This topic varies greatly from one fulfillment company to another. Companies like ShipHero and Red Stag usually stick with one storage fee option or the other. Correspondingly, it’s ShipSage’s and our client’s best interest to provide a choice for storage that best fits your business.
In our efforts to offer a more flexible fulfillment service, ShipSage accommodates two storage fee options: per cubic foot or per pallet. Since we support both FBA (fulfillment by Amazon) and FBM (fulfillment by merchant) sellers, we thought it best to include both storage options, however, these fee options are not mutually exclusive to FBA and FBM. Additionally, we are presenting only the storage fees, and not referring to all storage components like inbound receiving and special projects. In the excerpt below, we will discuss the differences between storage by cubic feet and pallets.
Storage by Cubic Foot
Storage by cubic foot is defined by what area measurement the items or inventory stock take up. For example, to calculate cubic feet, multiply the length, width and height of an item. If you were selling a book which was 6 inches by 9 inches by 1 inch, the book would be 54 cubic inches total. Since there are 1,728 cubic inches in a cubic foot, you would divide 54 by 1,728 to determine the cubic feet of your book. Finally, to find out your storage fee, you would multiply your quotient (54/1,728= .031) by the rate charged per cubic foot.
If you are selling one product at a time, storage per cubic foot would be more beneficial to use than per pallet. From a pricing point of view, you would only pay for the space your product takes up. This storage option is often used by FBM sellers who conduct direct business to customers (B2C).
Storage by Pallet
Instead of being charged storage for each individual item, storage by pallet has the option of being charged a flat fee per month. This is charged whether you have one item or whether you have 10 items on the pallet. Since the average pallet size is 64 cubic feet, it might be suitable to store items and inventory in bulk. However, be cautious of how much product you are considering placing on a pallet because it might not all fit so neatly, and you might be paying for two or more pallets in the end.
The per pallet storage option is used mostly by sellers who have bulk inventory to sell or move. This option is better for them because they are moving a whole lot of items for one single fee. Often, pallets are used by FBA sellers who need to move their inventory to another warehouse, for example, an Amazon fulfillment center (B2B). Storing their inventory in this way allows for easy palletizing and convenient transferring of large inventory.
ShipSage’s services are simple, speedy, and scalable. We strive to make every effort to provide the best for our clients, especially when it comes to their business goals and needs. Leave your fulfillment to us!