3PL Pricing Model: How Much Can 3PL Cost?
- 07/11/2022
- Philip K
Are you looking for third-party logistics partners and feeling overwhelmed trying to compare prices for each? Well. It’s not too late to dig into the 3PL pricing model, which will give you more clarity on how to calculate your 3PL costs.
But different 3pl providers have different pricing models. Therefore, it is also difficult for you to calculate the cost of each.
That’s why we created this page. No matter how different their pricing models are, you just need to know what fees are included in the usual 3pl pricing. And then choose the most suitable model for your e-commerce business according to the services you need.
What is 3PL and 3PL Pricing?
Third-party logistics (3PL) refers to the enterprise entrusting its own logistics activities to the professional logistics service provider through contract. At the same time, it keeps close contact with the logistics service providers through information systems long term.
3PLs generally provide a variety of services including procurement, fulfillment (including receiving, picking, packing, shipping), warehouse management, returns management, etc.
You need to pay the corresponding fee for these services provided by the 3pl provider. That is the cost of your 3pl. This cost depends on what services you need. In addition to the general services mentioned above, they also offer upgrades such as custom branding and kitting (assembled items). Meanwhile, the cost also depends on your order quantity. The larger the order quantity, the lower the cost.
Because each 3PL provider has different pricing, and there is no one-size-fits-all solution for calculating 3PL costs. So we have listed the typical fees for 3pl pricing, read on.
Typical 3PL Service Fees
3PL fulfillment costs are related to the 3PL and distribution center you work with and their pricing model, but typical fees can be grouped into the following:
This is a one-time onboarding fee charged to you by the 3pl company. Depending on the size of your eCommerce business, decide how much to charge. The average is about $550 but ranges from a hundred to a few thousand dollars for small to larger ones.
Typically billed as a one-time fee. Costs range from $100 to $1,000. Includes software, infrastructure development, and integration of your online store with the 3pl’s warehouse management system.
It is a recurring fee that includes account management activities required for your eCommerce business account. These usually run around $35 per month.
Refers to the labor cost of receiving your inventory.
Usually calculated using an hourly rate, ranging from $20 to $50 per hour. Or charge by the piece, which is $5 to $15 per pallet, or $0.25 per item.
Refers to the fee you pay to have your product placed in their warehouse. The fee you pay to store your inventory in a 3PL fulfillment center. Most 3PLs will charge either a flat rate per pallet or based on the square or cubic feet your product takes up.
Pick and pack fees are also known as order fulfillment charges. Many providers typically charge by the hour or by the piece. Bulk discounts can be negotiated if you are shipping multiple items.
Typically B2C merchants typically have an average price of less than $3 for a single-item package, while B2B customers pay around $3.75.
Some 3pl offer custom packaging services. If you have this demand, you will pay extra for the material cost of using these custom-branded packaging. This cost depends on the package size and custom metrics.
Kitting generally refers to assembling multiple SKUs. The needs of each customer are different, so the package fee may vary.
Refers to the international shipping costs required to transport your goods anywhere in the world.
The freight cost is related to the transportation company you choose, the transportation distance, the volume weight of the transported goods, and the transportation time. For example, FedEx will be cheaper than UPS.
Of course, you can choose your own carrier or directly use your 3PL cooperative carrier.
Using your own shipping gives you more control over your business. But the shipping rates listed by the 3PL can give you a higher discount. Because a 3pl provider helps you to select and negotiate the best price from different operators that he works with.
The cost of processing your customer’s return. Not all 3pl offer returns. Return charges may include return shipping and a handling fee of approximately $1 to $3.50.
Pricing Moder for 3PLs
Pros: It’s easy to track and budget your storage costs and you know exactly how much the service costs each month.
Cons: It can result in higher rates than variable pricing models, depending on the services your company uses.
Pros: May charge less.
Cons: The total cost per cubic foot is more expensive under the fixed pricing model.
Honest FulPhilment’s 3PL pricing explained
One of the most daunting aspects of third-party logistics (3PL) is the hidden charges and complicated pricing structures that companies offer.
That’s why Honest FulPhilment only has two fees for our 3PL service. A packing fee and a shipping cost. These 2 costs also apply to all of our 17 3PL warehouses around the world. Check out our pricing page for more details.
You can create an account in Honest FulPhilment and add money to your account. We will check the performance fees with you per month. Make your fulfillment fees more transparent.
Conclusion
You should feel that more and more eCommerce companies are choosing 3PL. Your company is also a good fit for a 3PL. This is a great source of cost savings for your eCommerce business in the long run.
But before deciding to choose a 3PL company, make sure you understand the cost of a 3PL. You can contact Honest FulPhilment now for a free quote. Outsource supply chain management to Honest FulPhilment, and you can rest assured of any potential hidden costs. We will get it back to you at a transparent price.
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