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How 3PLs Can Register for FDA-Approved Warehouse Status

Imagine a spotless warehouse stacked with pallets of potato chips or cases of juice. That’s what people imagine when they think of what “food-grade warehousing” often means: strict cleaning protocols, temperature controls, and temperature-controlled environments for sensitive products, plus intensive audits by certifiers to prove it. Quality control, monitoring, and tracking are indeed essential for maintaining standards in these facilities. But here’s the catch: there’s no official “FDA food-grade certificate.” In other words, no inspector from the FDA comes by and stamps a “food-grade” label on your door. Instead, the FDA regulates facilities by simply requiring them to register if they handle food.

Having food-grade certification is a voluntary, industry-driven quality label. FDA Food Facility Registration, however, is a mandatory legal listing for any business that manufactures, processes, packs, or holds food (including dietary supplements and animal feed) for U.S. consumption. To clarify, an FDA-certified warehouse goes through a more rigorous process of demonstrating a higher level of compliance with FDA regulations, which is voluntary. “Registration,” on the other hand, is a basic requirement for all facilities handling food, essentially notifying the agency about their activities.

In short, having SQF or “organic” or even SQF Level 3 qualification is great for customers and safety, and also supports brand reputation and benefits ecommerce businesses, but it doesn’t exempt you from the law. If your 3PL warehouse stores consumer foods, drinks, pet snacks, or supplements, it must be entered in the FDA’s facility registry, regardless of how clean or certified it is. Companies in various industries, such as food, beverage, and supplements, need to comply with these requirements. An FDA spokesperson bluntly reminds us: any facility holding food for U.S. humans or animals must register, unless a specific exemption applies. This is essential for public health and health protection. For example, proper registration allows for the tracking of an E. coli outbreak back through all the facilities where it was held to identify the source.

If your warehouse or fulfillment center stores food, you must register. The supply chain, logistics, and fulfillment services provided by 3PLs are all impacted by these requirements. The FDA’s own FAQ reminds us, under the act (such as the Food Safety Modernization Act) and drug administration oversight, that registration is not optional.

If you’re a manufacturer, you must register. Appropriate storage conditions and maintained standards are required to ensure compliance. If your core business is storage, the products are stored, and inventory management practices must meet regulatory expectations. If you only ship (no storage), you’re probably exempt. However, management systems and control of inventory are still important for compliance.

Different 3PLs have warehouses that offer a range of services and solutions, and choosing the right partner is important for helping you ship FDA-regulated products efficiently.

When Does a 3PL Warehouse Need to Register?

As soon as your warehouse is holding regulated food or feed for sale in the U.S., it falls under the FDA’s food facility rule. That means if your 3PL stores any packaged foods, beverages, snacks, dietary supplements, or animal feeds (even pet chews) destined for U.S. consumers, you must register with the FDA. Dietary supplements count as “foods” under the law, so a vitamin or protein powder you warehouse still triggers FFR. Same if you handle pet treats or livestock feed, animal feeds can be considered food (or drugs), and holding them for distribution requires registration. In practice, virtually all 3PLs storing consumer food or supplement products will need to register. There’s no minimum volume or frequency, even short-term “holding” qualifies. FDA guidance clarifies: “There is no timeframe associated with holding… a facility that holds food… is not exempt.”

Exemptions: The law does carve out a few narrow exceptions, but they usually don’t apply to commercial 3PLs. Common carrier transportation is exempt (trucks, ships, planes) because vehicles are not considered “facilities”. A Post Office or courier sorting center with packages is likewise viewed as transit, not as a holding facility. Retail grocery outlets and restaurants are also exempt (they’re “retail food establishments”), but an independent warehouse that isn’t part of a store chain doesn’t qualify. Importantly, storage of non-food items (like empty bottles, labels, or packaging materials) is exempt too, since the FDA defines “food” as excluding food-contact materials. In short, if your 3PL’s core business is storage of packaged food/beverage/supplement products, you’re in, otherwise, you’re probably out.

Must register: Facilities manufacturing/processing, packing, or holding food or animal food for U.S. distribution. This includes dietary supplements, snacks, drinks, pet food, feed supplements, etc.
Does not need to register: Pure carriers/transport trucks (no holding activity); retail stores or restaurants; farms holding their own produce; and facilities storing only packaging or non-food items.

Product Triggers: What Counts as “Food”?

The FDA’s definition of food is very broad, and it explicitly includes dietary supplements and many pet products. In practical terms, any finished food or beverage product triggers registration. That means snacks, cereals, bottled water, sodas, juice, nut butters, supplements, infant formula, spices, etc., all count. A helpful FDA Q&A spells it out: “A dietary supplement and a component of a dietary supplement are ‘foods.’ Accordingly, a facility that … holds a dietary supplement … is required to register as a food facility.” Likewise, pet foods and chews must be registered, they’re considered animal food. By contrast, cosmetics, drugs, medical devices, or chemicals do not fall under the food registration rule (they’re regulated by other FDA centers). So, if your warehouse does mixed storage, only the racks holding food/work trigger FFR.

It’s worth double-checking borderline cases. For example, a facility storing bulk sugar or starch used for food probably needs to register, because those ingredients are food. But if a warehouse only holds bottles, jars, or foam peanuts (food-contact materials), that is not “food,” and you wouldn’t register for those alone. Whenever in doubt, recall this rule of thumb: if it can be eaten (or fed to animals), the warehouse holding it likely needs to register.

How to Register (Step-by-Step)

Registering is straightforward and free. Start by getting an FDA Industry Systems (FIS) account at access (FDA calls this portal “FURLS”). Once logged in, choose the Food Facility Registration Module (FFRM) and hit “Register a Food Facility.” The online system will guide you through sections for facility info, contact data, and product categories. A handy user guide on the FDA’s site walks you through each page.

All domestic and foreign registrants must use the electronic system (paper is only allowed by rare waiver). If you do need a paper backup (e.g., in an emergency or with a waiver), the FDA provides Form FDA 3537. This form is available on the FDA’s website and can be mailed or faxed to the FDA’s registration office. However, 99% of businesses just use the online portal; it’s faster and automatically gives you a confirmation.

Information You Must Provide

The registration form (online or 3537) asks for basic data about your facility and operations. In short, be ready with facility identity and contact info, product categories and activities, and key attestations. Specifically, FDA requires: name, address, phone (and emergency contact phone) of the facility; mailing address (if different); any parent company name; all trade names used at the facility. It also needs the name, address, and phone of the owner/operator/agent in charge, plus their email address (unless FDA granted a waiver).

You must also list which types of foods you handle. FDA provides a menu of “food product categories” (36 choices), just check all that apply (e.g., “beverages,” “bakery goods,” “dairy products,” “supplements,” etc.). For each category, indicate whether you manufacture/process, pack, or hold that product. If you hold multiple categories (snacks, drinks, supplements, etc.), you must list them all.

Importantly, you must also include a Unique Facility Identifier (UFI) that FDA recognizes. Currently, the FDA accepts the D-U-N-S (DUNS) number as the UFI. If you have a DUNS number for your company, include it (if not, getting a DUNS is free via Dun & Bradstreet). Just make sure it’s correct; the FDA will verify that the address matches.

Finally, the form includes a couple of statements and signature fields. You must certify that FDA may inspect the facility per law, and that all provided info is true and accurate. The owner/operator (or an authorized representative) signs off on this. If you file electronically, the system will still record your submission and display your unique registration number (FEI) and PIN on screen. In other words, once you click submit, you instantly get your FDA registration number.

(Foreign facilities note: U.S. law requires a U.S.-based agent as well. Foreign registrants must provide the name, address, phone, and email of their U.S. agent contact.)

No Fees or Fancy Licenses

Here’s a relief for ecommerce brands: The FDA does not charge any fee for food facility registration. Domestic facilities pay nothing. (Foreign facilities must hire a U.S. agent, but that’s an independent business service fee, not an FDA fee.) There’s no formal inspection or license process tied to the registration itself; you don’t need an FDA “permit.” The registration simply identifies you in the FDA’s database.

Minimum qualifications: You don’t need a food degree to register. Any business that legitimately handles food (and isn’t otherwise exempt) can register. The key requirements are simple: have a real physical facility or address, designate who the owner/operator is, and be ready to let FDA inspectors in if there’s a problem (FDA will ask for an inspection assurance on the form). Beyond that, you should follow good hygiene/CGMP practices (FDA’s Title 21 CFR Part 117), but those standards aren’t part of the registration. In short, if your 3PL warehouse fits the description above, you can (and must) register; the process doesn’t require extra credentials beyond normal business paperwork.

Timeline: Registration, Renewal, and Expiration

The registration process itself is quick. In practice, if you have all the information ready, you can complete an online registration in less than 20 minutes. Once submitted, the FDA site immediately assigns you a registration number (FEI) and PIN, which appear on-screen. There’s no waiting for mail or manual review. You can email or print your registration form right away. As soon as you’re done, your facility is officially in the system.

But don’t forget renewals! The FDA requires a biennial renewal cycle. That means every two years, you must update or resubmit your registration. In practice, the FDA opens the renewal window from October 1 through December 31 of every even-numbered year (e.g., 2026, 2028, etc.). During that period, you log back into FIS, review your info, make any changes (new address, products, contacts, etc.), and resubmit. After Dec 31, any facility that hasn’t renewed is considered expired.

