Setup Fee

A one-time charge a supplier bills before your first order, separate from the cost of the product itself.

A setup fee covers a supplier's cost of onboarding a new brand: creating label artwork templates, setting up your account in their system, running an initial production or packaging changeover, or similar one-time work. It is billed once (or occasionally per new SKU) rather than per unit.

Setup fees are one of the most common ways a "no minimum" claim turns out to have a real cost attached. A supplier can honestly have no per-unit order minimum while still requiring a $500 or $1,000 setup fee before your first order ships.

Example

A dropship supplier charges a one-time $750 setup fee to create your custom label template, after which individual orders carry no minimum quantity.

Worth Knowing

Ask whether the setup fee is truly one-time or recurring (e.g. an annual renewal), and whether it's per SKU if you plan to launch more than one product.