What to Look for in a Fulfillment Center Contract

By Martin Vassilev / 8 Aug, 2025

Why Fulfillment Contracts Are Business-Critical

A fulfillment contract defines the entire relationship between your business and your logistics partner. It’s not just a formality — it governs everything from delivery times to liability, inventory handling, returns, and billing. For businesses scaling in a fast-paced environment, vague or restrictive clauses can stunt your growth or lead to financial loss.

Working with a fulfillment partner like ByExpress means full transparency, flexible terms, and reliability built into every clause.

Key Contract Components You Must Scrutinize

1. Clear Service Level Agreements (SLAs)

SLAs are the backbone of fulfillment expectations. They set concrete delivery timelines, accuracy rates, and error resolution protocols. But many contracts bury vague SLAs in the fine print, making it hard to enforce when problems arise.

ByExpress offers real-time order tracking and transparent SLA metrics backed by data, as discussed in our piece on How Real-Time Tracking Is Transforming Logistics in Canada.

2. Transparent Pricing Structures

Many businesses get blindsided by confusing pricing models. Look for:

• Clear storage fees (monthly, per pallet/bin/square foot)

• Pick & pack charges

• Return processing rates

• Minimum monthly billing terms

Unlike competitors, ByExpress provides itemized and predictable billing with no surprise charges — helping businesses reduce warehousing costs without compromising quality (read how).

Liability & Insurance Clauses: Protecting Your Goods

3. Inventory Liability and Damages

Contracts must define who’s responsible for lost, stolen, or damaged goods. Some fulfillment centers pass responsibility to clients once inventory enters their facility, leaving you financially exposed.

At ByExpress, we offer robust insurance coverage and full accountability for inventory within our care — which is especially important for eCommerce brands scaling their operations. Our coverage protects against loss due to fire, theft, and natural disasters.

Technology Integration and Data Access

4. Real-Time Visibility and API Access

In the digital age, you shouldn’t settle for blind fulfillment. Your contract should ensure data transparency, from real-time inventory levels to shipping updates and return statuses.

ByExpress gives clients access to a proprietary dashboard with API integrations tailored to platforms like Shopify and WooCommerce. This is crucial for brands using smart warehousing solutions to improve delivery times.

Customization and Scalability Clauses

5. Volume Flexibility

Your business may see fluctuations — peak season spikes or off-season slowdowns. A rigid contract with inflexible minimums or penalties can cripple growth.

ByExpress offers on-demand warehousing, allowing you to scale storage space and labor needs dynamically. Learn more in our guide on how to scale your business with on-demand warehousing.

Contract Termination and Exit Strategy

6. Exit Terms That Don’t Trap You

Some contracts enforce long-term commitments with harsh penalties for early termination. Others charge exorbitant inventory removal fees or hold your stock hostage.

Your contract should:

• Allow for 30 to 60-day notice termination

• Clearly define return of inventory

• Avoid restocking or inspection charges on exit

With ByExpress, we prioritize partnerships over lock-ins. Our agreements are built with fairness and flexibility so you can make business decisions without contractual fear.

Returns Management and Reverse Logistics

7. Streamlined Returns Processes

Returns are a natural part of eCommerce. But if your fulfillment contract doesn’t specify timelines, processing fees, or how items are handled, it can snowball into customer dissatisfaction.

Our Returns Management System is included in our core offering, with contract-backed SLAs for return inspections, restocking, and notifications — boosting your customer satisfaction and retention.

Customer Service Provisions

8. Who Handles Your Customers?

Will your logistics partner deal with your end customers directly? If so, under what tone, hours of operation, and support protocols? A contract must clarify responsibilities and communication chains.

ByExpress ensures dedicated account managers and a responsive Customer Service Section — giving you peace of mind and better control over your brand’s reputation.

Fulfillment Center Audits and Performance Reviews

9. Performance Metrics and Reviews

Your contract should allow regular performance reviews and operational audits. Are you allowed to request monthly fulfillment accuracy reports? Can you physically inspect the warehouse?

We welcome transparency. ByExpress provides monthly analytics and access to KPI dashboards so your fulfillment never operates in the dark. You stay in control, always.

Two Common Pitfalls to Avoid in Fulfillment Contracts

• Auto-renewal traps: Some contracts silently auto-renew. Always include clauses that require mutual agreement for renewal.

• One-sided indemnity clauses: Avoid language that protects only the fulfillment provider.

Contracts should be mutual partnerships — not one-sided liabilities.

How ByExpress Makes Contracting Seamless

With ByExpress, you get more than a logistics provider — you get a strategic partner. Here’s how we make fulfillment contracting worry-free:

• Clear and detailed contracts — no jargon, no hidden terms

• Scalable fulfillment solutions for growing businesses

• Integrated technology for seamless API and dashboard access

• Transparent billing with predictable monthly costs

• Onboarding guidance and implementation assistance

Whether you’re expanding to Ottawa or scaling globally, our contracts are crafted to align with your growth, not restrict it. Explore how we support your growth in our logistics strategy success stories.

Need Help Reviewing or Negotiating a Fulfillment Contract?

Let our logistics experts at ByExpress walk you through the ideal fulfillment agreement structure. We’ve helped hundreds of Canadian businesses avoid pitfalls and negotiate smarter.

📞 Contact Us today for a free consultation or get a quick quote tailored to your fulfillment needs.

Frequently Asked Questions

1. Why is it important to have clear SLAs in my fulfillment contract?

Clear SLAs ensure your fulfillment provider is accountable for performance metrics like delivery speed, accuracy, and returns handling. Without them, enforcing quality becomes difficult.

2. Can I customize my contract with ByExpress based on my business needs?

Yes. Our contracts are flexible and built to scale with your operations, whether you’re a startup or an enterprise.

3. What happens if I want to end the fulfillment contract early?

We offer fair exit terms with no inventory hostage clauses or hidden penalties. Just a 30-day notice is often enough.

4. Does the contract include technology integration clauses?

Absolutely. We provide real-time dashboards, integrations with Shopify/WooCommerce, and ensure tech accessibility is baked into the contract.

5. How do I ensure I’m not overpaying on fulfillment fees?

Our contracts break down every cost clearly. You can also explore strategies in our article on how to lower fulfillment costs without sacrificing quality.