Your warehouse wage bill went up again last quarter. More casuals, more overtime, more agency temps on peak days. But when a customer asks you to quote storage-and-pick for a new contract, you’re still guessing. You know labour is your biggest controllable cost, and you still can’t tell anyone what it costs you to pick, pack and dispatch a single order.
The Symptom: Labour Grows but the Unit Economics Stay Dark
You added three casuals last month. Throughput went up. But so did errors, re-picks, and the time your ops manager spends supervising instead of planning. The wage line in your P&L is a single lump. It tells you what you spent. It tells you nothing about what you got for it. You cannot see cost-per-pick, cost-per-order, or cost-per-line-item. So when a 3PL prospect asks for a per-unit rate, you do what everyone does — you look at what competitors charge, add a margin that feels right, and hope. That is not pricing. That is guessing with a spreadsheet open. A warehousing CFO Perth engagement starts by breaking that wage lump into activity-based components so every dollar of labour has a destination and a return.
What Is Actually Happening Underneath
Labour in a warehouse is not one cost. It is several. Receiving. Put-away. Replenishment. Picking. Packing. Dispatch. Returns. Each activity consumes a different amount of time per unit, varies by SKU profile, and shifts with order complexity. When you treat it as one number, you hide the fact that some customers cost you three times more to serve than others. That B2B pallet-out client with clean orders might be subsidising the e-commerce account that sends fifty single-pick orders a day, each needing individual packing and a returns label. You feel it in fatigue and overtime but you cannot see it in your financials. The information exists — in your WMS logs, your timesheets, your roster patterns — but nobody has built the model that connects hours worked to units moved to revenue earned.
Building the Cost-Per-Pick Model That Changes Your Pricing
A virtual CFO Perth builds this model by mapping labour hours to warehouse activities, then dividing by throughput. It is not academic. You pull roster data, WMS pick counts, and despatch records for the same period. You allocate hours by zone or function. You calculate a loaded labour cost — wages plus super plus WorkCover plus agency margin — per productive hour. Then you divide by units handled at each stage. The result is a real cost-per-pick, per-line, per-order. Now you can see that your average pick costs you $1.14 but your worst customer’s picks cost $2.60 because of split cartons and high SKU variety. Now you can reprice. Or renegotiate. Or redesign the pick path. The point is you are making decisions from data, not from a feeling that wages are too high.
From Guessing Rates to Quoting with Confidence
Once the unit cost model exists, everything downstream sharpens. You quote new 3PL contracts with margin built in at the activity level, not estimated on a napkin. You measure labour productivity week to week and spot when it drops before the overtime bill tells you. You decide whether a new automation investment — a conveyor, a pick-to-light system — actually pays back against your real labour rate, not a vendor’s inflated assumptions. This is the work 360 Fox does as a warehousing CFO Perth partner. We sit inside your numbers, connect your WMS and roster data to a financial model, and give you a cost-per-unit figure you can actually trust. Not a report you file. A tool you use every time you price a contract, approve a roster, or evaluate whether that next casual is earning their keep or just adding to the blur.
Your warehouse runs on people. Your pricing should run on what those people actually cost you per unit moved. If you cannot answer that question today, that is the gap worth closing first.
Want eyes on your numbers before the next big decision? 360 Fox is a boutique CFO practice for owner-led businesses in logistics, importing, warehousing, distribution, manufacturing and trading. Book a chat.