How to Compare 3PL Quotes When Every 3PL Prices Differently

A food brand walked me through their last Amazon prep job last week.

The rate was $2.00 a case to pick and label. Then came $20 a pallet to build and wrap, $20 a pallet to swap onto standard pallets, and $0.30 for every extra sticker. On a 3,804-case shipment, the total came to about $8,960, and payment was due before the pallets left the building.

That's $2.36 a case, about 18 percent above the headline rate. None of those fees is unusual. But if you were comparing 3PLs on the $2.00, you were comparing the wrong number.

That's the whole problem with 3PL quotes. Each one can be accurate on its own terms, and none of them line up.

Why 3PL quotes don't compare

Every 3PL builds its proposal on its own billing model. Put five side by side and you're not looking at five prices for the same thing. You're looking at five different ways of charging for your business.

The usual differences:

• Pick fees. One charges per order including the first unit, another per unit, another per pick line. Some include up to three units, some charge for every one after the first.
• Storage. Per pallet, per bin, per shelf, or per cubic foot. Billed on a month-end snapshot, your peak for the month, a daily average, or twice a month. Same inventory, very different bills.
• Receiving. Per container, per pallet, per carton, per unit, or per labor hour. Floor-loaded containers often cost more than palletized ones, and some quotes only show the palletized rate.
• Packaging. Included in the pick fee, billed per box, or passed through at cost plus a markup.
• Shipping. Their negotiated rates, your own carrier accounts, or their rates with a markup you can't see.
• Minimums. A monthly minimum, a minimum per order, or a minimum storage charge. Usually not on the first page.
• Everything else. Account management, integration, setup, onboarding, returns, kitting, labeling, special projects. Some quotes list 6 line items. Some list 40.

So the rate card that looks cheapest often isn't the cheapest invoice. You only find out by running your own numbers through every quote.

How to compare 3PL quotes, step by step

1. Build one real month of your business

Pick a normal recent month and pull the actual numbers:

• Orders, and units per order (the average and the spread)
• SKUs that moved
• Pallets or bins on hand, on average and at the peak of the month
• What came in: containers, pallets, cartons, and how they were loaded
• Returns
• Package sizes and weights, and where your customers are

If you're early and don't have history, use your honest forecast, not your hopeful one. A 3PL once priced a brand at its stated 3,000 orders a month. The first three months came in at 1,100, 900, and 1,050. A quote built on a fantasy volume is a fantasy quote.

2. Put every quote on the same line items

Make one sheet with the same rows for every provider. If a 3PL won't break its pricing out into your rows, that tells you something too.

Our 3PL glossary covers what each of these terms means on a quote.

3. Run your real month through every quote

Multiply it out. Get a total monthly cost for each provider and divide by orders. That's your all-in cost per order, and it's the only number worth ranking on.

4. Run it again at half volume and at peak

A quote that wins at your normal volume can lose badly in a slow month, because that's when minimums kick in. And a quote that bills storage on your peak inventory looks fine in March and hurts in November.

5. Find the line that runs your bill

Most brands negotiate the pick fee because it's the number on the first page. It often isn't the number that matters.

I went through three months of invoices for a furniture brand this month. Storage was 68 percent of the bill. A great pick fee would have saved them almost nothing. A better storage rate, or a 3PL that bills storage the way their inventory actually moves, would have changed the whole month.

Once your real month is in the sheet, it's obvious which line to negotiate. For storage specifically, our guide to per-pallet rates and the fees behind them goes deeper.

6. Compare shipping separately

Postage is usually the biggest number on the invoice, and it's driven by where the warehouse sits relative to your customers, your package sizes, and whose carrier rates you're on. Ask each provider to rate a sample of your real orders, by zone, from the facility that would actually hold your inventory. Don't let a cheap fulfillment rate hide an expensive shipping lane.

7. Ask about what isn't on the sheet

Before you pick a winner, get these answers in writing:

• What's the full accessorial list, and which fees can change during the contract?
• Is there a monthly minimum, and when does it start?
• How is storage billed: snapshot, peak, daily, or on a 30-day anniversary cycle from your first receipt?
• When are invoices due, and is any work prepaid before inventory is released?
• What do setup, onboarding, and integration cost, one time?
• What does it cost to leave: final pick, pallet build, and loading?

A worked example

Here's a simplified example with made-up round numbers, to show how the order can flip. Say you ship 1,000 orders a month at 1.5 units per order, average 60 pallets in storage with a peak of 80, and receive two 20-pallet containers a month.

The slow month assumes 500 orders, 40 pallets on average with a peak of 55, and one container.

Provider A has the best pick fee and the worst invoice. Provider C has the worst pick fee and the best invoice. And in a slow month, A's minimum takes over and the gap gets wider.

Real quotes are messier than this, but the pattern holds. We ran an RFQ for a big-and-bulky brand where five providers quoted, and the provider that looked cheapest on the first pass wasn't the cheapest once we modeled the brand's real inbound volume of about five containers a month.

Red flags in a 3PL quote

• A quote that came back fast with no questions about how your inventory arrives
• A rate card in place of your template, and no willingness to fill yours in
• Storage with no billing basis stated
• "Market rate" or "cost plus" with no number next to it
• A monthly minimum you only found on page four
• Fees that can change mid-contract with short notice
• Payment required before inventory is released, with no credit terms after onboarding

Frequently asked questions

How do I compare 3PL quotes? Put every quote on the same line items, run one real month of your orders, inventory, and inbound through each one, and compare the total cost per order. Then rerun it at half volume and at peak, and compare shipping separately by zone.

How much does a 3PL cost per order? It depends on your units per order, inventory, inbound, and packaging far more than on any single rate. That's why two brands with the same order volume can see very different bills from the same 3PL. Our fulfillment cost calculator gives you a range to sanity-check quotes against.

Why is my 3PL invoice higher than the quote? Usually because the quote showed the headline rates and your invoice includes everything else: receiving on your real inbound, storage on the provider's billing basis, packaging, accessorials, and minimums. Running your real month through the quote before signing catches most of it.

Where can I compare fulfillment fees before choosing a provider? You can request quotes from providers directly and build the comparison yourself with the steps above, or use a matchmaker that normalizes quotes for you. Our 3PL RFQ guide covers how to request quotes that come back comparable in the first place.

Should I pick the cheapest 3PL quote? Pick the cheapest all-in cost among the providers that actually fit your product and channels. The cheapest quote from a provider that can't handle your product isn't cheap. Our guide on how to choose a 3PL covers the fit side.

Want the comparison done for you?

This is most of what we do. We shortlist providers on operational fit, send them the same brief, rebuild every quote on the same line items, and model it against your real order history before you get on a call. Providers pay our fee. Brands put down a refundable deposit so we only take on serious searches, and when you sign, we pass it to your 3PL as a credit on your first invoice.

Tell us what you ship, and send the quotes you already have. We'll tell you what they actually cost.