A Guide to 3PL Warehouse Costs

Did you know that there are over three-quarters of a million people employed in the third-party logistics industry in the United States? This industry is extremely important and has become more important in recent years. Using a 3PL company as a business owner has a lot of benefits.

However, you may be wondering what warehouse pricing would look like for your business. What are 3PL warehouse costs? Does using a business warehouse through a 3PL company actually benefit you? Read on to learn all the answers to these questions and more!

What Is a 3PL?

3PL stands for third-party logistics. This refers to a type of outsourcing of commerce logistics to a third-party business. This could include tasks such as inventory management, warehousing, and fulfillment processes. The point of doing this is to allow the e-commerce businesses to accomplish more in their day-to-day rather than needing to cross off all of these other mundane tasks. Instead, a 3PL company can do it for them.

In recent years, 3PL companies have expanded many of their services as the popularity of them has increased. Many include the integration of warehousing operations and transport services as part of 3PL.

What Is the Warehousing Part of 3PL?

The warehousing portion of the third-party logistics process happens after inventory is received. The third-party logistics company will store the items in the fulfillment centers (which are also known as warehouses).

Because there are going to be multiple items, each SKU has different storage locations—whether it is in a self, a bin, or on a pallet.

Depending on your business, you want to work with a warehouse that has enough space for all of your inventory needs. This is especially true if you feel that your volume is going to grow as a business. You want the third-party logistics company to be able to grow with you.

Benefits of 3PL Warehouses

Since you are going to have to pay for a 3PL warehouse, you may be wondering what the benefits of using one are. The good news is that there are plenty of benefits of 3PL warehouses!

For starters, 3PL companies often own their own facility and equipment where they will be storing your inventory. Most also keep a large number of employees on the premise to handle all of the inventory, especially during peak seasons.

Cost-Sharing

Many warehouses utilize economies of scale as well because it comes at a lower cost. Not only can the 3PL company benefit from this, but your business can as well because you don’t need to own your own warehouse. This reduces your own operating costs as a business.

Cost Savings

Third-party logistics companies have a lot more contacts than you may have with freight companies and other shippers. Because they are constantly working with customers and businesses that need shipping, they will likely have discounts on shipping costs based on volume and order frequency with that company. By using a 3PL company that is utilizing these relationships, you can benefit as a business through this as well.

Saving money on shipping costs can make a huge difference in what you can do with your budget for other parts of your business operations!

Scalability

There are going to be a lot of fluctuations in demand in your business inventory throughout the year. There will be some seasons that are busier than others.

3PL companies can help with this. When utilizing 3PL companies, you do not have to commit to a certain capital as a business. By using warehouse space, you are more stable in what you have as a business with your supply.

Enhanced Customer Experience

When using 3PL providers, they pride themselves on fast shipping. This means that as a business, you are going to increase your reputation for how quickly you can turn around products to customers if you use a 3PL company and warehouse. There’s nothing better than improving your reputation with your customers.

Mitigate Risk

There are a lot of different risks that businesses face.

Luckily, when you use a third-party logistics company, they will take on some of that responsibility for you. This includes delays in shipments if there is one. This is beneficial for your business if you are new to the shipping industry and are not sure how it all works. Delays can happen frequently, so taking that stress off of your own shoulders can be beneficial for the success of your business.

3PL Warehouse Costs

The cost of 3PL warehousing is going to differ based on your specific needs as a business.

Typically, it is going to be based on cubic feet. A warehouse company may also charge based on a specific fee per bin or per square footage. Luckily, public warehousing allows for pricing diversity as storage can be assessed by multiple measures. That is how we do it here at Quality Warehouse & Distribution Co.

Warehouse Pricing and More

Are you convinced that as a business owner, you should be using a business warehouse for your extra inventory? There are so many reasons to use a 3PL company. Now that you know the typical 3PL warehouse costs, you may be ready to get started. If you are curious, you can get a quote today from Quality Warehouse & Distribution Co. With over 40 years of experience in public warehousing and freight transportation and more, we can meet your needs in a heartbeat.