A low base rate does not tell you what fulfillment will cost. Storage method, receiving work, order profile, packaging, system support, returns and exceptions can all change the invoice. Cross-border activity adds another set of responsibilities that must be assigned before inventory moves.
This framework gives brands a repeatable way to compare proposals from a fulfillment center in Canada. It is not a price benchmark, tax calculation or promise of savings. Use your own forecast, written provider rates and current carrier or government charges. Ask a customs broker and tax adviser to review any customs or tax assumption.
Start with one comparable operating period
Choose the same period for every proposal: a month is often practical, while a peak-period scenario can be reviewed separately. Record the following inputs for that period:
- average and peak inventory by the provider’s billing unit, such as pallets, bins or cubic volume
- inbound receipts, cartons, pallets and units
- DTC orders, wholesale orders and marketplace preparation work
- average units per order and the share of orders needing added handling
- packaging types supplied by the brand or provider
- returns and other exception cases
- system connections, user access and support work
- shipping destinations, package dimensions and weights
Do not compare one provider’s average month with another provider’s peak month. Keep volume and order-mix assumptions identical.
Use one all-in cost formula
Apply this formula to each proposal:
All-in fulfilment cost = storage + receiving + order handling + packaging + value-added work + systems + returns + account/program fees + exception charges + freight and carrier surcharges + approved cross-border administration
Then calculate two comparison views:
- Cost per shipped order = all-in fulfilment cost ÷ shipped orders
- Cost as a share of net sales = all-in fulfilment cost ÷ net sales for the same period
The second view is a management measure, not a statement that logistics caused every margin change. Keep product cost, duties, taxes, retailer deductions and customer-service credits in separate lines unless the proposal explicitly places them in the provider invoice.
Build the worksheet by cost category
Storage
Record the billing unit, rate, minimum, measurement date and any age or peak-period rule. A pallet rate and a cubic-volume rate are not directly comparable until the inventory forecast is converted into each method. Ask how partially used locations, non-standard pallets and inventory held for review are billed.
Worksheet line: billable storage units × written rate + applicable written surcharge.
Receiving and inbound handling
Separate routine receipts from floor-loaded containers, mixed-SKU cartons, relabelling, counting discrepancies and appointments. Ask what documentation must arrive before the shipment and what happens when it does not.
Worksheet line: routine inbound work + forecast exception work.
Pick, pack and packaging
Model the actual order profile. A per-order rate, first-item rate, added-item rate and case-pick rate can produce different results for the same volume. Add packaging only once and note who owns the materials.
Worksheet line: (orders × base order rate) + (added units × added-unit rate) + provider packaging + special pack work.
Systems and reporting
List implementation, connection, recurring support, report and change-request fees separately. Write down the systems in scope, data owner, update method, exception contact and acceptance test. Do not assume a connection updates instantly or behaves the same across every channel.
Worksheet line: one-time costs allocated across the chosen review period + recurring system fees + forecast support work.
Returns and exceptions
A return can include receipt, identification, inspection, photos, grading, repacking and movement to an approved status. The brand still decides policy, refund or credit treatment and allowed disposition. Model ordinary returns separately from refused wholesale deliveries, address corrections, damaged inbound freight and manual investigations.
Worksheet line: routine returns + approved added steps + forecast exceptions.
Freight, carrier surcharges and cross-border work
Use the current written carrier tariff or negotiated schedule for the exact package profile and lanes. Identify fuel, residential, remote-area, address, dimensional and peak charges that may apply. For cross-border moves, separate carrier charges from customs brokerage, duties, taxes and government fees. A fulfillment provider is not automatically the importer, customs broker or tax adviser.
Worksheet line: forecast shipment charges + applicable tariff surcharges + separately approved cross-border administration.
Illustrative worked example
The figures below demonstrate the arithmetic only. They are not Evolution rates, market averages or a quote.
Suppose Brand A enters these monthly values from a written proposal:
- storage: 100 billable units × $10 = $1,000
- receiving: $400
- order handling: 1,000 orders × $2 = $2,000
- packaging: 1,000 orders × $0.50 = $500
- systems and reporting: $300
- returns and exceptions: $300
- freight and applicable surcharges: $5,500
The all-in illustrative total is $10,000. Dividing by 1,000 shipped orders gives an illustrative cost of $10 per shipped order for that scenario. If order mix, package dimensions, destination mix or exception volume changes, the result must be recalculated. Never carry these figures into a budget or vendor decision.
Compare scope, not just totals
A lower total may omit work that another proposal includes. Beside each line, mark it as included, usage-based, minimum, pass-through, excluded or not yet confirmed. Ask the provider to identify the source document that controls each charge and how a rate change is communicated.
The same review should identify responsibility. The brand owns commercial decisions, product information and approved procedures. The carrier owns its service and tariff. The importer and customs broker own their documented customs roles. The fulfillment provider owns only the warehouse and administrative work written into the agreement.
For related operating detail, review Evolution’s dedicated warehouse service, B2B order fulfillment and returns-management workflow. Brands evaluating Canada–US order flows can also review cross-border domesticated shipping as a separate operating model; no routing, cost or customs outcome should be assumed from that page alone.
Questions to resolve before signing
- Which forecast and order profile produced the quote?
- Which fees are fixed, usage-based, minimum or pass-through?
- How are storage dimensions and billing units measured?
- What work counts as an exception?
- Which packaging is included, supplied by the brand or billed separately?
- What system work is included at launch and after launch?
- Which party holds each customs, tax, carrier and retailer responsibility?
- How will both parties test invoice accuracy against the contract?
Review your operating model with Evolution
Bring your channel mix, forecast, product dimensions and current cost categories to a fulfillment strategy call. Evolution can explain which warehouse services are in scope and identify the operational inputs needed for a proposal. Carrier, customs and tax assumptions remain subject to the relevant provider and qualified adviser.
Review Your Cost Inputs With Evolution →
Share your channel mix, forecast, product dimensions and current cost categories. We’ll confirm which Evolution services belong in the operating model.
