Blog Posts Study Shows How Fulfillment Costs are Changing

Key Takeaways

  • Recent industry research shows that many companies are experiencing an increase in order fulfillment costs.
  • Labor was the primary factor overall. However, cost concerns vary by company size.
  • For those whose costs decreased, the use of material handling equipment/automation/robotics was a factor.

How have your order fulfillment costs changed in the past year? What were the contributing factors? In a recent industry survey, Saddle Creek posed these questions to professionals directly involved in or having influence over ecommerce fulfillment. The results can be found in our 2022 Ecommerce Fulfillment Trends Report.

Following is an excerpt…

Assessing the Ecommerce Experience: Fulfillment Costs

With increasing or fluctuating order volume and heightened customer expectations, it’s no wonder that many respondents incurred more costs.

In the past year, 51% say their fulfillment costs increased somewhat or substantially. (Interestingly, this is down just slightly from Saddle Creek’s pre-pandemic 2020 study when 53% of respondents reported increasing costs.) For 29% of respondents, costs actually decreased in the past year.

For respondents whose costs increased, labor was the primary factor, followed by customer service requirements and the competitive landscape.

Shipping costs ranked fourth this year. This is somewhat surprising since they were the top factor for increased fulfillment costs (closely followed by labor) in Saddle Creek’s 2020 study.

This year’s data shows that cost concerns varied by company size. Small companies were more likely to feel the impact of shipping costs while labor was a bigger concern for large and mid-size companies. This may help to explain why larger companies were much more likely to note the impact of costs associated with adding or upgrading MHE, automation and robotics.

Overall, the majority of respondents whose costs decreased said that greater use of material handling equipment/automation/robotics (53%) was a factor. In addition, 37% say they required less labor in the past year, perhaps due to decreased order volume, and/or improved processes (38%) to help reduce costs.

For more data about ecommerce fulfillment, read the full report.

Related to: Automation & Robotics, Controlling Costs, Labor Management, Parcel Shipping, Selling Online