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With estimated delivery dates set to Manual, Tanqory checkout adds your location's fulfillment time to the transit time of the rate and shows a date range.
The steps from paid order to delivered
Fulfillment starts before the order, when stock arrives, and ends after it, when a return is closed. Each step has its own way to fail and its own record to keep:
| Step | What happens | What goes wrong | What to record |
|---|---|---|---|
| Receive | Count incoming stock against the purchase order and put it on a shelf | Wrong counts, items shelved in the wrong place | Units received per SKU |
| Pick | Take each item on the order from its shelf | Wrong item, wrong size or color, short pick | Picker, time, items picked |
| Pack | Check the items, choose the box, add filler and the packing slip | Box too large, damage in transit, missing item | Box used, packed weight |
| Label | Buy postage for the packed weight and size, print the label | Wrong weight, wrong address, wrong service | Carrier, service, tracking number |
| Hand to carrier | The parcel is scanned at pickup or drop-off | Missed pickup, parcel left on the shelf | Time of first carrier scan |
| Track | Follow the parcel and answer the buyer | Lost parcel, failed delivery, no updates | Delivered date, exceptions |
| Returns | Approve, receive, inspect, restock or write off, refund | Refund before the item arrives, unsellable restock | Reason, condition, refund date |
The first carrier scan matters more than the label. A label bought on Monday for a parcel the carrier scans on Wednesday is two days late, and only the scan shows it.
Ways to fulfill orders
You can do the work yourself, pay a warehouse to do it, or sell goods that someone else makes and ships. Each method moves cost from one line to another and gives up a different kind of control:
| Method | What you pay | What you give up |
|---|---|---|
| In house | Your own time or staff wages, space, shelving, packaging, postage | Hours you could spend on the store; capacity stops at what your team can pack in a day |
| Third-party logistics (3PL) warehouse | Setup and receiving fees, storage per shelf or pallet per month, a pick fee per order and per extra item, packaging, often a monthly minimum | Direct control of packing and inserts, fast fixes to a single order, and some flexibility on timing |
| Dropshipping | The supplier's price per unit, which includes their handling; no stock bought ahead | Margin, packaging in your name, control of ship times and stock accuracy |
| Print on demand | A higher cost per unit, printed and shipped one order at a time | Production days added to every order, a narrower product range, and returns of made-to-order goods |
A store can mix them: fast sellers from a warehouse, slow or bulky items from the workshop, a few products dropshipped. Each mix adds a source of split shipments, covered below.
When you compare methods, put each on the same basis: cost per order, including postage or excluding it, and including the time you spend yourself. Unpaid owner time makes in-house fulfillment look cheaper than it is.
Cost per order, worked out
Add up what fulfillment cost in a month and divide by the orders you shipped that month:
Cost per order = total fulfillment cost ÷ orders shipped
Take a store that ships 1,500 orders in a month. Packing takes 4 minutes per order at $18 an hour, the box costs $0.85 and tape and filler $0.25, and the storage room costs $600 a month:
| Cost line | Monthly cost | How it is worked out | Per order |
|---|---|---|---|
| Pick and pack labor | $1,800 | 1,500 × 4 min = 100 h × $18 | $1.20 |
| Packaging | $1,650 | 1,500 × ($0.85 + $0.25) | $1.10 |
| Storage share | $600 | Rent for the storage room | $0.40 |
| Before postage | $4,050 | $2.70 | |
| Label (postage) | Example figure, not a carrier quote | $7.00 | |
| Including postage | $9.70 |
On a $40 order, $2.70 is 6.75% of revenue, and $9.70 is 24.25%. That is why average order value matters for fulfillment: the box and the packing time cost the same whether the order is $40 or $80.
Returns belong in the cost too. If 5% of orders come back, each return takes 6 minutes to inspect and restock ($1.80 at $18 an hour) and you pay a $6.00 return label (again an example figure), returns add 0.05 × ($1.80 + $6.00) = $0.39 to every order shipped.
Storage per order also depends on how fast stock sells. Slow stock takes shelf space for longer, so a low inventory turnover raises the storage share of every order. Fulfillment cost then comes out of gross margin, or sits beside it as a separate line, depending on how you report; pick one and keep it.
