Black Friday, same-day delivery, rising return rates: modern retail logistics is under massive pressure.
While many focus on speed, the real competitive advantage lies elsewhere: in the cost structure per shipped unit: the Cost of Order Fulfilment (CoOF).
This article explains why CoOF is the decisive metric for profitability, how companies can understand their true process costs, and how Ferag Solutions delivers the lowest fulfillment costs in the industry.
What is the Cost of Order Fulfilment?
The Cost of Order Fulfilment (CoOF) is the total cost structure required to process an order from inbound to outbound.
It includes:
- CAPEX: Investments in infrastructure, technology & systems
- OPEX: Ongoing labor and operating costs
- Process costs: Handling, pick, pack, consolidation, returns
While CAPEX is plannable, OPEX significantly impacts margins, especially in labor markets with staff shortages.
CoOF combines all these factors into a single metric: cost per order.
Why CoOF is becoming the new key metric of the industry
Traditional KPIs such as “cost per pick” or “throughput per hour” only capture fragments.
CoOF reveals the true efficiency of the entire fulfillment chain.
It:
- links operational excellence to financial performance,
- enables comparability across environments (B2B, B2C, omnichannel),
- enables data-driven investment decisions.
Those who understand CoOF don’t just optimize processes, they optimize profit per delivery.
Ferag Solutions: The lowest fulfillment costs. Proven.
With more than 70 years of logistics experience, Ferag Solutions designs and integrates scalable fulfillment solutions, including overhead systems such as ferag.skyfall where they add the most value. We enable:
- up to 100,000 units/day,
- 30–40% lower process costs,
- outstanding space efficiency through overhead monorail technology,
- energy-efficient, low-maintenance integrated solutions.
Ferag customers such as JD Sports, Mango, and Sephora show: automation and flexibility are not mutually exclusive. On the contrary, they multiply each other.
How ROI becomes visible
Ferag Solutions uses a COOF Calculation Tool that allows customers to calculate their individual savings potential and to compare different solution designs side by side, enabling transparent comparisons with existing or planned systems.
Transparency is the new competitive advantage.
Conclusion
The future of logistics will not be defined by speed, but by cost transparency and efficiency. The Cost of Order Fulfillment makes profitability measurable per unit and reveals where real competitive advantage lies. Those who actively manage and reduce CoOF secure sustainable margins and scalable growth.
Ferag Solutions: Because every unit counts.
Download the whitepaper now:
“How to calculate and reduce the Cost of Order Fulfilment.”
