay. You need a 3PL you can trust with your product.
Shipbob: $25 for the first 2 hours. $35/man/hr after that.
Storage fees matter - especially if you have slow-moving inventory. Some 3PLs will charge you long-term storage rates if they aren’t out quickly. A good 3PL won’t. These rates are monthly charges and are usually averaged throughout the month. It’s important to note that SKUs must be separated so each SKU will have a main storage location and a smaller pick bin storage location.
Shipbob: $40/pallet (60 cubic ft), $10/shelf (7.1 cubic ft), $5/bin (.77 cubic ft)
Pick & Pack Fees
This is Shipbob's unique selling point. Free pick & pack sounds amazing. What’s important to consider, is that the costs you are saving in pick & pack fees are rolled up elsewhere. In Shipbob’s case, this shows up in their shipping costs which you can find after you sign up for an account.
Shipbob: $0 for the first 5 picks. $0.20 per additional unit after that.
You have two options with packaging fees for 3PLs. They are either wrapped into other fees, or they are charged separately.
Shipbob: $0 for standard packaging which includes limited box sizes. This may result in larger, more expensive packaging than you need.
Remember that free pick & pack from before? You were probably wondering how they could offer that. You will need to sign up for a free account to see Shipbob's shipping fees. These shipping fees combine all the costs you would normally have with pick & pack and packaging into one number.
Shipbob: Shipping fees included in final fulfillment cost.
Customer Service Fees
When you’re using a fulfillment center, there are a lot of little things that may come up. You’ll be on the phone with your 3PL partner a lot, especially in the beginning. If you have an emergency, you don’t want to wait hours for a response. Larger 3PLs do have advantages with many locations and the best software. On the flip side, small-medium size 3PLs tend to have better customer service which can save you a lot of hours spent on the phone or email.
Returns are an important part of many company's policies. Returns to a 3PL involve the procession
Shipbob: $3 per order
If you want to add marketing material such as a promo slip in to your package, expect a charge from most 3PLs as it adds another step that is different from general fulfillment.
Shipbob: Considered a unit, free for up to 5 units, $0.20 per unit after
Anytime you have product(s) that need to be assembled before being sent, this is referred to as kitting. This is common with subscription box fulfillment and many online sellers who combine items for package deals. Since kitting can vary, you'll likely need to get a custom quote from your 3PL. Shipbob prices every step of the process individually so you can calculate your full cost per order pretty easily.
Shipbob: $5.00 for training and work station setup + kitting fees
Picking Fee: $0.07 per SKU
Construct my box/packaging: $0.56
Close my box/packaging: $0.04
Place item in box/packaging: $0.10
Pack item in ShipBob packaging: $0.15
Affix a pre-provided sticker/label/barcode: $0.21
Affix a ShipBob printed sticker: $0.26
Exact positioning requested for sticker/label/barcode: $0.07
Remove item from package: $0.21
Remove packaging or an insert: $0.28
Add my dunnage to the kit: $0.11
Add ShipBob paper dunnage: $0.11
Construct my box/divider insert: $0.28
Wrap my item: $0.28
Seal an item shut with tape/sticker: $0.08
Perform inspection of an item: $0.21
Change Item SKU to kit SKU: $0.02
Summary of Shipbob
Shipbob has grown exceptionally fast behind a lot of investment. They have become one of the biggest names in the 3PL industry. Everyone has different needs when it comes to 3PLs so as always, do your due diligence and consider at least 3-5 3PLs before making a decision. You will want to look into their full pricing and fine print, as well as their contract details as many fees or disclaimers can be found there.