Measures to watch
Four measures, each with a formula. The figures below are one store's month, not a target:
| Measure | Formula | Example (1,500 orders) |
|---|---|---|
| Time to ship | Orders handed to the carrier within your target ÷ orders shipped | 1,380 ÷ 1,500 = 92% |
| Order accuracy | Orders shipped with no wrong, missing or damaged item ÷ orders shipped | 1,488 ÷ 1,500 = 99.2% |
| Delivered on time | Orders delivered by the promised date ÷ orders delivered | 1,323 ÷ 1,470 = 90% |
| Cost per order | Total fulfillment cost ÷ orders shipped | $4,050 ÷ 1,500 = $2.70 |
Definitions differ between tools, so write yours down:
- Where time to ship starts. From the order, from payment, or from release after a fraud or address check. Count business days or calendar days, and say which.
- Where it stops. At label purchase or at the first carrier scan. The scan is the honest end point.
- Averages hide the slow orders. An average of 0.9 days can include 120 orders that took three days. Report the share shipped within target, not only the mean.
- Accuracy from complaints undercounts. Not every buyer reports a wrong item. Count errors found in returns and at a packing check as well.
- Delivered on time needs a delivered date. Orders still in transit at month end belong to next month's count, which is why the example divides by 1,470 delivered orders, not 1,500 shipped.
Each lever has a cost. A packing check before sealing raises accuracy and adds minutes per order. A later cutoff wins orders and shortens the time you have to pack. A faster carrier service raises delivered on time and costs more per label.
Partial fulfillment and split shipments
A partial fulfillment ships the items you have now and the rest later, for example when one item is on backorder. A split shipment sends one order in two or more parcels, from one location or from several.
Both cost money. Each extra parcel needs its own packing, packaging, label and handover. With the figures above, a second parcel adds $1.20 + $1.10 = $2.30 of packing and packaging plus a second postage charge: $9.30 with the $7.00 example postage. The other choice is to wait for the missing item or move stock between locations first, which costs days instead of money.
Tell the buyer before the first parcel arrives which items are in it, which are still coming and when. Give each parcel its own tracking number on the same order, so the buyer and your support team see the same thing.
The promise at checkout
The delivery date at checkout is a promise, and it has to match what your warehouse can do. It is built from three parts:
Delivery date = order day (after the cutoff, the next working day) + fulfillment time + carrier transit time
Take a cutoff of 2 PM, a fulfillment time of 1 business day and a service with 3 to 5 business days in transit. An order on Tuesday at 10:12 AM ships Wednesday and arrives between Monday and Wednesday of the next week. The same order at 3 PM counts as Wednesday's, ships Thursday and arrives between Tuesday and Thursday.
If the warehouse runs late during a busy week, the date shown at checkout is still the old one. Change the fulfillment time when your real handover time changes, not after the complaints arrive. Check the promise against your delivered on time figure each month: if it falls, either the warehouse, the carrier or the promise is wrong.
In Tanqory, each location's fulfillment time, order cutoff and working days are set in the shipping settings, and with estimated delivery dates set to Manual, checkout adds that fulfillment time to the transit time of the rate and shows a date range.
Questions
What is the difference between fulfillment and shipping?
Shipping is one part of fulfillment: moving the parcel from you to the buyer. Fulfillment also covers receiving stock, picking, packing, buying the label, tracking and returns. A store can have fast shipping and slow fulfillment if parcels wait days before the carrier collects them.
What is a good fulfillment cost per order?
There is no single good number. Cost per order depends on what you sell, the size and weight of the box, where you store stock and whether postage is included. We do not quote an industry figure here, because published figures count postage, storage and returns differently and few say which rule they used; compare your own cost per order month to month, calculated the same way.
When should a store move to a third-party logistics warehouse?
Compare your full in-house cost per order, including your own time at a wage, with a written quote from the warehouse on the same basis. Moving also makes sense when packing takes hours you need for the store, or when you need stock closer to buyers in another region. Check the monthly minimum and the fees for receiving and storage, not only the pick fee.
Is dropshipping a type of fulfillment?
Yes. In dropshipping the supplier holds the stock and ships the order, and you never handle the item. You save on stock and space and pay for it in margin and in control over packaging, ship times and stock accuracy.
Should fulfillment cost include postage?
Either way works if you use one rule every month. Reporting it both ways helps: before postage, to judge the warehouse, and including postage, to judge what an order really costs. Keep return costs in a separate line or add them per order shipped, and say which.