Pick and pack fee

In plain words

A pick and pack fee is the warehouse's charge for handling an order. Someone walks to the shelf, picks the items, packs them and hands the parcel to the carrier. Most contracts charge a base fee for the order, which covers the first item, and a smaller fee for each item after it.

The fee counts items, not products sold. A free gift is an item. So is a sample, an insert that has to be picked, and the second unit of a buy-one-get-one. Each adds a pick whether or not the customer paid for it.

Formula

• Pick and pack = base fee per order + extra-pick fee × (items in the order − 1)

Worked example

One bag costs the base fee, $1.18. Three bags cost the same base fee plus $0.40 for two extra picks.

Add a free mug and the engine counts a third extra pick, $0.60 in all, although the customer still pays $102.00.

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

Pick and pack is not the shipping label

The warehouse charges for labour and the carrier for transport. They arrive on different invoices and move for different reasons: picks follow the number of items, the label follows weight and distance. A bundle saves most of the label per unit and almost none of the pick.

Using it

Check how your contract counts. Some charge per item, some per distinct product, some have a higher fee for fragile or oversized items, and some bill kitting as a separate job. If a gift needs special handling, such as a mug that must be wrapped, enter that as the gift's own handling cost. The standard extra-pick fee will understate it.

In Offer Suite

In Offer Suite's engine every physical unit in the parcel is a pick, gifts included. An extra-pick cost is charged once for each unit after the first, and a gift line can carry its own handling cost per unit on top.

Source: Offer Suite's margin engine.