Where Are Pick Fees Applied? Locations, Platforms, and Use Cases

Pick Fee application depends on where goods are stored and processed. In practical terms, pick fees appear wherever there is physical inventory and the need to retrieve items for orders. This guide outlines the typical locations and platforms where pick fees are charged, and offers beginner-friendly examples and considerations.

Common physical locations where pick fees are charged

• Third-party logistics (3PL) warehouses: Outsourced fulfillment providers charge pick fees as part of their service rates. These warehouses serve multiple clients, each paying according to their usage.
• Public warehousing: Shared facilities that store goods for various merchants usually charge standardized pick fees. They are commonly used by seasonal or smaller sellers.
• Private or dedicated warehouses: A merchant that leases or operates a dedicated warehouse may still track pick costs internally, charging pick fees between business units for cost allocation.
• Fulfillment centers operated by marketplaces: Major marketplaces that provide fulfillment services charge fees that include picking. Sellers using these services will see pick-related costs in their invoices or fee summaries.
• Cold storage and specialized facilities: Cold chain or regulated facilities often have higher pick fees due to temperature control and compliance requirements.

Digital platforms and software where pick fees are relevant

• Warehouse Management Systems (WMS): WMS platforms track pick activity and produce data that billing systems use to calculate pick fees. Modern WMS reports help merchants reconcile invoices and analyze pick efficiency.
• Transportation Management Systems (TMS) and fulfillment dashboards: Integrated dashboards show pick-related KPIs and costs alongside shipping charges so merchants can see the full cost to fulfill.
• Marketplace seller portals: Marketplaces break down fulfillment fees and may show the portion attributable to picking, even if billed as a single fulfillment fee.

When pick fees are applied during the fulfillment flow

Pick fees are typically recorded when the pick action is completed and scanned in the warehouse system. The timing depends on the provider's billing practice — daily logs are common, with monthly invoices summarizing activity. In some models pick charges are accrued per order and settled periodically.

Use cases and contextual examples

• E-commerce sellers using a 3PL: A DTC brand stores inventory in a 3PL's public warehouse. Each customer order triggers picks; the 3PL bills monthly for total picks across the billing period.
• Marketplace fulfillment: Sellers opt into a marketplace's fulfillment program; their products are stored in the marketplace's centers and the seller pays the platform's fulfillment fee, which encompasses picking.
• Seasonal pop-up inventory: A retailer ships seasonal goods to temporary fulfillment hubs closer to customers. Short-term storage often carries higher per-pick costs due to setup and lower economies of scale.
• B2B distribution: When distributors fulfill large, pallet-level orders, picks may be for full cartons or pallets; pick fees are applied per handling event rather than per unit.

Factors that affect where pick fees are higher or lower

• Facility automation: Facilities with automation and efficient slotting typically have lower pick fees because labor per pick is reduced.
• Geography and labor costs: Warehouses in high-labor-cost regions may charge higher pick fees.
• Special handling needs: Temperature control, hazardous materials, or regulated products require extra care and often carry premium pick fees.
• Order profile: High-SKU, low-quantity orders increase picks per order and therefore raise total pick-related costs even if per-pick fees are modest.

Practical checklist for merchants choosing fulfillment locations

• Request a detailed rate card and sample invoice for the specific facility you plan to use.
• Compare per-pick, per-line, and per-order models to find the best fit for your order profile.
• Ask about batching, wave picking, and any automation that may reduce effective pick costs.
• Consider geographic placement to reduce shipping distance and overall landed cost even if pick fees vary.

Conclusion



Pick fees are applied wherever physical items are retrieved for fulfillment. Whether in a shared public warehouse, a marketplace fulfillment center, or a private distribution hub, understanding where and how pick fees are charged helps merchants select the right fulfillment strategy and control costs. For beginners, the key is to map your order patterns to provider pricing models and ask providers for transparent examples so you can compare total landed fulfillment costs, not just isolated line items.