Need to know how to price order fulfillment?
Posted by admin on Dec 7, 2008 in Other - Business Finance |
benson40 asked:
We are pricing a project where we pick-n-ship product for a customer of ours. They do promotional products for large companies. We are doing warehousing and order fulfillment of about 25 to 50 orders a month. They want a flat rate of like $4 no matter if we have to pick 5 items or 50 items. Also we will be using UPS or FEDEX and we are required to do monthly reports for them. I need help pricing this job, I just don’t see how we can justify a $4 flat fee.
Martial Arts Uniforms - Karate & TKD Uniforms
We are pricing a project where we pick-n-ship product for a customer of ours. They do promotional products for large companies. We are doing warehousing and order fulfillment of about 25 to 50 orders a month. They want a flat rate of like $4 no matter if we have to pick 5 items or 50 items. Also we will be using UPS or FEDEX and we are required to do monthly reports for them. I need help pricing this job, I just don’t see how we can justify a $4 flat fee.
Martial Arts Uniforms - Karate & TKD Uniforms
This type of work can be costed ONLY if you use time studies to establish piece rates. This is very common in your industry. You are doing fulfillment for a company in the Advertising Specialty Industry.
Just remember that cost is the result of an activity. Break it down into steps, cost each step, and you will have developed your costing system. Automating it is a piece-of-cake, once you calculate it manually. It will make you more responsive to requests for quotes.