Fulfillment Service Costs: 3PL Warehousing Fees & Pricing

Since 2017, we’ve conducted one of the longest-standing warehouse pricing surveys in the industry, gathering data from over 600 warehouses each year. The survey includes 62 questions focused on warehousing costs, pricing, and performance metrics. This data gives you a clear understanding of fulfillment cost, helping your business stay competitive and helping you secure the best rates.

What You Pay for 3PL Fulfillment Services

What You Pay When Applying Volume Discounts

Fulfillment providers offer discounts based on the volume of orders, storage, and shipping. Here’s how discounts typically break down:

Many providers offer contract incentives for locking in longer terms, such as yearly or multi-year agreements. This is beneficial for businesses as 72% of fulfillment companies reportedly increase prices annually, with average increases ranging from 3-7%.

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At WarehousingAndFulfillment.com, we specialize in connecting you with trusted and cost-effective 3PL providers. Fill out our form or contact us today to get started.

Most Common 3PL Costs: What You’ll Pay Most Often

When partnering with a third-party logistics (3PL) provider, many warehouses and fulfillment centers use activity-based pricing. This means warehouse operators or fulfillment providers charge businesses for each specific service or “activity” they perform on behalf of the business. Typically, the 3PL provider will total up the activities they’ve completed for your business over the course of the month and issue a monthly invoice, though some may bill more frequently, like bi-monthly.

If you’re a business looking for fulfillment services, here are the main fees you’ll likely encounter when working with a 3PL:

• Initial Set-Up Fees: Charges for onboarding and system integration.
• Receiving Fees: Fees for processing and handling inbound inventory.
• Amazon FBA Fees: Charges for services like labeling, preparation, and storage.
• Storage & Warehouse Fees: Costs for storing goods in the warehouse.
• Fulfillment or “Pick and Pack” Fees: Charges for picking items from inventory and packaging them for shipping.
• Inbound Shipping Fees: Cost of sending product from supplier/manufacturer to the fulfillment center.
• Outbound Shipping Fees: The cost to send the products to your end customers.

1. Initial Set-Up Fees:

The cost of integrating with a 3PL varies depending on the complexity of the setup. Basic integrations like web store connections or EDI setups typically range from $150 to $1,500, with more complex systems costing even more. Be aware that some 3PLs may also charge recurring monthly fees for system maintenance, ranging from $10 to $500.

• Range: $150 – $1,500 (higher for complex integrations).
• Average: $385.
• Recurring Fees: Monthly maintenance costs range from $10 to $500 (average: $198).

2. Receiving Fees:

Receiving is one of the first line items where costs may add up. This includes the time spent counting, inspecting, and labeling goods as well as storing them in the 3PL’s facility. Handling discrepancies, like damaged or incorrect shipments, can also lead to additional charges, so knowing how these are addressed can help avoid future costs. Access to real-time inventory updates is helpful but often comes at a premium.

3. Storage & Warehouse Fees:

Storage fees can quickly inflate your costs, especially depending on how the 3PL charges—by pallet, square footage, or cubic footage. Knowing how inventory is counted (daily, weekly, or monthly) also plays a role in managing costs, as inaccurate counts can lead to higher charges. Understanding this structure will help control unnecessary fees.

• Pallet Storage: $8 – $40 per pallet per month (average: $20.37).
• Cubic Foot Storage: $0.45 – $0.55 per cubic foot.
• Bin Storage: $2.67 per bin per month (average).
• Specialized Storage: Climate-controlled storage adds a 40-75% premium, typically $25 – $35 per pallet per month.

4. Amazon FBA Fees

Amazon FBA fees often surprise businesses, with costs piling up for required services like labeling, SKU preparation, and storage. Planning for these expenses in advance can prevent overages and unnecessary spending, especially when dealing with high SKU counts.

• Amazon Labeling Fee: $0.45 per label.
• SKU Preparation: $0.20 per SKU.
• Order Preparation: $2.50 – $3.20 per order.

5. Fulfillment or “Pick and Pack” Fees:

Fulfillment fees can vary widely and may hide additional costs if you don’t get a clear breakdown upfront. Some 3PLs offer low order fees but offset that with higher packaging or handling charges. Make sure to confirm who covers the cost of boxes and packaging to avoid surprise expenses later.

