How does tiered volume pricing work in fulfilment?

Tiered volume pricing means your rates adjust based on the number of shipments you send per period. If you send more packages, you move to a higher tier and the price per package decreases. The idea is simple: higher volume makes operations more efficient, and that benefit is passed on to you through lower rates.

Why fulfilment uses pricing tiers

A portion of warehouse work involves preparation: setting up locations, registering items, and determining pick routes. This work hardly changes when the number of orders increases. While the actions per order remain the same, the fixed costs are spread across a larger number of shipments.

That is why, with higher volumes, a lower price per package can 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 pricing tiers mean for your growth

The biggest advantage is that you don't have to renegotiate once your business starts growing faster. The agreement is already in place; you simply move along with it. This also makes forecasting more reliable, as you can calculate in advance how doubling your volume will affect your logistics costs.

What a tiered rate is not

A tiered rate is not a retrospective discount and not a bonus you have to negotiate. It is a pre-determined pricing table where your position is based on the number of shipments you actually send.

That distinction matters when evaluating a proposal. A promised discount at a certain volume is different from a rate that adjusts automatically, and only the latter can be included in your forecast without needing a conversation.

What to look out for when comparing

• Over what period is the volume measured?
• Does the tiered rate apply to the entire fee or only a part of it?
• Are pick and pack and standard packaging materials included?
• What happens during a quiet period?

A tiered pricing structure doesn't tell you much unless you know which services are included. Whether your online store is large enough depends directly on that. So ask about how the rates are structured, rather than asking for a single price per package.

And what if your volume fluctuates?

Seasonal trends and promotional 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.