Value Added Services

What are Value Added Services?

Value Added Services – or VAS for short – refer to customer-specific value-added activities that a logistics service provider or an internal warehouse performs in addition to the core services of goods receipt, storage, picking, and shipping. The term is not standardized; what qualifies as VAS depends on the respective service provider and contract. In essence, these are activities that take place directly on the goods or their packaging and create tangible added value for the recipient or the downstream process.

Typical service types in practice

The spectrum ranges from simple handling tasks to near-production activities:

• Labeling and marking: Applying price, EAN, or country-specific labels that are missing from the manufacturer or need to be adapted for individual markets.
• Kitting and set assembly: Combining multiple individual items into a retail-ready set or bundle, for example for promotions or e-commerce bundles.
• Repackaging and repacking: Replacing transport packaging with retail-ready or gift-ready packaging, often combined with padding and inserts.
• Quality inspection and control: Visual or functional checks based on defined inspection criteria, for example for returns or imported goods without a manufacturer certificate.
• Returns processing: Inspection, cleaning, re-grading, and where necessary repackaging of returned items so they can be resold as new or grade-B goods.
• Personalization and co-packing: Printing, engraving, or inserting personalized documents, such as gift cards or custom inserts.

Key considerations for planning and procurement

VAS are often underestimated in logistics planning because they combine fluctuating volumes, irregular demand, and high handling effort. When selecting a service provider or planning internal capacity, the following points should be clarified: First, whether services are billed on a standardized or project basis – both have implications for planning reliability and price stability. Second, how time, materials, and waste are captured in billing; opaque billing units are a common cause of cost overruns. Third, what quality records and inspection reports the service provider supplies, since VAS are frequently compliance-relevant – for example with imported goods or in regulated environments. Fourth, the WMS or ERP must be capable of capturing VAS activities at order and item level so that costs and quality remain traceable. Not all systems map VAS orders at a granular level, which can lead to a lack of transparency in cost-to-serve. Whether a vendor classifies certain VAS as a standard service or a special order is often a matter of negotiation and should be explicitly governed in the SLA.