• Average Order Fee: $3.18 for B2C orders, $4.79 for B2B orders.
• Per Item Fee: $0.68 per item (in addition to the order fee).
• Packaging Fees: Often marked up by 10-20% on box costs (average: $1.19 per box).
• Order Insert Fee: $0.15 – $0.40 per order (average: $0.25).

6. Inbound Shipping Fees

Inbound shipping fees cover the cost of getting products from your supplier to the 3PL’s warehouse. Many 3PLs have negotiated discounts with carriers, but you need to ask how these savings are passed on to you. Comparing the 3PL’s rates with what you would pay independently is a good way to assess whether you’re getting a fair deal.

• Rate Models: Discounted rates may be available through the 3PL’s carrier relationships.
• International Shipments: May include freight forwarding services, customs clearance, and drayage.
• Domestic Shipments: Options include small parcel, LTL (less-than-truckload), or FTL (full truckload).

7. Outbound Shipping Fees

Outbound shipping fees cover the cost of sending products to your customers. While 3PLs often get better rates through their existing carrier relationships, it’s important to confirm if these savings are fully passed on to you. Ask for a detailed breakdown of per-shipment costs and watch out for hidden fees, particularly with international shipments.

• Discount Models: 35% of 3PLs offer a discount off published rates. 65% of 3PLs use cost-plus pricing, where they add a percentage markup to their shipping costs.
• Volume Discounts: LTL (less-than-truckload) and truckload shipments can receive discounts of up to 45-60%.
• Additional Fees: Some 3PLs charge an extra $1.00 to $3.00 per order if you choose to use your own shipping account.

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Less Common 3PL Costs: What You’ll Pay

Working with a 3PL can also involve occasional fees that aren’t part of your regular expenses. These costs can still impact your budget, so it’s important to plan for them accordingly.

• Box Fees: Charges for packaging materials like boxes, which are typically not included in fulfillment fees.
• Order Insert Fees: Fees for adding items like promotional materials or invoices into customer orders.
• Return Fees: Costs for handling returned items, including inspection and restocking.
• Kitting Fees (Subscription Boxes): Fees for assembling multiple products into a single package.
• Account Management Fees: Charges for ongoing account oversight and support from the 3PL provider.
• Call Center Services Fees: Costs for handling customer inquiries related to orders and shipping through the 3PL’s call center.

8. Box Fees

Box fees are typically charged separately from fulfillment services, and depending on the size, material, and frequency of your shipments, they can amount and add to your costs. Some 3PLs might offer discounts for bulk box purchases, while others may apply a markup. Clarify whether these charges are passed through directly or come with an additional margin.

• Box Fee Range: $0.25 – $2.50+ per box.
• Survey Insight: 71% of fulfillment providers charge for boxes separately.
• Consideration: Larger or custom-sized boxes can drive up costs, so ensure you account for this when calculating total shipping expenses.

9. Order Insert Fees

Order insert fees cover the cost of adding extra materials like invoices, promotional inserts, or instructions into customer orders. Though individually small, these fees can add up quickly, particularly for high-volume businesses. Each extra step in the fulfillment process—whether it’s adding a label or shrink-wrapping—comes with an additional cost, so factor this into your fulfillment budget if you plan to use inserts frequently.

• Average Insert Fee: $0.25 per insert.
• Labeling Costs: $0.05 per label.
• Shrink Wrapping: $41 per hour or $5.50 per pallet.

10. Return Fees

Handling returns often includes inspection, restocking, and sometimes repackaging, which drives up costs. Returns are labor-intensive, and fees can vary based on how complex the return process is. For businesses with high return rates, these fees can quickly add up, so you MUST understand how your 3PL manages returns and whether any parts of the process can be automated to reduce costs.

• Average Return Fee: $3.95 per item.
• Consideration: Returns that require additional steps like repackaging or repairs may incur higher fees, so be sure to understand how returns are handled for your specific products.

11. Kitting Fees: Subscription Boxes

Kitting, or assembling multiple items into a single package, is often necessary for businesses offering subscription boxes or gift sets. Since this process requires extra labor, kitting fees are typically charged by the hour. For businesses that frequently bundle products, these costs can accumulate quickly. Make sure to ask your 3PL partner has efficient kitting capabilities to keep costs manageable.

• Average Hourly Rate: $39 per hour.
• Consideration: Complex kits that involve multiple components or custom packaging may increase your costs due to the extra time required for assembly.

