What share of contribution should storage take?

For most products, low single digits. When storage exceeds 5% of contribution, either the product is too slow-moving or the stock position is too large.

Storage Cost per Unit Calculator

Paid on time held, so cover is everything.

Paid on time held, so cover is everything. Storage is paid on time held, so three months of cover costs three times what one month would.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Total monthly storage cost

Average units stored

Units sold per month

Selling price per unit

Contribution margin

Storage cost per unit sold

$1.200

11.4% of contribution

Cost per unit per month$0.2000

Months of stock held6.0

Storage per unit shipped$1.200

Share of contribution consumed11.4%

Storage is paid on time held, so 6.0 months of stock costs 6.0 times what one month would. Halving stock cover halves the storage cost per unit sold without changing the rate at all.

How the Storage Cost per Unit Calculator works

Storage is paid on time held, so three months of cover costs three times what one month would. Halving stock cover halves the storage cost per unit sold without changing the rate you negotiated at all.

Also known as: storage cost per item · per unit holding cost · cubic feet cost per unit

Allocating a single invoice across a catalogue

Storage arrives as one number: a rent payment or a 3PL invoice. Turning that into a per-SKU cost means allocating it, and the allocation basis decides which products look expensive.

By volume is the defensible default. Each SKU consumes cubic space, and space is what you pay for. Allocating by unit count instead penalises small items and lets bulky ones ride free, which is exactly backwards for the decision you are trying to make.

By value is the basis to avoid despite being the easiest. It implies expensive items cost more to store, which is untrue and produces perverse conclusions: a small high-value item gets loaded with storage cost it does not consume, and a cheap bulky one looks efficient.

Working the calculation through

Total monthly storage cost, divided by total cubic metres stored, gives a rate per cubic metre per month. Multiply each SKU's unit volume by that rate for a monthly cost per unit. Multiply by average months held for the cost embedded in each unit sold.

An example. £2,400 monthly all-in storage cost across 180 cubic metres is £13.33 per cubic metre per month. A product occupying 0.004 cubic metres per unit carries 5.3p per month. Held for three months on average, that is 16p per unit sold.

The step people skip is the average holding period, and it is the one that varies most between SKUs. Two products of identical size can carry storage costs an order of magnitude apart purely on turn, and until you multiply by holding period you cannot see it.

Where the number changes a decision

The clearest use is minimum order quantity. A supplier offering a better unit price at 5,000 units instead of 1,000 is offering a saving that has to be weighed against four times the storage and four times the holding period. On bulky low-margin goods the discount frequently loses.

Second, it prices bundling. Combining slow items with fast ones moves the slow stock and releases space, and knowing what the space is worth tells you how much discount the bundle can carry before it stops being worthwhile.

Third, it settles the range question. A SKU with a 40% gross margin, storage costs consuming 8% of it, and a slow turn may be earning less than a lower-margin item that moves. Catalogue decisions made on gross margin alone systematically favour the wrong products, and this is the correction.

Amazon's storage fees as a special case

FBA storage is charged per cubic foot per month at rates that change seasonally, with the fourth quarter substantially higher than the rest of the year. Anyone modelling FBA costs on the standard rate is understating the peak by a wide margin.

Long-term storage fees are the sharper edge. Inventory held beyond a threshold attracts an additional charge that escalates, and it is deliberately punitive because the intent is to stop sellers using Amazon as a warehouse. Slow-moving stock in FBA can accumulate fees exceeding the value of the goods, at which point disposal is the rational choice and sellers routinely leave it too late.

The practical response is to model FBA storage per unit per month against expected sell-through before sending anything in, and to set a removal trigger based on days of cover rather than on noticing the fee. The fee arrives after the damage is done.

Cutting the cost rather than the space

Packaging is the first place to look because it is the cheapest to change. A carton with 20% wasted air costs 20% more to store and to ship. Reducing carton size on a high-volume line reduces both, and the packaging change usually pays for itself within a run.

Then storage method. Small parts in bins on shelving store at a fraction of the cost per unit of the same parts in cartons on pallets. Slow-moving stock stacked densely in a back corner costs less than the same stock in a pick face.

Then the stock itself. The largest storage saving available in most businesses is holding less, and the way to hold less without stocking out is better forecasting and shorter lead times rather than optimism. Which is why storage cost per unit and inventory turn belong in the same conversation, and are usually owned by different people.

Where to go next

The Storage Cost per Unit question rarely arrives on its own. These are the ones that usually come with it:

Storage Days Cost Calculator — Physical storage is the smallest part.
Warehouse Storage Cost Calculator — Rent per square foot is the smaller half.
Inventory Turnover Calculator — How many times a year your stock sells through.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.

Frequently asked questions

How do I calculate storage cost per unit?

Monthly storage cost divided by units stored gives the monthly rate; multiplying by months of cover gives the cost per unit actually sold.

Why does cover matter more than the rate?

Because the rate is roughly fixed and the cover is under your control. Cutting cover from three months to two saves a third of the storage cost per unit immediately.