The Basics

The term of the agreement is month-to-month and the Online Seller (you), will ship goods marked "in care of" (c/o) the FulFillment Service (us), separated by SKU (properly-marked and packaged for handling). The Fulfillment Service will act as the Online Seller's independent contractor and not as a professional fundraiser, solicitor, counselor, or commercial co-venturer. The Fulfillment Service holds merchandise for short periods, without any holding charge, readied for shipment and is not your warehouse therefore, Fulfillment Service shall be minimally liable for damages or the loss of or injury to goods briefly held or handled and Online Seller should maintain at its expense any legal liability insurance policy.

Fulfillment and Design Services

As an all inclusive service, Schedule A details that the Fulfillment Service shall periodically design and update: Inserts and Promotional Materials to ensure the un-boxing experience is remarkable; Virtual Offers, Online and Social Media Promotional Materials to give the Online Seller materials with which to promote and share within their networks; Product Variants & Add-ons to test market, keep the shop fresh and give reason for customers to return shop; New Products & Designs and also weigh-in on ways to sell to new markets or channels.

No other fulfillment service does all of this! However, the Fulfillment Service is just a sophisticated service bureau performing tasks set by the Online Seller's managers and is therefore an Aid to Management but Not a Management Replacement. While the Fulfillment Company generally starts off by providing the Online Seller services based on our well-honed methods, eventually, through guided interactions, the Online Seller and Fulfillment Company alter the methodology providing breakthroughs in store operation and this often translates to things like marked increases in sales.

Of course, the Fulfillment Service will process orders and ship, often daily and the Fulfillment Service doesn't mark-up any expenses as they are stewards to maximizing Online Seller's net and reducing costs such as discounted shipping over prices paid at the post office.

Rates and Charges for the Services

Schedule B details everything about Fulfillment Service's flat, 25% of the Net Fee, such as: it covers virtually all Handling costs (except, Stock Changes where the Online Seller checks, merchandise in and out for in-person, event or other purposes—a $1 fee applies) ; and that things like donations are not a part of the fee structure; Fulfillment Services' fair labor practices and their ethical treatment of employees, clients, vendors, end-customers and the environment; how the Fulfillment Service handles Slow Moving Merchandise; and how the Fulfillment Service assumes some risk for things like returns.

There are details of What's Included in the Fee: shipping labor, customer service labor, designer labor; planning; inventory assessments/management; internally sourced artwork and design; laser printing of labels, invoices and packing slips; envelopes, boxes, padding, tape; phone charges; product design costs; shop design costs; internally sourced photography; day-to-day hold fees; reasonable reporting and accounting costs; and pretty much all fulfillment labor and non-management tasks for the operation of the Online Seller's store!

And, there are details of What's NOT Included in the Fee: printing and manufacture of promotional insert materials; freight and shipping; cost of goods; free-gifts and giveaway items; externally sourced artwork or creative works; fees paid to models; third party transaction fees that might be incurred (if the Online Seller has a store on a site like Amazon); sales and customer acquisition costs (marketing, promotion or advertising); credit card processing; merchant service fees (like: PayPal or Stripe Fees, etc.); and any other third-party expense. Fees for extensive reporting that would normally fall under the purview of the client's store manager. Auditing orders, sales tax form help, Ad hoc inventory and other tasks that are not considered part of fulfillment, rather management. 

Online Seller Returned Goods Policy

Schedule D addresses how, during the normal course of business, the Fulfillment Service will take "good-will" Customer Service actions that might end up costing the Online Seller up to $200, each. These typical losses, are often for: goods lost or damaged in transit; gifts or refunds for customers who've had issues; and for substandard goods. The Fulfillment Company tracks the causes of these losses such as issues with: manufacturers, packing or handling, or online product descriptions.

If possible, customers are cared for in an expedited fashion, and in most cases a replacement or refund is given. Certainly, complete logs exist for all customer interactions, and the Fulfillment Service reports Small Dollar Losses as "Total Returns" on periodic reports unless there exists abnormal issue(s) and then detailed reporting is given. The Online Seller can inspect the logs at any time as they are often attached directly to the order in the admin area of the cart, depending on the Online Sellers's technology.

Online Seller Obligations

Schedule E maps out the obligations of the Online seller, specifically: the Online seller needs to pay for the production of, utilize, and give feedback on Promotional Materials and New Products and Variants designed by the Fulfillment Company, and those services will continue to be provided as long as they have a measurable, significant effect on sales.

The Online Seller pays for: any third-party Online Store fees, the Cost of Goods, any Modeling fees, any Advertising, Promotions and Marketing expenses, Shipping expenses (must provide an Indicia Account with a shipper like the USPS and Stamps.com), Credit Card Processing fees, and all Hosting fees whether with a third-party or gPowerHost (a unit of the Fulfillment Service). The Online Seller's assumed risks—with respect to fulfillment—are commonly for returns or sub-standard goods.

Other responsibilities of the Online Seller include: all In-person and Event Sales (offline sales); reporting stock discrepancies, within 24 hours, when the Online Seller receives goods shipped from the Fulfillment Company; frequently sharing and posting on social media; and in the event of service Cancellation, the Online Seller pays for any freight, boxes and holding expense: a holding expense of $30 per storage shelf per month, or fraction thereof, will be assessed beginning at the moment of service cancellation until shipping back to Online Seller occurs.

Example Calculations

Finally, the Addendum has several sample calculations, and this one shows: a T-shirt sold for $30 (plus shipping) and fulfilled by the Fulfillment Company, with a $10 Cost of Goods:

ASSUMPTIONS:
Cost of Goods = T-shirt cost, as regularly determined, generally, invoice from manufacturer including any freight.
Shipping = From coast-to-coast purchased at Post Office, First Class $5.66, Priority Mail $7.35+.
Customer Price With shipping = First Class $35.66, Priority Mail $37.35+.
Our Fee = 25% of Net Sales ($20 * .25).

 $30.00  Customer Price
-$10.00  Cost of Goods
=======================
 $20.00	 Net Sales
 
 -$5.00  Our Fee
===================
 $15.00  Seller Net