The quote looks competitive. The pricing seems fair. You move forward, launch the program, and then the invoices start arriving.
- Storage fees.
- Pick and pack charges.
- Receiving fees.
- Shipping markups.
- Credit card processing fees.
- Monthly minimums.
Suddenly, that competitive quote doesn’t look so competitive anymore.
Many merchandise programs are priced around the product itself, while the costs of storage, fulfillment, maintenance, and shipping are handled separately. Those charges aren't always obvious when comparing proposals. The result? A program that looks less expensive upfront can end up costing significantly more over time.
Storage fees add up fast
Inventory-based programs require you to purchase products upfront and store them in a vendor’s warehouse. That storage isn’t free. Fees are charged per bin, per pallet, or per square foot.
For example, a program with 50 SKUs, each requiring one storage bin at $8 per month, costs $4,800 annually before a single item ships.
Some vendors also charge aging fees for inventory that sits too long. Slow-moving sizes and outdated designs become more expensive the longer they don’t sell.
Fulfillment fees are rarely straightforward
Pick-and-pack fees can range from a few dollars per order to considerably more, depending on order complexity. And that’s just the start.
Many vendors add:
- Per-line item charges for multi-item orders
- Fees for folding, polybagging, labeling, or hangtags
- Return processing and restocking labor fees
Some merchandise providers outsource fulfillment to third-party logistics companies (3PLs), where picking, packing, storage, and special handling may be billed separately. Depending on the provider's pricing model, those costs can appear as additional charges in your program.
Some programs also have monthly minimums or store maintenance fees, even when order volume is low. These can add hundreds of dollars per month regardless of how many orders ship.
Credit card fees quietly increase your total cost
Another line item many buyers don’t expect is credit card processing.
Some platforms charge a separate 3% fee at checkout when orders are paid by credit card. That fee is not included in product pricing and is applied on top of the total order value.
Over time, those fees add up quickly, especially for high-volume or enterprise programs.
Shipping markups are a quiet profit center
Vendors often negotiate discounted carrier rates, but those savings don’t always reach you.
International orders may include paperwork or brokerage fees. Packaging materials are sometimes billed separately, often at a markup.
Shipping is an important area to examine. Ask whether you can use your own carrier account and avoid additional shipping markups or handling fees.
Administrative fees appear when you least expect them
Adding new products? That may be an hourly charge.
Updating images or pricing? Another fee.
Rebranding or changing logos? Setup fees per product, per decoration method, per SKU.
Routine maintenance shouldn’t require billable hours. But for many vendors, every change becomes an invoice.
What does “free setup” really include?
Free setup can seem like a great benefit, but make sure you understand what's included and what’s not. Does it cover store design, initial product loading, branding, and integrations? What happens when you need to make changes? A free launch doesn't necessarily mean free ongoing maintenance.
What to do about it
Before signing with any vendor, request a full breakdown of every fee beyond product cost.
- Are there storage, receiving, and fulfillment charges beyond product pricing?
- Are shipping charges based on actual carrier costs, published rates, or another pricing structure?
- Are there technology fees, monthly minimums, or credit card charges?
- What does it cost to add products, change logos, or update stores?
- Can products be produced on demand instead of purchased into inventory?
If pricing is vague or requires multiple follow-up questions, that’s your signal. Vendors who operate transparently can clearly explain the total cost of ownership upfront. Vendors who rely on hidden fees cannot.
The bottom line
The lowest product price isn't always the lowest total program cost.
Before choosing a branded merchandise partner, make sure you understand the full picture: product pricing, storage, fulfillment, shipping, technology, and ongoing program maintenance.
An on-demand model can eliminate the need to purchase and store inventory for many products, reducing upfront investment and the risk of leftover merchandise. For products that do require inventory, transparent pricing helps you understand the true cost before committing.
At iCoStore, we believe you should know what your program will cost before you launch it, not discover it as invoices arrive.
Ready to see what transparent pricing actually looks like? Contact us to book a demo.