So mark your calendar: the next renewal window opens October 1 of the next even year. If you register for the first time in an odd-numbered year (say June 2025), you must renew by Dec 31, 2026, to avoid lapsing. FDA will normally send reminders, but it’s best to track this yourself. (And remember: renewals are free too.) If your business goes out of scope or closes, you should also cancel your registration in FIS to avoid future reminders.

Key Requirements & Timelines: At a Glance

Who must register: Any facility manufacturing/processing, packing, or holding food or animal feed for U.S. distribution (snacks, beverages, supplements, pet food).
Who is exempt: Pure carriers (trucks, ships) in transit; retail stores and restaurants; farms holding their own produce; facilities storing only non-food items.
How to register: Online via FDA’s FIS portal (FURLS Food Facility Registration Module); paper only by FDA waiver.
Information needed: Facility/contact details; food categories and activities; Unique Facility Identifier; attestations and signature.
Timeline: Instant registration upon online submission; biennial renewal October 1 – December 31 of even years; expiration if not renewed.
Fees: There is no FDA fee for domestic registration or renewal. (Foreign firms only pay for their required U.S. agent service.)
Duration: Each registration lasts until the next biennial renewal period (essentially 2 years). After renewing, you’ll receive a new registration confirmation for the next period.

Staying on top of these rules ensures your 3PL warehouse is legally compliant with the FDA’s food regulations and avoids nasty surprises like cancelled imports or penalties. When in doubt, consult the FDA’s resources (see citations below) or call their FURLS help desk. Safe storing!

Frequently Asked Questions

Do 3PL warehouses need an FDA “food-grade” certificate to store food?

No. There is no official FDA “food-grade” certificate. However, any facility that stores food products must register with the FDA as a food facility. Voluntary certifications (SQF, BRCGS) support trust and safety but do not replace the legal registration requirement.

What products trigger the need for FDA registration?

Any facility storing food, beverages, dietary supplements, or animal feed intended for U.S. consumption must register. This includes snacks, bottled drinks, pet treats, and vitamins. Even temporary “holding” triggers registration.

How does a 3PL warehouse register with the FDA?

Warehouses register through the FDA Industry Systems portal (FURLS) using the Food Facility Registration Module. Registration is free and requires facility details, product handling categories, and a Unique Facility Identifier (e.g., DUNS number).

Are there exemptions to the FDA registration rule?

Yes. Pure carriers in transit, retail stores and restaurants, farms holding their own produce, and facilities storing only packaging materials do not need to register. Most commercial 3PL warehouses handling food must register.

How often must FDA food facility registration be renewed?

Every two years during the October 1 – December 31 window of even-numbered years (2026, 2028, etc.). Registrations expire if not renewed by December 31.

Citations

Argos Software: 7 Quick Q&As for FDA Food Facility Registration
FDA: Food Facility Registration User Guide: Registration of Food Facilities, Step-by-Step Instructions
FDA: Online Registration of Food Facilities
FDA: Questions & Answers Regarding Food Facility Registration (7th Ed.)
FDA: Registration of Food Facilities & Other Submissions
FDA: Reminder: Food Facilities Register/Renew Registratio n
Smart Warehousing: Getting Certified as a Food-Grade Warehouse
Smart Warehousing: The Role of Food-Grade Warehousing in Meeting Regulatory Requirements for Food Storage

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

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Best 3PL Companies: Why Hiring a Traditional 3PL for Fulfillment Is a Mistake

The Traditional Third-Party Logistics (3PL) Model: How It Works & Why It Falls Short
Cahoot’s Peer-to-Peer Fulfillment Network: Key Differentiators
Side-by-Side Comparison: Traditional 3PL vs. Cahoot
Product Categories Most Vulnerable to Traditional 3PL Limitations
Risk Analysis & Mitigation for Each Model
How Sellers Should Evaluate Fulfillment Options
Conclusion & Next Steps
Frequently Asked Questions

Rapidly evolving customer expectations, such as next‐day delivery, free shipping, and impeccable order accuracy, have put immense pressure on ecommerce businesses to optimize their supply chain and fulfillment operations. For years, the conventional wisdom held that outsourcing to one of the best 3PL companies (third-party logistics providers) was the gold standard for reliable delivery services. Yet today, many merchants are discovering that traditional 3PL companies carry hidden costs, limited flexibility, and operational inefficiencies that hinder business growth. In many cases, partnering with a 3PL company is seen as a way to support a business’s growth by streamlining logistics and enabling scalability, but these benefits are not always realized with traditional providers. In contrast, peer-to-peer fulfillment networks, like Cahoot, leverage existing ecommerce expertise, distributed inventory management, and advanced logistics technology to deliver seamless, technology-driven fulfillment services. This article explains why partnering with a traditional 3PL for logistics operations can be a mistake and offers actionable advice on how to evaluate alternatives, with a focus on Cahoot’s assetless, peer-to-peer model.

The Traditional Third-Party Logistics (3PL) Model: How It Works & Why It Falls Short

Third-party logistics companies (3PL) have historically provided comprehensive supply chain solutions: warehouse storage, pick-pack-ship, freight forwarding, reverse logistics, and value-added services such as kitting or custom packaging solutions. These services are part of the broader supply chain management functions that 3PLs handle for their clients, including activities like warehousing, transportation, inventory management, and order fulfillment. 3PLs also offer logistics management as a core service, encompassing warehousing, transportation, and inventory control to streamline and optimize supply chain operations. They often own or lease large fulfillment centers, invest heavily in robust logistics infrastructure, and tout their extensive global network. The logistics capabilities of 3PLs support ecommerce business operations by enabling companies to scale, improve efficiency, and meet customer demands effectively. While these supply chain management services sound appealing in theory, promising operational efficiency and cost savings through economies of scale, in practice, many merchants discover that traditional 3PLs introduce new challenges.

Centralized Warehousing & Fixed Asset Overhead

Traditional 3PL providers typically own or lease multiple fulfillment centers across regions, relying on a robust network of facilities to support their operations. Their extensive network enables broad geographic reach and scale, investing in forklifts, racking, and extensive staffing for supply chain operations. This means they carry significant fixed asset costs, warehouse rent, utilities, labor, and equipment depreciation that must be recouped through minimum-volume contracts and storage fees. During slow seasons, those costs remain constant, leading 3PL companies to impose strict minimum-monthly invoices or chargeback penalties when order volumes dip.

Actionable Takeaway: Request a fully itemized quote from your 3PL, asking specifically about storage minimums, seasonal surcharges, and long-term lease obligations. If their base overhead drives your logistics costs up regardless of your sales volume, consider alternative models with usage-based pricing.

Standard Operating Culture vs. Seller-Mindset

Employees at a legacy fulfillment center often fulfill orders for dozens or hundreds of different ecommerce businesses. While service-level agreements (SLAs) and performance metrics exist, many 3PL staff “punch a clock” under broad policies rather than taking ownership over specific brands. This lack of ownership can negatively impact the delivery of quality service, leading to less attention to detail and lower customer satisfaction. As a result, packaging may be generic, void fill may be minimal, and handling may prioritize speed over customer satisfaction. In contrast, partner sellers in a peer-to-peer network like Cahoot are ecommerce experts who ship their own orders all day, every day. They treat Cahoot orders with the same care they give their own, using right-size packaging, quality dunnage, and ensuring precise pick-pack accuracy to enhance customer satisfaction and maintain brand reputation.

Actionable Takeaway: Ask your current 3PL to provide photos or video walkthroughs of their order fulfillment workflow, including how they pick, pack, and palletize your merchandise. Compare that to Cahoot’s model, where partner sellers share their own fulfillment processes and quality control protocols. If your 3PL’s service quality feels generic, it’s time to reevaluate.

Contractual Rigidity & Onboarding Timelines

Signing a multi-year contract with one of the best 3PL companies can lock merchants into rigid rate cards, annual volume commitments, and early-termination penalties. These rigid contracts often prevent businesses from accessing scalable solutions that can adapt to changing demand, such as seasonal spikes or rapid growth, and may also limit the availability of tailored solutions for businesses with unique or evolving logistics needs. Moreover, onboarding a new account at a 3PL often takes 4–8 weeks: mapping SKUs into the warehouse management system (WMS), negotiating carrier contracts, and configuring inventory management integrations with your ecommerce platform. Slow ramp-up times delay your time-to-market, making it nearly impossible to pivot quickly for seasonal promotions or unexpected demand spikes.

Actionable Takeaway: Compare your current 3PL’s onboarding timeline to Cahoot’s plug-and-play setup. Cahoot can typically be ready to fulfill orders within a few days without long-term commitments. If your business requires faster time-to-market, a flexible network model will better support supply chain optimization.

Cahoot’s Peer-to-Peer Fulfillment Network: Key Differentiators

Cahoot’s peer-to-peer model transforms traditional logistics by partnering with established ecommerce sellers, businesses that are already shipping their own orders to end customers every day. This cooperative design creates a distributed network of fulfillment centers without the burden of fixed assets, delivering tailored logistics solutions and tailored services that address the specific needs of different businesses. Cahoot’s advanced technology enables optimized logistics processes, enhancing operational efficiency and delivery accuracy while reducing logistics costs and supporting scalable growth.