12. Account Management Fees

Account management fees cover ongoing oversight and support from your 3PL, such as inventory tracking and performance reviews. These fees can range widely depending on the level of service provided. For businesses with complex needs, paying for more proactive account management may reduce internal strain, but it comes at a higher cost. For smaller businesses, a lower level of support may be sufficient and more cost-effective.

• Range: $30 – $1,000+ per month.
• Average: $236.67 per month.
• Consideration: Determine the level of support you truly need, as higher fees for hands-on management might save you time but increase your overall costs.

13. Call Center Services Fees

Outsourcing customer support through a 3PL’s call center can save internal resources, particularly for e-commerce businesses that deal with a high volume of customer inquiries. However, these services can get expensive, especially if your call volume is high or you have long call durations. Evaluate whether the convenience of outsourcing customer service offsets the cost for your business, and look into flat-rate options if your call volumes are consistent.

• Average Rate: $1.19 per minute for inbound customer service.
• Consideration: High call volumes or longer call durations can significantly increase costs, so weigh the benefits against the potential expense.

Cost Summary

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At WarehousingAndFulfillment.com, we specialize in connecting you with trusted and cost-effective 3PL providers. Fill out our form or contact us today to get started.

3PL Cost Survey Results: 2016 to 2024

• Cost per Square Foot: Warehousing costs per square foot show a consistent upward trend, from $6.53 in 2017 to $8.31 in 2024.
• Storage & Warehouse Fees (Per Pallet): The cost of pallet storage has more than doubled, from $9.62 in 2016 to $20.37 in 2024, reflecting the increasing scarcity of warehouse space. Businesses should be prepared for continued price hikes due to growing storage demand.
• Pick and Pack Fees (B2C): Prices for B2C fulfillment show moderate increases, from $2.64 in 2017 to $3.18 in 2024. This stability offers predictability for businesses with high B2C order volumes.
• Pick and Pack Fees (B2B): B2B fulfillment costs have risen more sharply, from $3.74 in 2017 to $4.79 in 2024. B2B orders often involve more complexity, which accounts for the higher costs compared to B2C.
• Initial Set-Up Fees: These fees fluctuate from $336 in 2018/2019 to a peak of $550 in 2021. Set-up fees reflect the complexity of onboarding and system integration, meaning businesses with more advanced systems should anticipate higher costs.
• Receiving Fees: Receiving fees rose from $7.65 in 2020 to $8.69 in 2023, with a peak of $10.10 in 2021. The increase is likely due to rising labor and processing costs.
• Return Fees: Return fees vary, reaching a peak of $5.28 in 2021 and 2023. These fees reflect the labor-intensive process of managing returns, including inspection and restocking. Businesses with high return rates should factor in these costs.
• Kitting Fees: Kitting fees, introduced in more recent years, average around $35-$39 per hour. These costs are associated with assembling multiple items into a single package, such as subscription boxes or gift sets.
• Account Management Fees: Account management fees have risen consistently, doubling from $130 in 2020 to $261.80 in 2023. This reflects the growing complexity of ongoing account oversight, inventory tracking, and customer service.

We’ll Help You Find the Best 3PL Prices

At WarehousingAndFulfillment.com, we specialize in connecting you with trusted and cost-effective 3PL providers. Fill out our form or contact us today to get started.

3PL Warehousing Fees & Pricing Frequently Asked Questions

What should I watch for in fulfillment pricing schemes?

Be aware of hidden fees, bait-and-switch tactics, or inflated shipping costs. Always provide your monthly projections and request a sample invoice for transparency.

What is the average 3PL cost as a percentage of gross product sales?

Fulfillment costs vary with product prices. The most efficient companies operate at 8-10% of gross sales, with averages around 10-15%. Higher costs may reach 20% for less automated companies.

How do I compare different warehousing companies’ pricing?

Request a mock invoice with specific assumptions from each 3PL to get an accurate, fully loaded comparison.

How can outsourcing fulfillment save my business money?

Outsourcing reduces costs like rent, labor, and shipping through volume discounts, shared space, and advanced technology, allowing you to focus on growth.

How do I compare in-house fulfillment costs versus outsourcing?

Compare all costs—labor, rent, utilities, insurance, supplies, shipping, and management time—between in-house and outsourced fulfillment to determine the best option for your business.

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