How does a volume-based pricing structure work in fulfillment?

A volume-based pricing structure means that your rate adjusts based on the number of shipments you send per period. If you send more packages, you move up to a higher tier, and the price per package decreases. The idea behind it is simple: higher volume makes the operation more efficient, and that benefit is reflected in your rate.

Why Tiered Fulfillment Works

In a warehouse, part of the work involves preparation: setting up workstations, registering items, and determining picking routes. That work hardly changes as the number of orders increases. The tasks per order remain the same, but the fixed portion is spread across more shipments.

That is why, with higher volumes, a lower price per package may apply without any change in service. At Cenfil, the tiered pricing applies to both the rate per order and the rate per order line.

What a growth curve means for you

The biggest advantage is that you don’t have to renegotiate as soon as you increase your production. The agreement is already in place; you just slot in. That also makes a forecast more reliable, because you can calculate in advance how doubling your volume will affect your logistics costs.

What a scale is not

A tiered rate is not a discount you receive after the fact, nor is it a bonus you have to negotiate. It is a rate schedule set in advance, in which your tier is determined by the number of shipments you actually send.

That difference matters when evaluating a proposal. A promised discount based on a certain volume is different from a rate that adjusts automatically, and only the latter can be included in your forecast without further discussion.

What to Look for When Comparing

• Over what period is the volume measured?
• Does the sliding scale apply to the entire fee or just a portion of it?
• Does it include pick-and-pack services and standard packaging materials?
• What happens during a quiet period?

A tiered pricing structure doesn't tell you much unless you know what services are included. So ask about how the rates are structured, rather than asking for a single price per package.

What if your volume fluctuates?

Seasonal trends and campaigns rarely result in consistent volume. Therefore, discuss in advance how to handle a peak in December or a sale, so you aren’t caught off guard when a period deviates significantly from your average. Whatever is agreed upon will be included in the contract.