Pick and pack fees are what a fulfilment provider charges to turn each order into a shipped parcel, or what the same work costs you to run in-house. Either way, the headline per-order fee is only part of the picture, and a surprising amount of the total is driven by one thing you control: the packaging. This guide breaks down the fee structure and shows where packaging decisions move the number.
The standard fee structure
| Fee | What it covers | Typical basis |
|---|---|---|
| Pick fee | Retrieving each line item in the order | Per item, sometimes first item included in a base fee |
| Pack fee | Checking, packing and sealing the order | Per order |
| Packaging materials | The satchel, box, void fill and tape used | Per unit, at cost or with a margin |
| Storage | Holding your stock | Per pallet, per shelf or per cubic metre per month |
| Receiving | Booking in inbound stock | Per hour or per pallet or carton |
| Shipping | The carrier charge | Passed through, often on the provider’s negotiated rate |
| Returns | Receiving, inspecting and restocking | Per return |
| Account or minimum | Platform access, monthly minimum | Fixed monthly |
When you compare providers, ask for a quote against a real month of your orders with every line itemised, not a single blended “per order” figure. For the wider decision, see pick and pack fulfilment services.
Where packaging drives the fee
Dimensional-weight shipping charges
The largest hidden cost is freight on oversized parcels. Carriers bill on the greater of actual weight and dimensional (cubic) weight, calculated from the outer dimensions. A light order in a box two sizes too big is charged as if it weighed two or three kilograms. Across thousands of orders this dwarfs the pick and pack fees themselves. Right-sizing the outer is the single biggest saving available.
Pack time
If the pack fee is priced on average handling time, anything that slows the bench raises it: choosing a box size per order, folding boxes flat, multiple passes of tape, packing void fill around a loose item in an oversized carton. A short staged range of right-sized formats and one-motion sealing with water activated tape cuts that time.
Materials
Running one giant satchel size for everything wastes film on small orders. Two or three sizes matched to your order profile use less material per parcel. Recyclable honeycomb mailers also remove a separate bubble-wrap line item.
Returns
A return that arrives in a destroyed mailer needs re-packing to go back to stock, and a fresh unit to re-ship. Resealable mailers keep the return recoverable in the same packaging.
“Pick and pack time” and “rates”: the same lever
Whether a provider quotes a flat rate per order or bills on pick and pack time, the packaging setup moves the number the same way. Faster, more predictable packing lowers a time-based bill and makes a flat rate cheaper for the provider to offer. If you run it in-house, the “rate” is your labour cost per order, and the same efficiencies apply.
Cutting your pick and pack costs
- Profile your orders. Weigh and measure a week of shipments; group by size.
- Right-size the range. The smallest set of satchel and carton sizes that fits the profile, with a rule for which goes to which order.
- Standardise sealing. One closure method per format; a tape dispenser for cartons.
- Stage packaging at the bench. Pre-opened, by size, within reach.
- Weigh and label at the bench. So freight is billed on the real parcel and disputes have evidence.
- Give your provider the spec. If you outsource, hand over the format range and sizing rules so they pack to it.
How Carewell Group helps
Carewell Group is an Australian packaging manufacturer and supplier. To bring your pick and pack costs down we provide:
- Poly satchels, kraft paper mailers and recyclable honeycomb padded mailers in matched size ranges.
- Right-sized cartons, paper void fill and water activated tape with dispensers for one-pass sealing.
- Custom print on mailers and tape so branding adds no pack time.
- A parcel-profiling review: send a week of order dimensions and we will recommend the three or four formats that cut your freight and pack time.
Carewell can meet all your packaging needs for your business. Talk to our expert and we will work to your required MOQ. Call +61 (02) 8760 1491 or request samples and a sizing review. See also pick and pack solutions and the in-house versus contract packing comparison.
Frequently asked questions
What are pick and pack fees?
The charges to fulfil each order: a per-item pick fee, a per-order pack fee, packaging materials, storage, receiving, pass-through shipping, returns handling and any monthly minimum.
What is a typical pick and pack fee?
It varies by provider and product, but expect a per-order pack fee plus a per-item pick fee, with storage billed monthly per pallet or cubic metre. Always quote against a real month of your own orders.
Why is my shipping cost higher than the parcel weight?
Carriers bill on the greater of actual and dimensional (cubic) weight. An oversized or half-empty box is charged on its dimensions.
How do I reduce pick and pack costs?
Right-size the outer to the contents, run a short staged format range, standardise sealing, and weigh and label at the bench. If you outsource, give the provider the same spec.
Sources
- Australia Post, cubic weight and parcel sizing: auspost.com.au
- MHI, order-picking fundamentals: mhi.org
Written by Alif Vasaya, digital and content strategy, Carewell Group. Carewell Group is an Australian packaging, food packaging, tape, industrial safety and 3PL supplier serving all of Australia. Last updated 10 September 2026.