Assetless, Cooperative Design vs. Legacy Overhead

Unlike traditional 3PL providers that own or lease expensive real estate, Cahoot operates an assetless model: it leverages partner sellers’ excess storage space and fulfillment capacity. These partner sellers maintain their own robust logistics infrastructure for their own brands, temperature-controlled rooms for supplements, secure areas for electronics, and specialized racks for apparel. By tapping into this existing network, Cahoot eliminates the need for merchants to pay for underutilized warehouse space or fixed labor costs. This approach delivers efficient logistics solutions by reducing overhead and maximizing resource utilization. Pricing becomes purely usage-based, reflecting only the actual pick-pack-ship labor and shipping costs without hidden overhead.

Actionable Takeaway: Run a direct cost comparison: request a quote from your 3PL that includes all overhead fees, minimum storage fees, cross-dock charges, and dedicated labor costs. Then request Cahoot’s usage-based rates, which show exactly what you’ll pay per order. Clients routinely confirm that the predicted ROI is indeed achieved. You’ll likely discover 20%–30% cost savings of your own.

Expertise & Quality Mindset of Partner Sellers

Cahoot’s partner sellers are ecommerce experts who ship thousands of orders per week for their own businesses. They care deeply about customer experience and loyalty, continuously optimizing their logistics operations to maximize customer satisfaction and reduce returns. In addition to their expertise, partner sellers can provide specialized services tailored to specific product types or unique business requirements, ensuring custom fulfillment and supply chain solutions. When these same sellers fulfill Cahoot orders, they apply identical rigor: right-size packaging, high-quality void-fill, and precise SKU handling. This level of specialized expertise, combined with Cahoot’s Fulfillment Verification technology, makes it nearly impossible to ship the wrong item to the wrong customer, thus allowing them to claim a 100% fulfillment accuracy rate. The resulting high quality helps merchants qualify for the most rigorous programs, such as Amazon Seller-Fulfilled Prime (SFP), which demands near-perfect fulfillment accuracy and rapid transit times.

Actionable Takeaway: Identify two high-volume SKUs you currently ship via a third-party. Ask the 3PL how they pack and ship those exact SKUs, review box dimensions and dimensional weight, dunnage materials, and packing checklists. Compare that to the size and weight of your SKUs and confirm that you’re not overpaying for shipping using a too-large box vs. using a right-sized box.

Distributed Network for Supply Chain Optimization, Speed & Reliability

Traditional 3PL fulfillment centers typically rely on regional warehouses. If your end customer falls outside the core distribution zone, standard ground shipping can take 3–5 days. In contrast, Cahoot’s distributed network places inventory at partner nodes strategically located near population centers. This enables next-day or two-day delivery to over 95% of U.S. zip codes, even for merchants based in only a few regions. By leveraging this distributed network, Cahoot provides seamless logistics solutions that ensure fast and reliable delivery. Additionally, Cahoot ships six days a week, unlike many 3PLs that only operate Monday through Friday, and offers a later same-day fulfillment cutoff. This flexibility reduces weekend order backlogs, enhances customer experience, and ensures that ecommerce businesses can meet high customer expectations for fast, reliable delivery.

Actionable Takeaway: Map your top 10 zip codes by sales volume and calculate current transit times from your 3PL’s central warehouse(s). Then ask Cahoot to provide average transit times from its nearest location to those same zip codes. If Cahoot offers a two-day improvement on average, you’ll boost customer satisfaction and reduce cart abandonment related to slow shipping.

Plug-and-Play Technology & Real-Time Visibility

Leading 3PL companies offer logistics software that integrates with ecommerce platforms, but many suffer from delayed data (24–48 hour lags) or clunky user interfaces. Cahoot’s technology-driven fulfillment services are built for real-time integration: native connectors for Shopify, WooCommerce, Amazon Seller Central, BigCommerce, and more. As soon as an order is placed, the Cahoot dashboard updates inventory levels, routes the order to the optimal node, and displays carrier tracking in real time. This real-time integration enables businesses to address their unique logistics needs more effectively, ensuring that specific requirements and complexities are managed with greater precision. Built-in analytics and supply chain consulting tools help merchants proactively identify stockouts, detect inventory shrinkage, and optimize reorder points, all within a single, intuitive interface.

Actionable Takeaway: Request demo access to both your current 3PL’s portal and Cahoot’s dashboard. Place a sample order and track how quickly each platform updates order status, inventory levels, and shipping confirmations. If Cahoot’s live updates reduce latency and improve decision-making, you’ll gain a competitive advantage.

Side-by-Side Comparison: Traditional 3PL vs. Cahoot

A direct comparison between industry-leading 3PL providers and Cahoot’s peer-to-peer network makes it clear why many merchants choose to switch. While traditional 3PLs offer standard order fulfillment services, Cahoot provides a more innovative and distributed approach, allowing for greater flexibility and efficiency in handling diverse ecommerce needs.

When it comes to shipping and delivery, flexible transportation solutions are crucial for meeting customer expectations and ensuring timely, reliable order fulfillment.

Cost Structure & Overhead

Traditional 3PL Companies:
- Monthly storage fees based on reserved cubic footage or pallet positions; surcharges during peak seasons.
- High minimum monthly invoice requirements.
- Fixed labor costs for pick, pack, and ship; potential overtime fees during surges.
- Additional value-added services (kitting, returns processing, custom packaging) are often billed at premium rates.
- Fulfillment costs can be significant, as traditional 3PLs may charge extra for tailored ecommerce logistics and fulfillment solutions.
Cahoot’s Peer-to-Peer Network:
- No fixed storage minimums, uses partner sellers’ excess capacity, so monthly invoicing matches actual usage.
- Every order is rate-shopped across all carriers and services supported from every location that has inventory in stock and is assigned to ship for the lowest cost identified, eliminating dimensional-weight surprises.
- Value-added services are billed strictly as time and materials, at transparent, market-competitive rates, reflecting actual usage.
- Fulfillment is optimized for ecommerce businesses, reducing costs by streamlining warehousing, distribution, and fulfillment through a flexible (“elastic”) network.

Actionable Takeaway: Build a simple spreadsheet comparing the cost per order (storage + pick/pack + shipping) for both models over a 30-day period. Include any one-time onboarding fees and account management. If Cahoot’s total landed cost per order is at least 15% lower, you stand to save tens of thousands of dollars annually. Note: Cahoot will do the calculations for you.

Fulfillment Speed & Geographic Reach

Traditional 3PL Providers:
- Centralized fulfillment often results in 3–5 day ground shipping to certain regions, especially if orders ship from a single warehouse.
- Limited weekend operations; orders placed on Fridays may not ship until Monday, delaying delivery and impacting customer satisfaction.
- Peak-season capacity constraints can force overflow to slower carriers or result in shipping delays.
Cahoot’s Distributed Network:
- Inventory is placed at multiple fulfillment centers (partner nodes) close to end customers, enabling next-day or two-day delivery to 95% of U.S. zip codes.
- Six-day shipping and later same-day shipping cutoff times ensure weekend orders are processed promptly, delivering to your customers faster.
- During peak seasons and when weather negatively impacts the ability for a carrier to move packages through their shipping network, Cahoot dynamically routes orders to partner sellers with available capacity, mitigating bottlenecks and ensuring high on-time delivery rates.

Actionable Takeaway: Identify your top five high-volume zip codes by sales. Compare average transit days from your 3PL’s warehouse(s) to those zip codes versus Cahoot’s nearest nodes. If Cahoot promises a two-day improvement, you’ll decrease order-related support tickets and boost repeat purchase rates.

Scalability & Flexibility

Traditional 3PL Companies:
- Staffing levels are fixed; adding labor during surges often comes at a high premium.
- Forecasting must be done months in advance; inaccurate forecasts lead to overstock fees or stockouts.
Cahoot’s Peer-to-Peer Model:
- Scales dynamically with demand, and partner sellers adjust capacity in real time.
- Flexible inventory allocation: Merchants can move stock between partner nodes quickly and easily, reducing excess inventory and stockouts in key regions.

Actionable Takeaway: Analyze your last two Black Friday/Cyber Monday seasons. Document the percentage of orders your 3PL delayed or rerouted due to capacity limits. Then request Cahoot’s peak-season performance metrics for similar volumes. If Cahoot processed 100% of orders on time compared to your 3PL’s 90%, the flexibility is clear.

Quality Control & Accuracy

Traditional 3PL Providers:
- Large warehouses lacking the robust technology to handle tens of thousands of SKUs can yield mis-pick rates exceeding 1%.
- Generic packaging solutions may not meet brand standards, resulting in higher damage rates and customer returns.
- Reverse logistics and returns processing may be siloed, leading to delayed refund issuance and negative customer experiences.
Cahoot’s Partner-Seller Expertise:
- They apply the same high standards, checklists, barcode scanning, and dual verification to Cahoot orders as they do their own, delivering efficient fulfillment services with high accuracy and low error rates. Plus, partner sellers can ONLY ship Cahoot orders using the Cahoot technology. There’s no option otherwise. The technology literally prevents fulfillment defects.
- Specialized partner sellers offer custom solutions such as cold storage, cold pack shipping, food grade storage, FDA registration, FBA Forwarding, oversized SKUs, hazmat, fragile…you name it.
- Integrated reverse logistics network streamlines returns, orders are inspected locally, restocked quickly, and refunds are issued promptly, enhancing customer satisfaction. Plus, Cahoot’s Peer-to-Peer Returns solution virtually eliminates returns altogether.

