3PL Pricing Pitfalls to Avoid

We wish it werent the case, but unfortunately most 3PL companies arent fully transparent and straightforward when it comes to.  Fortunately, weve compiled a list of a handful of things to watch out for when comparing the rates of different companies.

It would be extremely easy to compare different options if all companies presented their pricing the same way. Unfortunately, almost all companies will use different pricing models. This makes it almost impossible to do an apples to apples comparison. We recommend that you take the power back by asking each 3PL company to provide you a what if analysis. Basically, in addition to their proposal, ask them to provide you with a mock invoice using certain assumptions about an average month for your business. This way, youll get a fully loaded price from each of the vendors, which makes comparison shopping easy.

Weve seen it happen all too often a 3PL firm provides a company a quote with only a couple of fees all of which are extremely low versus the competition. This is what we refer to in the industry as the shell game. Many times 3PLs will try to gain a pricing advantage by giving you a couple of low rates (especially pick and pack fees), only to later charge you much higher rates in other areas after you commit to working with them. One of the most common areas where they hide fees are in the difficult to measure shipping costs. Ask for specific3PL pricingto uncover any discrepancies.

We help many companies each month that ended up choosing a fulfillment company only to find that once they starting using the services, their bill was much higher than anticipated. Come to find out, they werent shown every pricethey might potentially incur. So when they got their invoice, which was a mile long, all of these miscellaneous charges added up to a hefty bill. Make sure that you have each company provide you a complete listing of all 3PL pricing.

Ultimately, this is one of the biggest reasons that we exist to help you answer questions about the different alternatives and to get you FREE price quotes from multiple 3PL companies so that you can make the best decision for your organization.

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