The hidden drivers of rising eCommerce fulfilment costs

eCommerce fulfilment costs rarely get out of control because of one dramatic failure. More often than not, they creep up quietly when teams are forced to operate with incomplete, delayed or unreliable data. 

Sometimes, the signals don’t trigger alarms, but show up as: 

• Higher refunds 
• Worse delivery performance 
• Wasted ad spend 
• Slow reactions to issues (that could’ve been avoided in the first place) 

Over time, these issues compound, making eCommerce fulfilment costs much harder to control. 

If your brand is scaling and operating across multiple channels, warehouses and regions, these issues can multiply even faster. 

The uncomfortable truth behind modern eCommerce fulfilment costs is that they’re not just what you pay to fulfil orders, but what you also lose when decisions are made too late or with the wrong data. 

Why small fulfilment issues can become big cost problems 

Poor fulfilment performance doesn’t necessarily need high volume to start becoming expensive – it just needs repetition. 

Whether it’s picking errors, delays in inventory updates or carrier issues that take too long to rise to the surface, these problems can create ongoing cost pressures across logistics, customer service, marketing and finance when combined. 

And while your brand tries to keep these errors at a minimum, UK online retail sales grew 3.4% YoY to reach £127.41 billion in 2024. This means more orders, more volume, and more pressure placed on your systems – which is when the cracks are more likely to show.

The hidden cost problems brands consistently underestimate

Rather than one big crash or mistake, rising eCommerce fulfilment costs usually come from several issues that all bounce off one another. 

1. Gaps in inventory visibility 

One of the most common drivers of eCommerce fulfilment costs is inaccurate or delayed inventory data. 

When the stock information you see doesn’t reflect reality, you might: 

• Oversell products that aren’t available 
• Hold back inventory you could safely sell 
• Allocate stock inefficiently across different locations 

Research in the US states that 22% of online orders are cancelled due to poor inventory visibility, directly impacting revenue and customer trust. 

Every time you cancel an order, it carries the following additional costs: 

• Refund processing 
• Customer service handling 
• Lost marketing spend 
• Reduced chance of retention/repeat purchase 

These costs often sit outside the direct lines of ‘fulfilment,’ so they’re easy to overlook or underestimate. 

2. Missed delivery promises and service fallout 

Late dispatches and missed delivery promises have a huge impact on customer satisfaction, bringing an increase in eCommerce fulfilment costs. 

These financial consequences typically include: 

• Refunds or partial credits 
• Free reships or expedited replacements 
• Chargebacks and disputes 
• Marketplace or wholesale penalties 

When you look at the UK, delivery confidence is already fragile. Over two in three consumers (67%) experienced at least one delivery issue in 2024, and 78% say they’d like to see at least one service improvement across delivery services. 

There’s not a lot of patience for inconsistency, so while bad delivery events are unavoidable at least some of the time, it’s vital to ensure that they’re not a regular occurrence.  

If your brand lacks early visibility into carrier performance or regional delivery risks, problems are addressed reactively, meaning higher costs and a greater impact on the customer. 

3. Wasted marketing and promotion spend 

Arguably the least visible contributor to rising eCommerce fulfilment costs on this list is marketing spend. 

When promotions and paid media don’t align with live inventory availability, fulfilment capacity or delivery performance, your brand might be attracting demand that it can’t fulfil. 

This means: 

• Lower return on ad spend 
• Higher acquisition costs 
• New customers whose first experience is a failed or delayed delivery 

This is one of the fastest – and most hidden – ways to lose margin, and one of the hardest to trace back to fulfilment decisions. 

4. A poor returns or refund process 

Returns should never be a fulfilment afterthought, but instead a key part of your eCommerce strategy. 

In sectors like apparel and footwear, return rates can reach as high as 30%. That’s nearly one in three products that your brand must retrieve, grade, and potentially resell in the most cost-effective way. 

When your returns data isn’t available in near-real time, you’ll: 

• Delay refunds unnecessarily 
• Miss opportunities to resell returned stock 
• Tie up working capital 
• Increase write-offs

When you add these issues together, they’ll quietly inflate your eCommerce fulfilment costs over time. 

Where poor visibility erodes your margin

Visibility doesn’t just come down to having more dashboards, but instead having the right information early enough that you can act on it. 

The most costly gaps tend to crop up in four key areas: 

• Order visibility: what’s been promised versus what can realistically be delivered 
• Inventory visibility: what’s sellable now, not hours ago 
• Carrier visibility: where delays or exceptions are forming before more customers feel the impact 
• Returns visibility: what’s coming back, why it’s coming back, and whether it can be resold 

A common scenario might look like this: a product sells steadily, inventory data updates lag behind, orders keep flowing, and the issue only surfaces when cancellations or complaints hit your customer service inbox. 

By then, costs come down to refunds, support, lost trust and wasted spend. This might be a simple example, but a look into how delayed data or poor visibility can result in unwanted costs. 

How poor data quality increases eCommerce fulfilment costs  

Data latency and inconsistency are rarely catastrophic, but leave them to simmer and the costs can mount up. 

Poor data can lead to: 

• Late stock allocation changes 
• Missed dispatch cut-offs 
• Slow exception handling 
• Inaccurate demand forecasting 
• Over-reliance on costly expedited shipping 

Parcel volumes in the UK were forecast to hit 4.6 billion in 2025, showing a 5.7% YoY increase and adding further pressure to already stretched networks. 

Add to the fact that your decisions are made on outdated data, and it’s likely that your eCommerce fulfilment costs will rise as a result. 

What a cost-controlled fulfilment setup looks like  

To keep eCommerce fulfilment costs under control, your brand can’t rely on manual effort or constant firefighting. Instead, you need systems designed for visibility and early intervention. 

A resilient fulfilment setup includes most or all of the following: 

• A single view of orders across all sales channels 
• Live inventory data that clearly shows allocated, reserved and sellable stock 
• Exception-based alerts, not manual monitoring 
• Multi-carrier routing to reduce dependency and cost spikes 
• Integrated returns workflow that prioritises fast refunds and stock recovery 

As you’re probably aware, technology is at the heart of keeping eCommerce fulfilment costs as low as possible over time. Although it won’t eliminate these costs entirely, it will prevent them from escalating unnecessarily. 

The brands that win are those that control costs early

Just because a brand has a healthy sales margin, it doesn’t necessarily mean it’s the fastest growing. The ones that win are those that combine consistent sales with effective operations behind the scenes. 

These brands: 

• Identify fulfilment risk before customers feel it 
• Adjust demand or scale easily to avoid performance slips 
• Fix issues before costs compound 

As pressure on brands grows and eCommerce fulfilment costs can rise in any direction, visibility and timely decision-making are the difference between fulfilment getting in the way of growth and being an active driver of taking your business to the next level.