Actionable Takeaway: Request fulfillment accuracy reports (mis-pick and damage rates) from your current 3PL for the past six months. Then ask Cahoot for average accuracy metrics across partner nodes. If Cahoot outperforms by at least 0.5%, you’ll see fewer costly re-shipments and better customer reviews.

Product Categories Most Vulnerable to Traditional 3PL Limitations

While every business has unique supply chain requirements, certain product categories tend to suffer disproportionately under the traditional 3PL model. Limitations in traditional 3PLs can disrupt supply chains, leading to inefficiencies and reduced visibility for these products. Cahoot’s peer-to-peer network, with its specialized expertise and distributed infrastructure, addresses these vulnerabilities directly.

Perishable Goods (Food, Supplements)

Challenges with Traditional 3PL:
- Centralized fulfillment centers may be geographically distant from end customers, increasing transit times and risking spoilage.
- Limited temperature-controlled capacity, 3PL inventory is stored in shared cold rooms, potentially compromising compliance with food safety regulations.
- Ineffective transportation management can further jeopardize the timely and safe delivery of perishable goods, increasing the risk of spoilage.
- Returns or damaged goods due to spoilage create logistical headaches and erode profit margins.
Cahoot’s Peer-to-Peer Advantage:
- Local partner sellers often maintain temperature-controlled facilities near high-demand markets, ensuring same-day or next-day delivery that preserves freshness.
- Specialized sellers follow strict inventory management processes, FIFO (first in, first out), batch tracking, and FDA-compliant storage protocols.
- Reverse logistics for perishable returns are handled promptly, minimizing disposal costs.

Actionable Takeaway: Select two SKUs of perishable goods; compare spoilage or damage rates between your 3PL and Cahoot’s local nodes over a 30-day testing period. The difference in product integrity will be stark.

“Cahoot has amazing technology in addition to their large warehouse network, sort of like Amazon FBA but without the hefty fees or restrictions. Cahoot saved our peak-selling ecommerce season!”

~ Joel Frankel, Fames Chocolates

Speak to a fulfillment expert

Bulky/Oversized Items (Furniture, Fitness Equipment, Home Décor)

Challenges with Traditional 3PL:
- Central warehouses often rely on national LTL (less-than-truckload) carriers, incurring high dimensional-weight fees and extended transit times.
- Packaging materials may not be optimized for oversized items, leading to damage or higher freight forwarding surcharges.
- Lack of specialized handling can result in higher return rates and frustrated customers.
Cahoot’s Peer-to-Peer Advantage:
- Partner sellers network with regional LTL or white-glove specialists, reducing freight costs and offering more reliable and faster delivery for bulky items.
- Custom packaging solutions, reinforced boxes, corner protectors, and void fill ensure safe transport.
- Flexibility to route orders to the nearest node with capacity, minimizing transit distance and shipping costs.

Actionable Takeaway: Calculate your average dimensional-weight fee for bulky SKUs under your 3PL model. Then request Cahoot’s negotiated regional LTL rates for those same items. If Cahoot reduces freight costs by 20% or more, you’ll see immediate improvement in operational efficiency.

Seasonal Apparel & Flash-Sale Merchandise

Challenges with Traditional 3PL:
- Requires forecasting inventory levels 3–6 months in advance; inevitable inaccuracies lead to overstock charges or costly stockouts.
- Peak-season storage fees skyrocket, and underutilized space during off-season remains a sunk cost.
- Limited ability to quickly redistribute merchandise across multiple fulfillment centers.
Cahoot’s Peer-to-Peer Advantage:
- No storage minimums; merchants pay only for what they store and ship, eliminating off-season overhead.
- Ability to quickly shift inventory between partner nodes based on real-time demand analytics.
- Network flexibility ensures that flash-sale items are placed close to buyers as soon as sales data emerges, reducing lead times and lowering return rates.

Actionable Takeaway: Analyze your previous two seasonal peaks, quantify days of stockouts and overstock costs under a 3PL model. Then compare to Cahoot’s pilot performance over the same period. If Cahoot reduced stockouts by 30% and eliminated off-season fees, seasonality becomes a strategic advantage.

High-Value Electronics & Luxury Goods

Challenges with Traditional 3PL:
- Longer transit times increase the risk of theft or damage; generic packaging may not meet premium-brand quality standards.
- Many 3PLs treat high-value SKUs the same as everyday commodity items, leading to higher insurance claims.
- Standard returns processing can be slow, frustrating customers when expensive items need repair or replacement.
Cahoot’s Peer-to-Peer Advantage:
- Specialized partner sellers can offer dedicated white-glove service and custom secure shipping, ensuring better tracking and handling for luxury items.
- Custom packaging solutions, anti-static bags for electronics, and reinforced packaging for fragile components reflect a brand’s commitment to quality.
- Integrated reverse logistics allow expedited returns, enhancing customer loyalty and reducing potential chargebacks or disputes.

Actionable Takeaway: Track your shrinkage or damage claim rates for high-value SKUs over six months with a traditional 3PL. Then run a small pilot with Cahoot for those same items. If Cahoot’s damage rates decrease significantly, perhaps by over 50%, you’ll safeguard both profit margins and customer satisfaction.

Risk Analysis & Mitigation for Each Model

Every fulfillment decision carries risks. By understanding and quantifying those risks, merchants can make informed choices aligned with supply chain performance goals.

Hidden Fees & Contract Penalties (Traditional 3PL)

Risks:
- Automatic rate escalators tied to fuel surcharges or annual inflation adjustments.
- Excessive storage charges when inventory dips below or exceeds contract expectations.
- Early termination penalties that can amount to thousands of dollars if you switch providers mid-contract.
Cahoot’s Mitigation:
- Transparent, usage-based invoicing with no hidden surcharges; each line item (pick/pack, packaging, shipping) is clearly detailed.
- No long-term commitments.
- Dynamic pricing that reflects current market rates for shipping carriers, reducing the risk of unexpected cost spikes.

Actionable Takeaway: Ask your 3PL rep to provide a full 12-month cost breakdown, including all surcharges, storage minimums, and penalty clauses. Then request Cahoot’s itemized quote. If Cahoot’s transparency reduces your logistics costs by 15% or more, the assetless model is clearly superior.

Inventory Management: Shrinkage & Mis-Picks

Risks (Traditional 3PL):
- Large fulfillment centers handling thousands of SKUs often exhibit mis-pick rates above 1%, leading to returns (lost sales) and re-shipments (lost inventory and lower overall margins).
- Generic security protocols may not deter employee collusion or theft.
- Limited fraud detection software within legacy warehouse management systems (WMS).
Cahoot’s Mitigation:
- Partner sellers use barcode scanning, dual verification, and built-in fraud detection software to maintain mis-pick rates near 0%.
- Inventory is treated as if it’s their own; partner sellers have a vested interest in reducing shrink, since they rely on the same processes to ship their own products.
- A distributed network reduces the impact of a single node’s shrinkage; issues are localized and resolved quickly.

Actionable Takeaway: Review your 3PL’s last inventory shrinkage report. Then request Cahoot’s average shrinkage metrics. If Cahoot’s partner network consistently demonstrates lower shrink and mis-pick rates, you’ll reduce costly re-shipments and improve customer trust.

Peak-Season Capacity Constraints

Risks (Traditional 3PL):
- Limited storage and labor capacity during Black Friday/Cyber Monday and other major sale events often leads to delayed orders, oversell situations, or surcharges.
- Forecasting must be done months in advance; inaccurate projections result in expensive last-minute labor or off-site warehousing.
- Manual rerouting may be required when capacity thresholds are breached.
Cahoot’s Mitigation:
- Dynamic, distributed network with partner sellers that can onboard additional capacity within days, no long-term forecasting required.
- Automated order routing ensures that orders flow to nodes with available capacity, avoiding bottlenecks.
- Real-time analytics highlight potential constraints hours before they occur, allowing preemptive adjustments.

Actionable Takeaway: Compile data on how many orders your 3PL delayed or rerouted during your last two peak seasons. Compare that to Cahoot’s performance metrics for similar volumes. If Cahoot processes over 99% of orders on time versus your 3PL’s 90%, the distributed model mitigates peak risks effectively.

Lack of Customer-Centric Focus

Risks (Traditional 3PL):
- Employees may lack brand-level context, leading to packing errors or suboptimal customer experiences.
- Generic customer service tools and slow resolution of order issues can harm brand reputation.
- Limited ability to create tailored logistics solutions, returns, custom packaging, or premium unboxing experiences.
Cahoot’s Mitigation:
- Partner sellers have skin in the game; they ship their own products, so they protect brand reputation, customer loyalty, and lifetime value.
- Cahoot’s integrated customer service tools enable real-time chat and immediate escalation for order issues, reducing resolution time.
- Custom packaging solutions, print-on-demand boxes, branded inserts, or kitting are offered by specialized sellers with experience enhancing the unboxing experience.

