Pick & Pack Cost Calculator
Calculate the cost of picking and packing orders including labour, materials, and per-item costs. Determine cost per order and as a percentage of average order value for fulfillment profitability analysis.
Enter your labour costs, picking efficiency, packing materials, and order volume to calculate pick and pack cost per order and total period cost.
Number of orders to fulfill
Fully loaded labour cost (wage + benefits)
Picking productivity or throughput per hour
Box, cushioning, tape, labels
Per SKU: wrapping, insert, etc.
Average number of SKUs per order
To calculate cost as % of AOV
Formula
Pick Cost/Order = Labour/Hour ÷ Orders/Hour | Pack Cost/Order = Material + (Items × Per-Item Cost) | Total Cost/Order = Pick + Pack | Total Period Cost = Cost/Order × Orders | Cost % of AOV = (Cost/Order ÷ AOV) × 100
Pick and pack cost is a key component of fulfillment economics. Pick cost depends on labour rate and picking productivity. Pack cost is the sum of materials and per-item handling. The total cost per order, expressed as a percentage of average order value, determines fulfillment profitability.
Worked Example
1,000 orders/month, $18/hour, 50 orders/hour, $2 materials, $0.25/item, 3 items/order, $50 AOV.
Pick cost = $18 ÷ 50 = $0.36/order
Pack cost = $2 + (3 × $0.25) = $2.75/order
Total cost/order = $0.36 + $2.75 = $3.11/order
Total monthly cost = $3.11 × 1,000 = $3,110
Cost as % of AOV = ($3.11 ÷ $50) × 100 = 6.2%
At 6.2% of order value, fulfillment costs are well within acceptable ranges. If AOV were $30, cost % would rise to 10.4%, suggesting the need to optimize labour or materials.
Frequently Asked Questions
Use this in your workflow
Use this calculator to model fulfillment economics and justify automation investments. Pair with pricing strategy to ensure margins cover fulfillment cost. Browse all Free Business Calculators.
When to use this calculator
- →Building a financial model for e-commerce or fulfillment operations
- →Evaluating whether in-house fulfillment or 3PL outsourcing is more cost-effective
- →Justifying investment in warehouse automation (pick-to-light, robots) based on labour cost savings
- →Pricing products to ensure margins cover fulfillment costs and provide profit
Worked example: e-commerce fulfillment profitability
A useful reference before entering your own figures above.
| Item | Amount |
|---|---|
| Orders per month | 2,500 |
| Labour cost per hour | $18 |
| Orders picked per hour | 60 |
| Packing material cost | $2.00 |
| Per-item handling cost | $0.25 |
| Items per order (avg) | 2.5 |
| Pick cost per order | $0.30 |
| Pack cost per order | $2.63 |
| Total pick & pack cost | $3.13/order |
| Total monthly cost | $7,825 |
| Average order value | $60 |
| Fulfillment cost as % AOV | 5.2% |
At 5.2% of AOV, fulfillment costs are healthy. If the business has 40% gross margin on $60 AOV ($24 per order), fulfillment cost of $3.13 still leaves $20.87 for overhead and profit. Improving picking efficiency to 70 orders/hour would reduce cost to $2.56/order.
Common mistakes
- !Forgetting to include benefits, taxes, and overhead in labour cost. Use fully loaded labour rate, not just hourly wage.
- !Underestimating picking time. Account for picking delays, travel time, and equipment downtime — real productivity is often 30% lower than theoretical maximum.
- !Not including per-item costs. Individual item wrapping, inserts, or special handling add up quickly.
- !Confusing pick and pack cost with total fulfillment cost. Shipping, returns processing, and warehouse overhead are separate costs.
Responsible fulfillment planning
Pick and pack cost is a critical lever in e-commerce profitability. Use this calculator to model the impact of labour productivity improvements, material cost reductions, and order volume growth. If fulfillment cost exceeds 15% of AOV, consider automation, outsourcing to a 3PL, or adjusting pricing strategy. Always factor in fulfillment cost when setting product price and margin targets.
Related calculators
Frequently asked questions
What is pick and pack cost?
Pick and pack cost is the labour and material cost to pull an order from inventory (pick) and prepare it for shipment (pack). It includes picking labour, packing materials (box, cushioning, labels), and per-item handling costs. It is the core component of fulfillment economics.
What is a typical pick and pack cost?
Typical costs range from $1–$5 per order, depending on labour rates, picking efficiency, and product type. High-volume e-commerce often achieves $2–$3 per order. Specialty or fragile items may reach $5–$10.
What is a good pick and pack cost as % of AOV?
A healthy target is 5–10% of average order value. If AOV is $50, aim for $2.50–$5 in fulfillment cost. If your percentage exceeds 15%, consider automation, outsourcing, or pricing adjustments.
How can I reduce pick and pack cost?
Improve picking efficiency (warehouse layout, pick-to-light systems), reduce material costs (thinner boxes, reusable packaging), negotiate labour rates, or automate with robots. Labour typically represents 40–60% of cost, so productivity gains yield the highest ROI.
How does labour cost affect total cost?
Labour is typically the largest cost component, representing 40–60% of total fulfillment cost. A $1/hour increase in labour cost (holding productivity constant) typically increases cost per order by $0.02–$0.04. This is why productivity improvements are critical.
What should I include in packing material cost?
Include the box or mailer, internal cushioning (bubble wrap, air fill), protective materials, shipping labels, and thank-you inserts. Do not include shipping postage or carrier fees — those are separate fulfillment costs outside of pick and pack.