Understanding Fulfillment Storage Pricing: Occupancy Rate vs Per Unit Rate

Understanding Fulfillment Storage Pricing: Occupancy Rate vs Per Unit Rate

Harsh Vaidya

By Harsh Vaidya

May 24, 2023

If you’re an e-commerce seller in India, it’s crucial to evaluate and understand the significance of two pricing models that can greatly impact your fulfillment costs and operations: occupancy-based rates vs. per unit-based rates.

Let’s dive into the details and explore why choosing the right pricing model is essential for your business success.

📌 Occupancy-based rates:

– Charges based on the physical space your inventory occupies in the warehouse.

– Ideal for sellers with bulkier or larger items that require more space but have lower unit quantities.

– Offers a cost-effective option for products that occupy significant warehouse space.

Example: If you have 10 large furniture items occupying 100 square feet of warehouse space, you would be charged based on the occupied space, regardless of the number of items.

📌 Per unit-based rates:

– Charges based on the actual number of units stored or processed.

– Suitable for sellers with high-volume inventory and smaller-sized products.

– Provides flexibility and cost efficiency by paying for the specific quantity of units.

Example: Suppose you store 500 small electronic gadgets in the warehouse. With per-unit-based rates, you would be charged based on the actual number of units stored, offering flexibility and cost efficiency.

Selecting the most suitable pricing model depends on various factors unique to your business.

✅ Consider your product characteristics, such as size and weight.

✅ Evaluate your sales volume and storage needs.

✅ Opt for occupancy-based rates if you have larger or unique items that require more warehouse space.

✅ Choose per unit-based rates if your product range consists of smaller-sized items or experiences fluctuating demand.

In conclusion, the best pricing model for e-commerce fulfillment in India depends on your product characteristics, sales volume, and storage needs. Occupancy-based rates are ideal for sellers with bulkier or larger items, while per-unit-based rates are suitable for sellers with high-volume inventory and smaller-sized products. By evaluating your specific needs and requirements, you can ensure that you are getting the best possible value for your money.

Supercharge your fulfilment with WareIQ now, contact our team.

Harsh Vaidya
Author

Harsh Vaidya

Harsh Vaidya is the Founder & CEO of WareIQ - a Y-Combinator-backed full-stack fulfillment solution catering to the fulfillment & shipping needs of 400+ eCommerce brands across categories. He was previously the Chief of Staff at Pitney Bowes managing Corp Dev & Strategy for $2.4 B SMB BU. He has 10+ experience in Strategy Consulting & SMB tech.

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