Actionable Takeaway: Learn about how Cahoot partner sellers prioritize order quality and customer satisfaction. Compare that cultural mindset to feedback from your existing 3PL’s account manager. If Cahoot’s partner sellers demonstrate deeper brand alignment, you’ll foster stronger customer loyalty.

How Sellers Should Evaluate Fulfillment Options

Choosing the right fulfillment partner requires objective metrics, targeted questions, and a thorough pilot test. For ecommerce businesses, it is crucial to select a partner that understands the unique challenges and requirements of online sellers, offering solutions that support growth and operational efficiency. When evaluating providers, be sure to consider their expertise in ecommerce fulfillment, ensuring they can deliver tailored logistics and warehousing solutions that meet your business needs. Below is a step-by-step guide.

Define Core Metrics Up Front

1. Total Landed Cost Per Order (pick/pack + packaging + shipping + storage)

2. On-Time Delivery Rate (aim for ≥ 99% two-day or next-day success)

3. Order Accuracy (target ≥ 99.7% pick/pack accuracy)

4. Customer Satisfaction (returns rate, net promoter score post-delivery)

5. Supply Chain Performance (inventory turnover, shrinkage, stockout events)

Actionable Takeaway: Create a weighted scorecard with these metrics (e.g., cost 40%, speed 30%, accuracy 20%, satisfaction 10%) to compare providers objectively.

Ask the Right Questions in Your RFP

“What is your average onboarding time for a midsize merchant (5,000 orders/month)?”
“Can you guarantee two-day delivery to our top 10 metros six days a week, and what are your cutoff restrictions?”
“How do you handle specialized logistics services, custom packaging, kitting, or temperature-controlled storage?”
“What is your mis-pick rate and inventory shrinkage percentage over the past 12 months?”
“Describe your technology integration: how often is my dashboard updated, and how do you handle returns or reverse logistics?”
“What are your fees for dimensional-weight shipments, peak-season surcharges, and storage minimums?”

Actionable Takeaway: Compile these questions into an RFP spreadsheet. Assign each answer a score (1–5) to ensure apples-to-apples comparison between prospective 3PL providers and Cahoot.

Run a Two-Week, 10-SKU Pilot

1. Select 10 Representative SKUs: Choose a mix of high volume, high value, bulky, perishable, and seasonal products. This step is especially important for an ecommerce business aiming to optimize its logistics and ensure that fulfillment solutions can support growth and operational needs.

2. Split Shipments: Ship half of those SKUs through your incumbent 3PL and half through Cahoot for 14 days.

3. Measure Key Metrics:

Total cost per order (including any hidden fees)
Fulfillment speed (order cutoff to delivery)
Return handling efficiency (time to refund, restocking accuracy)
Customer feedback (surveys or NPS scores post-delivery)
Carrier claim incidents (damages, lost packages, mis-picks)

4. Analyze Results Side-by-Side: Document pilot results in a side-by-side table.

5. Make an Informed Decision: If Cahoot saves ≥ 20% on total cost per order or improves on-time delivery by ≥ 2 days, plan to transition fully within 60 days.

Actionable Takeaway: Schedule your pilot as soon as possible, ideally spanning a weekend, to test Cahoot’s six-day shipping and late cutoff capabilities. Use actual order data to ensure an accurate comparison.

Conclusion & Next Steps

Outsourcing logistics to one of the best 3PL companies once seemed like an easy path to supply chain optimization. Yet traditional 3PLs, with fixed asset overhead, rigid contracts, and a cookie-cutter approach to fulfillment, often burden merchants with hidden fees, slower speeds, and lower service quality. Cahoot’s peer-to-peer fulfillment network, on the other hand, leverages partner sellers’ existing logistics infrastructure, advanced technology integration, and specialized expertise to deliver scalable, tailored logistics solutions that enhance customer satisfaction, reduce logistics costs, and drive business growth.

Immediate Actions for Merchants

1. Build Your RFP Scorecard: Include metrics for cost, speed, accuracy, and customer satisfaction, and use it to evaluate your current 3PL and Cahoot side-by-side.

2. Schedule a Two-Week Pilot: Select 10 representative SKUs and ship through both providers to gather real data on costs and performance.

3. Negotiate Exit Clauses: If you’re under contract with a 3PL, review your termination penalties and create a transition plan to minimize fees.

Long-Term Fulfillment Strategy

Annual Review of Fulfillment Partners: Market dynamics, shipping costs, customer expectations, and technology evolve rapidly. Revisit your fulfillment strategy every 12 months to ensure you remain agile.
Invest in Technology-Driven Fulfillment Services: Embrace platforms that offer real-time inventory management, automated supply chain optimization, and integrated customer service tools.
Leverage a Robust Logistics Network: Whether you choose a peer-to-peer model like Cahoot or another 3PL provider, prioritize a distributed, scalable network with specialized expertise in your product category.

By proactively evaluating fulfillment options, considering both traditional 3PL companies and innovative networks like Cahoot, merchants can optimize logistics processes, enhance supply chain performance, and ultimately deliver the best possible customer experience.

Frequently Asked Questions

What are the main differences between traditional 3PL companies and Cahoot’s peer-to-peer fulfillment network?

Traditional 3PLs operate large, centralized fulfillment centers they own or lease, carrying significant fixed-asset overhead and often requiring long-term contracts with minimum-volume commitments. Staffing in these warehouses typically fulfills dozens of brands, which can lead to generic packaging, higher mis-pick rates, and slower response times. In contrast, Cahoot partners with established ecommerce sellers who ship their own orders daily. Because these partner sellers treat Cahoot orders like their own, using right-size packaging, quality dunnage, and rigorous inventory management, order accuracy is higher, and customer satisfaction improves. Cahoot’s assetless, distributed model leverages excess capacity across multiple fulfillment centers, resulting in usage-based pricing without hidden storage fees, six-day shipping with a later cutoff, and real-time, technology-driven visibility.

How do logistics costs compare between a traditional 3PL and Cahoot’s model?

With traditional 3PLs, merchants often face minimum monthly storage fees, peak-season surcharges, and dimensional-weight penalties, even when order volumes dip. They also pay a markup on labor for pick/pack services. Cahoot’s peer-to-peer network eliminates fixed storage minimums by using partner sellers’ excess space, so you pay only for what you store and ship. Cahoot’s blended per-order rates include negotiated carrier discounts, reducing transportation costs. In practice, many merchants see 15%–30% lower total landed cost per order with Cahoot because there are no hidden surcharges, and pick/pack labor comes from existing ecommerce experts rather than centralized warehouses with fixed overhead.

Which product categories benefit most from switching away from a traditional 3PL?

Certain categories suffer most under a centralized model:

Perishable Goods (Food, Supplements): Traditional 3PL warehouses can be far from end customers, increasing transit times and spoilage risk. Cahoot’s local nodes often include partner sellers with temperature-controlled facilities near key markets, ensuring same- or next-day delivery and reducing waste.
Bulky/Oversized Items (Furniture, Fitness Equipment): Centralized LTL freight lanes incur high dimensional-weight fees and longer transit. Cahoot dynamically matches orders to regional LTL or white-glove carriers, lowering freight costs and improving reliability.
Seasonal Apparel & Flash-Sale Merchandise: Traditional 3PLs require months of forecasting and charge steep peak-season storage fees. Cahoot can adapt to real-time changes swiftly and redistribute inventory between nodes, avoiding both overstock and stockout situations.
High-Value Electronics & Luxury Goods: Central fulfillment delays increase theft/damage risk; generic packaging may not meet premium standards. Cahoot’s specialized partner sellers provide custom packaging and secure carrier options, leading to lower damage rates and higher customer satisfaction.

How should I evaluate fulfillment options to decide between a traditional 3PL and Cahoot?

Start by defining core metrics such as total landed cost per order (storage + pick/pack + shipping), on-time delivery rate, order accuracy, and customer satisfaction (returns rate or NPS). Build an RFP scorecard where you score each provider on these weighted metrics. Ask targeted questions: onboarding timeline for a midsize merchant, two-day delivery capabilities six days a week, mis-pick and shrinkage rates, technology integration, and real-time reporting, and fees for dimensional-weight or peak-season surcharges. Finally, run a two-week, 10-SKU pilot, splitting those SKUs between your incumbent 3PL and Cahoot, to compare actual costs, delivery speed, return handling, and customer feedback. If Cahoot outperforms on cost or speed, it’s likely the better choice.

What technology and customer-centric features set Cahoot apart from traditional 3PL logistics services?

Many legacy 3PLs offer a portal for inventory management and order tracking, but data often lags 24–48 hours, and interfaces can be clunky. Cahoot’s technology-driven fulfillment services integrate natively with major ecommerce platforms, Shopify, Amazon Seller Central, BigCommerce, and more, providing real-time updates on inventory levels, order routing, and carrier tracking. Cahoot’s dashboard also includes built-in reverse logistics workflows to streamline returns. Because partner sellers are also merchants, they apply a customer-first mindset: they use premium packaging, rigorous quality control, and responsive customer service tools, ensuring every order meets high expectations and enhances brand loyalty.

