Counting (and Ticking) Every Box: the Math of Fulfillment

If you run a growing D2C or B2B brand, you know the strange moment when your 3PL invoice stops feeling like a simple bill and starts feeling like a warning signal. Everything looked fine when orders were small and manageable. Then your sales jumped, your pallets multiplied, and your fulfillment costs suddenly acted like a science experiment. The math did not change. You just began to see the real equation.

Across the industry, analysts say that nearly 65 percent of mid-market brands underestimate their fulfillment costs by at least 20 percent. They usually track shipping but miss the drag from storage, labor, and returns. It feels like discovering that your house has three basements you did not know you owned. Growth exposes layers you never planned for.

Most brands do not fall behind because they are careless. They fall behind because fulfillment today moves at Amazon speed. Consumers expect same day or next day shipping. Retailers expect perfect compliance. Carriers expect rising surcharges. In a world shaped by impatient buyers and rigid routing guides, fulfillment stops being a background task and becomes its own economic system. You can ignore the math only until the math introduces itself.

Industry Pricing Benchmarks That Shape Your Real Costs

Fulfillment costs fall into predictable buckets across the U.S. market. Public rate cards, trade surveys, and third party studies give us a clear baseline.

Storage is billed monthly by cubic foot or pallet. Industry benchmarks for standard goods usually land between 0.50 and 0.80 per cubic foot. That number rises for temperature control, fragile goods, or HAZMAT. As Kay Hillmann, Director of Vendor Operations, explains, "HAZMAT is expensive to ship, expensive to warehouse, because you need the right certification and the right warehousing."

Pick and pack fees are the line item most founders underestimate. A typical fee runs between 1.50 and 3.00 for the first pick, and 0.20 to 0.60 for each extra pick. If your catalog has many SKUs or your orders have many line items, those extra picks become their own monthly story.

Shipping is the heavyweight. Parcel rates have climbed roughly 5 to 7 percent each year since 2019. Fuel drives part of it. Labor drives part of it. Regional fees drive the rest. This is why rate shopping matters. As Holly Woods, Director of Operations, says, "We're going to find the most cost-effective shipping rate for the service that has been defined for that package."

Returns round out the core equation. In apparel, the industry sees 15 to 30 percent return rates. Consumer electronics often hit 8 to 12 percent. Every return forces new inbound labor, inspection, relabeling, and either restocking or disposal. The average processed return costs 10 to 20 percent of the item price. And that is before you count the customer who wore the sweater once and wants to send it back. As Connor Perkins, Director of Fulfillment, jokes, "We do not want our employees smelling things. You never know where it's coming from."

These are the industry benchmarks. Your actual costs sit inside the next equation: total landed fulfillment cost.

How Total Landed Fulfillment Cost Really Works

If you want to understand fulfillment economics, you build a model for everything. Storage, labor, shipping, and returns form the core. Each interacts with the others.

Storage feels straightforward until demand surges or you buy inventory early for a retail promotion. Extra pallets turn into extra dollars. Delayed inbound shipments turn into missed revenue. Brands that manage storage well look at cubic volume, seasonality, inbound timing, and sell through rates before the invoice shows up.

Pick and pack labor is shaped by warehouse design, workflow, and technology. It is less about workers and more about the system. As Bryan Wright, CTO and COO, says, "A good WMS tracks inventory through the warehouse at every point that you touch it." Precise tracking reduces touches. Fewer touches lower labor costs. A weak system hides work that later appears as fees.

Shipping is a geography problem. It is also a velocity problem. The farther your inventory sits from your buyers, the more you pay. The faster you promise delivery, the harder the cost curve climbs. G10 built a network from Wisconsin to South Carolina to Arizona to Texas to reduce that distance. As Holly explains, "The savings are real."

Returns round out the landed cost model. They require labor, system logic, communication with the brand, and clear rules for what counts as resellable. The more subjective the rules, the harder the labor requirements hit your margins.

Total landed fulfillment cost is not just a number. It is everything your customers never see.

Why Brands Struggle With Fulfillment Economics at Scale

The problem is not that founders do not understand cost. It is that early growth hides the full picture. When you are shipping 200 orders a month, the invoice looks clean. When you are shipping 2,000 orders a month, you begin to see where every extra touch is hiding.

External research shows that about one in three fast-growing D2C brands switches 3PLs within three years. They often outgrow a provider faster than they expected. Many of these brands walk in with energy and walk out with frustration. As Matt Bradbury, Director of Sales, says, "A lot of these brands have had three or four partners in the last eight or nine years."

Retail compliance creates another economic cliff. Large retailers like Walmart, Target, and Amazon demand strict labeling, pallet formatting, ASIN rules, and routing windows. Miss a step, earn a chargeback. As Joel Malmquist, VP of Customer Experience, notes, "Walmart is pretty intense with their labeling rules... massive chargebacks if you do it wrong."

Last comes visibility. Many brands have no real-time window into their inventory, their order flows, or their fulfillment accuracy. They see the results, not the process. As Maureen Milligan, Director of Operations and Projects, explains, "For customers who have come to us from a bad 3PL relationship, they experience relief. They are suddenly seeing their business scaling, that the data supports what we agreed to."

Good visibility does not just solve problems. It prevents them.

How G10 Helps Brands Understand Their Fulfillment Math

G10 takes a different approach. The company began in 2009, built by operators who lived inside the grind, not by investors chasing short-term margins. That difference shows up in the economics.

First, the technology. G10 runs a commercial warehouse management system created by Bryan Wright and used across the industry. It is not homegrown in the risky sense. It is a mature system that the team knows down to the code. As Bryan says, "We can make changes significantly quicker than the competition."

Second, transparency. Clients see their inventory, their order flow, their KPIs, and their history. As Connor notes, "Our clients get best in class visibility and transparency."

Third, geography. With locations across the country, brands can ship faster and cheaper. Holly captures the point simply: "Inbound deliveries come in faster, which means we can get it distributed faster. It is a virtuous circle."

Fourth, culture. G10 is not a quarterly-driven giant. It is a founder-built, Midwest-rooted company that thinks long term. As John Pistone says, "We want long-term value... you cannot do that with short-term thinking."

When your 3PL is not racing the clock of a leveraged buyout, you get stability. Stability makes the math easier.

Closing Out Your Fulfillment Equation

If your brand is on the rise, this is the moment to model your real fulfillment costs. You do not wait until the invoice surprises you. You build a model for storage, labor, shipping, and returns. You compare it to your margins. You adjust. You improve. You scale with confidence.

If you want a clearer view of what your numbers could look like inside a system built for visibility, accuracy, and fast adjustment, talk with G10. Their team will walk you through the math, show you the levers, and help you build a fulfillment plan that supports the kind of growth you are chasing.

Let them show you what your operation looks like when every box, every cost, and every detail is counted and ticked.