Written By:

Manish Chowdhary

Manish Chowdhary is the founder and CEO of Cahoot, the most comprehensive post-purchase suite for ecommerce brands. A serial entrepreneur and industry thought leader, Manish has decades of experience building technologies that simplify ecommerce logistics—from order fulfillment to returns. His insights help brands stay ahead of market shifts and operational challenges.

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How To Choose The Best Faire 3PL For Your Orders

Why Selling on Chewy Is Great for Ecommerce Merchants
Chewy Case Studies (Brand Success Stories)
Chewy Seller Onboarding (Step-by-Step)
Common Pitfalls & Pro Tips for Chewy Sellers
Faire Program Growth & Updates
What to Look for in a Faire 3PL
The Role of Logistics in Customer Satisfaction
Responsive, Reliable Customer Support
Experience Working with Faire Sellers
Top Faire 3PL Companies
Cahoot: The Best Faire 3PL
Summary
Frequently Asked Questions

Faire.com is a global B2B wholesale marketplace that connects independent brands (makers/artisans) with retail store buyers. In Faire’s model, Sellers list products at wholesale prices and fulfill orders themselves from their own warehouse or a 3PL. Orders are usually placed in bulk by retailers (often 1–100 units or more) and shipped via standard freight or parcel carriers to store locations. Faire fulfillment is a specialized service tailored to the needs of brands and retailers on Faire, supporting efficient and reliable wholesale operations.

Faire handles order discovery, promotions, and payments, and provides buyers 60-day net terms and (commonly) free first-order shipping. Sellers can join Faire by application; no invite is strictly required, and they maintain full control of inventory.

To fulfill orders efficiently, many Faire Sellers partner with third-party logistics (3PL) fulfillment providers; these companies specialize in various aspects of order fulfillment, including warehousing, shipping, and inventory management. These 3PL companies integrate with Faire’s API to automatically sync orders, inventory levels, and tracking. As such, the Faire integration streamlines the fulfillment process and ensures accurate order syncing between the Seller’s Faire account and the logistics provider.

Why Selling on Faire Is Great for Ecommerce Merchants

Faire offers a unique platform connecting independent brands with retailers, providing an avenue for ecommerce businesses to expand their wholesale operations. The platform’s user-friendly interface and extensive retailer network make it an attractive option for merchants seeking to grow their customer base. Faire enables ecommerce businesses to efficiently meet increased demand, especially during seasonal peaks or periods of rapid growth. Its features are designed to enhance operational efficiency and deliver a seamless customer experience, helping merchants build loyalty and satisfaction.

Faire Case Studies (Brand Success Stories)

Faire’s own “Stories” highlight numerous brands that grew via the marketplace. Jordan’s Skinny Mixes (specialty beverage brand) launched on Faire in 2020 and saw rapid growth: its first year on Faire brought in over $250,000 in wholesale orders, and by late 2023 it had crossed $10 million in lifetime order volume on the platform. Similarly, Audrey’s Home Decor joined Faire in March 2023 and outpaced expectations: nine months in, their sales on Faire were already 10× their original first-year target. Audrey’s reported that Faire accounted for over 50% of its new customers that year, and enabled them to ship to six different countries (compared to only serving local regions before). These cases illustrate Faire’s ability to connect Sellers with a vast pool of retailers (Faire cites over 50,000 cities globally on its platform) and accelerate brand growth.

Faire Seller Onboarding (Step-by-Step)

1. Create Faire Account: Go to Faire.com and select “Sell on Faire”. Complete the application with your business details. There is no selection committee beyond standard vetting.

2. Submit Product Catalog: Once approved, upload your product catalog. Sellers often fill out a template spreadsheet or use Faire’s web tools to add each SKU (title, wholesale price, retail price, description, category, etc.).

3. Set Terms: In your shop settings, specify minimum order quantities, shipping fees (if any), and country availability. By default, Faire buyers get free first-order shipping; you can opt into Faire’s “Insider” program to subsidize all orders.

4. Inventory & Banking: Connect your bank account for payouts. Enter SKU inventory levels. Faire immediately lists your items on the platform.

5. Begin Receiving Orders: Faire will notify you by email when a retailer places an order. According to reports, most new Sellers receive an order within about a week of going live.

6. Process & Ship Orders: Log into Faire to see the order. You have options to accept the order (and choose a ship date), edit it to backorder some items, or cancel if needed. Usually, you will accept and ship. Package the order, upload tracking in Faire, and mark it shipped. Seller gets paid upon shipment (or can pay a fee to get paid immediately).

Common Pitfalls & Pro Tips for Faire Sellers

Despite its advantages, selling on Faire may present challenges such as managing bulk orders, ensuring timely fulfillment, and maintaining accurate inventory levels to meet retailer expectations and enhance customer satisfaction.

Underestimating Returns: Faire’s liberal return policy can surprise new Sellers. Retailers can return unsold goods within 60 days, and Faire absorbs this cost. Pitfall: Treating every sale as final. Tip: Anticipate ~10–20% returns, price or package products accordingly, and keep some buffer stock. (Faire will even redistribute returns through its “Maker Market”).
Shipping Cost Mismanagement: Retailers often expect free or very low shipping, due to Faire’s programs. Tip: If shipping costs are high, consider joining Faire Insider (monthly fee) so you subsidize free shipping, or negotiate lower carrier rates via a 3PL. Understanding shipping rates is crucial, as 3PLs can help negotiate better rates and offer cost savings through consolidated shipments and expert management. For heavy or fragile items, charge a reasonable shipping fee through Faire’s checkout instead of absorbing all costs.
Slow Turnaround: Late shipments can frustrate retailers. Pitfall: Taking longer than promised. Tip: Set realistic lead times (e.g., “Ships in 2 days”), and ship on time or early. Many Sellers find using a 3PL (which processes orders quickly) improves speed and accuracy.
Inventory Errors: Overselling due to inventory lag leads to cancellations. Tip: Integrate inventory in real time (Faire’s API or 3PL integration). Maintaining order accuracy is essential to avoid cancellations and ensure retailer satisfaction. If an order comes in that you can’t fully supply, use Faire’s “Edit” feature to backorder specific items or quantities instead of canceling the entire order. That way, you still capture part of the sale.
Poor Packaging: Because orders ship in bulk, insufficient packaging can cause damage. Pitfall: Reusing light consumer boxes. Tip: Use sturdy cartons or pallets for bulk orders. Shipping products in bulk to retailers has unique requirements, so ensure packaging meets wholesale standards. Include a clear packing list and your invoice in each carton. Branding or thank-you notes (allowed by Faire) can impress retailers.
Ignoring Faire Tools: Faire offers promotions (free shipping codes, newsletter features) and integration tools. Tip: Link your ecommerce site via “Open with Faire” to drive additional sales, and respond to Faire’s periodic buying events or discount opportunities to boost visibility.
Not Leveraging Data: Retailers value reviews and sales rank on Faire. Pitfall: Listing products and never optimizing. Tip: Refresh products seasonally, add new SKUs often, and encourage retailers to leave reviews (Faire automatically surveys buyers). Sellers may have unique requirements for analytics and reporting to optimize their operations. Engaging in Faire’s marketing (e.g., ads, “New Maker” features) can accelerate growth.

Faire Program Growth & Updates

Faire has grown into a very large ecosystem. Faire reports ~700,000 retail buyers and over 100,000 independent brands active on their platform, and the business is valued at nearly $13 billion. Major publishers like Simon & Schuster have noted selling to ~5,000 stores via Faire, demonstrating its scale. Faire itself has launched new initiatives (e.g., “Faire Insider” buyer program, educational content for retailers) to increase order volume. As order volume grows, managing fluctuations in demand requires robust supply chain management to ensure efficient fulfillment and delivery. The case studies above (e.g., Audrey’s international sales expansion) reflect Faire’s broad reach: the platform serves retailers in “more than 50,000 global cities”. To support global expansion and efficient fulfillment, Faire’s platform and its partners must meet specific requirements, such as adequate warehouse space and experience with various product types. In sum, Faire’s continual fundraising and technology rollouts (API integrations, fulfillment partners, global expansion) underscore that its 3PL-friendly marketplace is active and scaling rapidly, with a focus on supply chain optimization.

What to Look for in a Faire 3PL

Key considerations when choosing a 3PL for Faire orders include:

Advanced Inventory Management Systems: Ensure the 3PL offers real-time inventory tracking to prevent stockouts and overselling.
Seamless Order Fulfillment: The ability to process and ship orders efficiently is crucial for maintaining retailer relationships.
Transparent Pricing: Look for partners with clear pricing structures to avoid hidden fees that can impact your profit margins.
Qualities of an Ideal Partner: Select a partner with experience in Faire fulfillment, strong technology integration, and excellent customer service to meet your business needs.
Value-Added Services: Consider 3PLs that provide value-added services such as kitting, custom packaging, or other specialized solutions to enhance supply chain efficiency.
Greater Customer Satisfaction: Choosing the right 3PL can lead to greater customer satisfaction by improving order accuracy, reducing errors, and enhancing the overall customer experience.

The Role of Logistics in Customer Satisfaction

Effective logistics play a pivotal role in enhancing customer satisfaction by directly impacting the overall customer experience. Efficient handling of orders, timely deliveries, and responsive support contribute to a positive experience for retailers, encouraging repeat business and fostering long-term partnerships. Additionally, efficiency in logistics operations leads to improved outcomes for both retailers and brands, supporting business growth and higher levels of customer satisfaction.

Benefits of Working with a 3PL

Working with a 3PL offers several advantages:

Scalable Solutions: A capable 3PL works closely with its clients to address various aspects of logistics and fulfillment, adapting to your business’s growth and managing increased order volumes without compromising service quality. They also work closely with shipping carriers to ensure timely deliveries and reduce delays.
Operational Excellence: Expertise in fulfillment operations ensures accurate order processing and efficient shipping.
Focus on Core Competencies: Outsourcing logistics allows you to concentrate on product development and marketing strategies.

Responsive, Reliable Customer Support

A customer service agent cheerfully helping a client with telephone support.

Order fulfillment is a complex operation, involving multiple, intricate steps in the process from click to delivery. Things don’t always go as planned, but what is crucial is ensuring that your 3PL has a responsive, reliable customer support team that you can rely on to fix problems fast, with minimal disruption to your business operations.

Experience Working with Faire Sellers

Most traditional 3PLs may not have personnel with the experience and expertise working with Faire to troubleshoot and fix problems fast, costing you precious time and sales. It is important to identify a Faire fulfillment partner with a reliable, responsive customer support team who will be ready to dive in and solve problems quickly, so that you’re always selling and keeping your customers happy.

Here’s what one of our customers had to say about Cahoot’s Support team:

“Cahoot is very responsive and organized in all aspects. Everything is prepared to give anyone the best experience ever. They’re the right partner to help you accomplish your business purpose.”

~ Italian Food Online Store

Speak to a fulfillment expert

So now that we’ve taken a look at the important criteria that guide your choice of a 3PL to support your Faire orders, let’s look at the options that are actually available to you, and the pros and cons of each of them.

Top Faire 3PL Companies

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels, such as Faire, whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels.

Ecommerce Sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels. MCF deploys the same infrastructure and resources that power Amazon’s in-house Fulfilled By Amazon (FBA) logistics network. Sellers seeking FBA alternatives may explore other fulfillment providers.

Pros:

Huge nationwide network: Amazon operates over 1,000 logistics warehouses in the US.

Amazon Fulfillment Centers are well-equipped to handle small and lightweight SKUs. If the majority of your product catalog falls in that category, MCF may be worth exploring.

Cons:

Despite deploying the same logistics infrastructure powering FBA, the fees for MCF can be significantly higher (the reason is obvious: Amazon would like to ensure that its own marketplace takes top priority for merchants and Sellers).

MCF’s pricing is not well suited for heavier, larger-sized, seasonal, or slow-moving SKUs. If your product mix falls into these categories, MCF can become prohibitively expensive.

ShipBob

ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for ecommerce, they have an easy-to-use shipping software platform and a large set of pre-built integrations.

Pros:

Nationwide network of fulfillment centers.

Cons:

Reliance on third-party integrations for order import, or else manual import.

Inconsistent customer support can prove to be a major issue as Nordstrom penalizes Sellers for mistakes, not the 3PL.

Affordable for small and lightweight products but quickly gets pricey for others: ShipBob customers have complained in the past about inefficient packaging choices, for example, using a larger-sized box than may be necessary or sending a shipment in multiple boxes when a single one can be used.

Cahoot: The Best Faire 3PL

Cahoot emerges as a leading 3PL provider for Faire merchants, supporting its clients with specialized Faire fulfillment services tailored to the unique requirements of the Faire marketplace. Their advanced technology integration, real-time inventory management, and commitment to operational excellence ensure seamless and efficient Faire order fulfillment. Cahoot’s Faire fulfillment services are designed for efficiency and accuracy, helping brands meet the unique needs of the Faire marketplace. By partnering with Cahoot, ecommerce businesses can enhance customer satisfaction, streamline their fulfillment processes, and focus on scaling their operations effectively.

Summary

Faire’s wholesale marketplace connects independent retailers with creative brands, offering huge growth opportunities for ecommerce businesses. But with that growth comes new demands for inventory management, order fulfillment, and consistent customer satisfaction. Integrating with Faire’s platform streamlines the supply chain and improves efficiency by enabling seamless order processing, inventory synchronization, and optimized fulfillment workflows tailored to Faire’s requirements. Choosing the right 3PL for Faire orders, one that ensures advanced inventory management systems, seamless order fulfillment, and transparent pricing, can make all the difference in meeting retailer expectations and driving repeat business. Cahoot’s Faire 3PL fulfillment services combine the best of technology and human expertise to help you stand out on Faire’s platform and grow sustainably.

Table 1. Summary of the Faire Marketplace Requirements

Requirement	Faire Wholesale Marketplace Details
Access/Application	Applications are accepted on Faire.com for brands (makers, artisans, distributors). Faire reviews new Seller applications in the order received. Once approved, Sellers set up a Faire shop by uploading their catalog. There is no listing fee to join.
Fees & Commission	Commission: Faire’s standard commission is 15% on reorder sales (after the first order). For a buyer’s first order from a new shop, Faire charges a higher one-time commission (typically 25%). (These fees are automatically deducted from Seller payouts.)
Payment Terms	Faire funds sales on net-30 terms by default. Retailers typically have 60-day credit terms with Faire, but Sellers are paid as soon as they ship goods (payout initiated upon marking the order as shipped). Sellers may pay a small fee (≈3%) to expedite payment. Faire guarantees payment to the Seller even if the buyer defaults.
Integration/API	Optional but recommended: Many Sellers integrate their systems or 3PL with Faire’s API. Third-party 3PLs (e.g., Cahoot) offer seamless integration, automatically syncing orders, inventory, and tracking with Faire. Otherwise, Sellers can manually manage orders via Faire’s web interface. Faire also offers a Shopify integration app for online Sellers.
Product Requirements	Sellers must upload product listings with high-quality images and descriptions. Faire’s listing interface guides Sellers on categories and tagging. Inventory must be updated promptly. Faire has automated “Maker Tools,” but no strict image/size rules are publicly enforced beyond general ecommerce best practices.
Shipping Expectations	Sellers ship accepted orders within the promised lead time (often 1–3 business days to pick/pack). Retailers expect standard ground or LTL freight shipping (Faire covers free shipping to retailers for “Insider” members, otherwise, Sellers can charge a shipping fee via Faire’s checkout). Shipping carriers commonly include UPS, FedEx, USPS, etc. (the key is reliability). Sellers must upload tracking numbers in the Faire portal for each shipment. 3PL partners typically automate this via API.
Packing & Labels	Each wholesale shipment should include: a packing slip (detailing SKUs and quantities), Seller’s branding (optional), and any required documentation (e.g., invoices, MSDS if applicable). Faire buyers appreciate bulk packaging (e.g., shipping cases with inner-packed units). Sellers should ensure products are well-protected for freight transit.
Returns/Customer Service	Faire offers free returns for retailers up to 60 days after delivery (first return window for each order). Faire handles the return logistics on behalf of Sellers (returns are either credited or redistributed via Faire’s Maker Market). Sellers generally do not pay return shipping and do not take back inventory unless Faire explicitly notifies them. Customer service (order cancellations, questions) is conducted through Faire’s platform; Faire mediates disputes, crediting Sellers or buyers as needed.
Fulfillment SLAs	Faire’s official SLAs encourage fast turnaround (often shipping within 1–2 days for in-stock items). 3PLs serving Faire Sellers advertise “fast & accurate” processing to meet retailer expectations. Sellers must honor lead times set on their Faire profile, or order cancellations may occur.
Seller Support/Tools	Faire provides a dedicated brand dashboard (orders, sales analytics, messaging). Sellers can edit orders (e.g., backorder or cancel items) as needed through the portal. Faire also offers optional services like the “Open with Faire” widget (for DTC sales) and promotions via newsletters or ads, though participation is optional.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Faire order fulfillment was meant to be.

Cahoot maintains a nearly perfect 5-star rating across review sites such as Amazon, Shopify, G2, Google, Trustpilot, and SourceForge, among others.

If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, check out our other articles:

1. How to Choose the Best 3PL for Your Shopify Store

2. How to Choose the Best 3PL for Your Macy’s Orders

3. How to Choose the Best 3PL for Target Plus

4. How to Choose the Best 3PL for Wayfair

5. How to Choose the Best 3PL for Nordstrom

Frequently Asked Questions

Why is Faire a great opportunity for wholesale ecommerce?

Faire’s massive retailer network and curated marketplace help brands quickly scale their wholesale business and reach new markets.

What challenges do Sellers face when fulfilling Faire orders?

Faire Sellers must manage bulk orders, maintain accurate inventory, and ensure timely shipping to keep independent retailers happy and coming back for more.

What should I look for in a Faire 3PL?

Prioritize advanced inventory management systems, seamless order processing, transparent pricing (no hidden fees!), and proven experience with wholesale fulfillment.

Why is logistics so critical for Faire?

Retailer trust and repeat business hinge on smooth, accurate fulfillment—if orders arrive late or incomplete, retailers won’t hesitate to find a new supplier.

How does Cahoot support Faire businesses?

Cahoot offers Faire-specific 3PL services that ensure operational excellence, real-time inventory tracking, and seamless integration with Faire’s platform, empowering brands to keep retailers delighted and orders flowing smoothly.

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

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How To Choose The Best Chewy 3PL For Your Orders

Why Selling on Chewy Is Great for Ecommerce Merchants
Chewy Case Studies (Brand Success Stories)
Chewy Seller Onboarding (Step-by-Step)
Common Pitfalls & Pro Tips for Chewy Sellers
Chewy Program Growth & Updates
What to Look for in a Chewy 3PL
The Role of Logistics in Customer Satisfaction
Responsive, Reliable Customer Support
Top Chewy 3PL Companies
Summary
Frequently Asked Questions

Chewy is a leading online pet retailer that recently launched a curated marketplace allowing select third-party brands to sell via drop-shipping. Under this program, vendors list products on Chewy.com but fulfill orders from their own warehouse or a 3PL, shipping directly to consumers. 3PLs play a crucial role in managing order fulfillment as part of the overall supply chain for Chewy Sellers, handling everything from receiving goods to delivering finished products and managing returns. Chewy partners with a commerce platform (Rithum Commerce Suite) to manage these unowned-inventory sales. In mid-2023, Chewy reported working with over 3,500 brands (110,000+ products) through this model. Enrollment is typically invitation-only: Chewy category managers reach out to qualified vendors (often pet-product manufacturers) and guide them through the Vendor Partner Portal (VPP) onboarding. Once approved, Sellers integrate via EDI/API with Chewy’s system (commonly using Rithum’s DSCO platform), which is compatible with various ecommerce and ERP platforms, to synchronize inventory, orders, shipping, and invoicing.

Why Selling on Chewy Is Great for Ecommerce Merchants

Chewy has emerged as a leading pet supply retailer, offering a vast platform for merchants to reach dedicated pet owners. One key benefit for merchants is the ability to connect with customers who are ready to spend money on pet food, food, and other pet products, driving increased sales and revenue. With its user-friendly interface and loyal customer base, Chewy provides an excellent opportunity for businesses to increase sales and expand into new markets. Chewy’s platform is especially effective for brands selling pet food and related food products, as customers are eager to spend money on these essentials.

Chewy Case Studies (Brand Success Stories)

Although still relatively new, Chewy’s marketplace has attracted prominent pet brands. For example, BARK, Inc. announced in August 2024 that it had launched its bestselling toy collections on Chewy, expanding its product lines available to over 20 million Chewy customers. This partnership is described as the first time Chewy carries BARK toys, indicating Chewy’s effort to broaden its assortment with popular brands. Other pet companies have begun testing Chewy’s platform; for instance, BARK’s entry underscores rapid adoption by leading pet vendors. These brands have scaled their operations to handle the increased order volume generated by Chewy’s large customer base, demonstrating their ability to manage high volume efficiently. Chewy’s Pet Vet “Practice Hub” program, launched in 2021, also illustrates the company’s move to partner with third-party Sellers, though that program is targeted to veterinary clinics rather than general consumer brands. These examples suggest Chewy’s third-party channel is actively expanding, though detailed performance metrics per brand are not yet public.

Chewy Seller Onboarding (Step-by-Step)

1. Invitation/Account Creation: Chewy invites you via email to register on the Vendor Partner Portal. Click the link and create a VPP account.

2. Company & Contact Info: Log in to VPP and complete the Company Information and primary contact fields. This data is often prefilled by Chewy’s merchant team, but you must review and complete any missing details.

3. Skip Ordering (Drop-Ship): In “Ordering Information,” you would normally enter your warehouse locations and lead times, but drop-ship vendors skip this step (Chewy handles orders without requiring vendor stock in Chewy’s DCs).

4. Banking & Tax: Provide banking details (voided check or bank letter) for payments, plus contacts for Accounts Payable and Receivable. Fill out tax forms (W-9, etc.) as prompted.

5. Product Catalog (PAF): Download Chewy’s Product Addition Form (PAF) template from VPP. Enter your catalog data (item names, UPCs, dimensions, pricing, etc.) into the appropriate category sheet, then upload the completed PAF back to VPP.

6. E-Sign Documents: VPP integrates with DocuSign. Review and electronically sign all required vendor agreements and compliance documents.

7. Submit for Review: Once all forms are complete, click “Submit” in VPP. The screen will confirm receipt. Chewy’s team will then review your submission.

8. Integration Testing: After approval, you’ll work with Chewy (via DSCO/EDI or API) to test order flow. Chewy may send sample orders and require successful acknowledgment, shipment, and invoicing.

9. Go Live: After passing tests, Chewy grants you live selling access. Your products will appear on Chewy.com, and actual consumer orders will begin.

Note: Throughout onboarding, focus on building a strong relationship with Chewy’s merchant team. A positive relationship helps ensure smooth onboarding, ongoing support, and long-term operational success.

Common Pitfalls & Pro Tips for Chewy Sellers

While Chewy offers significant advantages, merchants may encounter challenges such as strict fulfillment requirements, managing inventory across multiple channels, and ensuring timely deliveries to maintain customer satisfaction. Third-party logistics providers can help Chewy Sellers by managing the entire logistics process, including storage, fulfillment, and distribution, to streamline operations and meet Chewy’s high standards.

Missed Integration/EDI Errors: Failing to set up correct EDI/API connections can delay orders. Many retailers rely on robust integration to streamline order processing and maintain efficient B2B exchanges. Tip: Use a middleware or work closely with Rithum/DSCO support to ensure your EDI maps (850/856/810) meet Chewy’s specs. Test end-to-end early.
Packaging Slip Confusion: Including a generic pack slip can confuse Chewy’s system. Tip: Follow Chewy’s instructions: “Chewy does not use pack slips for drop-ship orders.” Instead, include only a retailer-facing packing list if needed.
Unsupported Addresses: Shipments to P.O. boxes or military APO/FPO addresses will be rejected. Tip: Validate all customer addresses before shipping; use commercial addresses.
Slow Fulfillment: Late shipments hurt your vendor rating. Tip: Chewy demands fast fulfillment (often same-day pick, 1–3 days transit for essentials such as pet food, and 1–5 days transit for non-essential, heavy, or specialized items). Keep inventory ready and use overnight/2-day carriers when needed to meet Chewy’s SLA.
Inventory Sync Errors: Selling out-of-stock items causes cancellations. Effective warehousing is crucial for maintaining accurate stock levels and preventing overselling. Tip: Update your inventory feed or buffer stock to maintain 98–99% in-stock rates. Have a system to quickly edit or cancel orders if you genuinely can’t supply an item.
Quality/Image Issues: Chewy may reject listings with poor images or missing data. Tip: Provide high-resolution product images and complete descriptions per Chewy’s photo and content guidelines (detailed in VPP playbook).
Communication Gaps: Delayed responses to Chewy inquiries can stall your onboarding. Tip: Monitor the VPP “Inbox” for Chewy messages and respond promptly. Build a point of contact on Chewy’s merchandising team.
Pricing Missteps: Avoid setting retail prices too low; Chewy expects competitive but realistic pricing. Tip: Factor in Chewy’s customer base when pricing, and negotiate any MAP policies directly with Chewy’s buyer if needed.
Return Confusion: Unlike consumer marketplaces, Chewy processes returns centrally. Tip: Understand that Chewy “does not take title to refunded items unless returned,” meaning they may not send items back to you. Clarify return instructions with Chewy for any returns that must be shipped back.

Chewy Program Growth & Updates

Chewy’s third-party marketplace is rapidly developing. Rising customer demand has driven Chewy’s investment in expanding its fulfillment capacity, with a focus on increasing shipping capacity and improving delivery performance through automation and transportation initiatives. In 2023, Chewy extended its Rithum partnership to expand drop-ship capabilities. According to Rithum, Chewy’s partner network already included 3,500+ brands and 110,000+ products as of mid-2023. Chewy’s logistics infrastructure, including Chewy Freight Services, supports these scaling efforts and helps handle higher order volumes efficiently. Press coverage (e.g., BARK’s August 2024 announcement) and trade articles highlight new brand launches on Chewy, indicating the program is active. Chewy’s financial filings do not break out marketplace revenue, but analysts note Chewy is emphasizing third-party growth alongside its core retail business. Future validation may come from Seller testimonials or Chewy statements; for now, the launch of flagship brands on the platform is a key indicator of momentum.

What to Look for in a Chewy 3PL

When selecting a 3PL for Chewy orders, consider the following:

Seamless Integration: Ensure the 3PL can integrate smoothly with Chewy’s platform for real-time inventory management and order fulfillment.
Automated Fulfillment Center: Look for partners with an automated fulfillment center that uses advanced automation to handle high order volumes efficiently. Automation reduces the need for manual heavy lifts, improving safety and boosting productivity.
Customized Packaging and Value-Added Services: Choose a 3PL that offers value-added services such as customized packaging solutions, aligning with Chewy’s standards and enhancing the customer experience.

The Role of Logistics in Customer Satisfaction

Efficient logistics are crucial in maintaining customer satisfaction. Accurate order fulfillment, timely deliveries, and responsive customer service contribute to a positive customer experience, fostering loyalty and repeat business.