Here’s an unpopular opinion for ecommerce professionals and logistics experts: single-location 3PL service providers are officially obsolete. Yes, dead, done, over. Like MySpace and dial-up internet. If your brand still uses a third-party logistics company that operates from just one warehouse, you’re not just “behind the curve.” You’re actively lighting your margin on fire. Let’s walk through the realities that no one talks about, but everyone feels.

The False Promise of Simplicity: An Unforgiving Supply Chain Reality

At face value, single-location warehousing services seem harmless enough. They promise simplicity, one point of contact, straightforward inventory management, and easy oversight of logistics operations. But beneath this veneer of simplicity lies a costly nightmare that impacts your transportation management, shipping process, and ultimately, your brand reputation.

Think shipping zones don’t matter much? Think again. This kind of setup assumes your customers all live within a few hundred miles of your warehouse. But they don’t. Shipping costs explode exponentially as delivery distances stretch across multiple zones. A single-location warehouse in North Dakota, for instance, might seem like a cost-effective transportation hub until you’re shipping to Florida, Texas, or California. Suddenly, those competitive rates vanish, leaving you holding a massive freight bill.

Real example: Everlane, the popular consumer goods brand known for transparency, learned this the hard way. When their primary 3PL provider operated out of a single West Coast facility, they faced increased logistics costs shipping to customers in the Eastern U.S., ultimately hitting their bottom line. Lesson learned: multi-location logistics services aren’t optional; they’re essential.

Reverse Logistics and Returns Management Woes

Single-location providers also magnify reverse logistics challenges. Returns management isn’t just about getting products back on shelves; it’s about speed and efficiency. Imagine you’re a New York customer sending returns to a facility based in California. That slow, cumbersome shipping process not only irritates customers but also inflates your costs.

By contrast, comprehensive services from multi-location providers enable efficient deliveries and quick turnarounds on returns. Brands like Zappos have excelled precisely because their reverse logistics and inventory management processes are supported by strategically placed distribution services across North America.

Machine Learning and Advanced Technology Are Game Changers

Here’s another one: advanced technology and artificial intelligence are transforming logistics. Multi-location 3PL providers are adopting sophisticated machine learning tools and real-time tracking to enhance efficiency, something a single-location operator struggles to replicate.

That gap gets wider every year. Take Uber Freight, for example, leveraging data points and AI-driven transportation management systems to optimize routes, manage inventory, and predict logistics bottlenecks. Single-location warehouses? They’re largely stuck still using spreadsheets. Still calling carriers to schedule pickups. Still guessing. If your provider isn’t riding that wave, you’re drowning.

The Cost of Ignoring the Multi-Location Advantage

Let’s make this concrete with some hypothetical (yet highly realistic) numbers. Suppose your ecommerce fulfillment provider operates solely from a warehouse in Philadelphia, fulfilling orders nationwide. You might pay $6 per shipment within Zone 2, but shipping to Zone 8, that cost easily jumps to $15 or more. Average blended cost: ~$10. Multiply by 500 orders/day = $5,000/day. Now imagine you could fulfill half those orders from a second or third location closer to your customers, cutting them back to $6. That’s a $2,250/day savings, or $675,000/year.

You’re not just wasting money. You’re tanking your CAC:LTV ratio and crippling your ability to scale.

Brands embracing multi-location third-party logistics providers, like Robinson’s Services, known for tailored solutions across an extensive network, reduce these zone-related costs dramatically. They keep stock levels optimized and customers satisfied.

“But Isn’t One Location Easier?” Nope. It’s Dangerous.

This is the most common pushback we hear.

“A single warehouse is easier to manage. It keeps my ops team sane.”

“Sure, until you:”

• Lose a day of shipping due to weather or staffing
• Run out of stock in peak season
• Watch competitors deliver in 2 days while you take 6

Operational simplicity at the cost of competitiveness is not simplicity, it’s slow-motion suicide.

Brands Need Tailored Solutions, Not One-Size-Fits-All

Third-party logistics services should offer tailored solutions to meet unique business needs. Asset-based or non-asset-based providers offering comprehensive services like freight forwarding, customs clearance, intermodal transport, and cross-docking have a massive advantage. Single-location providers simply can’t compete with these comprehensive solutions.

Even consumer brands like Peloton, Casper, and Glossier have shifted from relying on singular distribution centers to embracing sophisticated logistics expertise across multiple locations, because it’s more effective and ultimately more profitable. As they scaled, they shifted away from single-node fulfillment to multi-location strategies that:

• Decreased zone-related costs
• Improved delivery speed
• Boosted post-purchase satisfaction
• Reduced returns friction

They invested early in supply chain design and reaped long-term loyalty because of it.

The Brand Death Spiral: A 3-Year Lifecycle of Regret

Let’s break this down.

Year 1: You launch. Orders trickle in. A single-location 3PL seems fine. You’re lean, you’re scrappy, and delivery speed isn’t a crisis… yet.

Year 2: You scale. TikTok hits, ad ROAS spikes, and now you’re shipping 1,000+ orders a day, nationwide. Delivery times stretch to 6–8 days for half of your customers. Negative reviews start stacking up. Your product rating goes from 4.2 stars to 3.9 on Amazon.

Year 3: The dip in reviews becomes a conversion problem. Organic sales slow. You’re forced to crank up the advertising wheel and throw discounts at unhappy customers just to keep revenue steady. Now your margins are gone. And worse? Those customers may never come back.

End of Year 3: You scramble. You finally start looking into a multi-node logistics provider like Cahoot, but by now, recovery is uncertain. Rebuilding trust with customers you lost is hard. Winning back ROAS is expensive. You’re bleeding out and hoping it’s not too late.

Bold Prediction: The End of Single-Location 3PLs

By 2027, single-location 3PLs won’t just be outdated, they’ll be absorbed, shut down, or relegated to hyper-local niche markets like hyper-local delivery or bulky item storage. Why? Because the economics just don’t work anymore. Logistics has become a national sport, and the players without reach won’t survive.

In a world with 2-day shipping expectations, AI logistics, labor shortages, and tariff volatility, geography is strategy. And single-location providers can’t compete.

Why Cahoot Was Built for This Future

At Cahoot, we saw this coming years ago. We didn’t build a shipping label tool. We built a fulfillment cost optimization platform powered by a nationwide network of high-performing nodes with intelligent orchestration.

What does that mean for you?

• Orders get shipped from the right location
• Return labels are smart, not manual
• Zone math works in your favor
• Fulfillment cost becomes a lever, not a burden

This isn’t just about surviving Q4 or shaving pennies off your shipping rates. It’s about building a logistics backbone that actually grows with your business.

We firmly believe single-location 3PL service providers no longer serve the rapidly evolving needs of ecommerce brands. Our solution is designed for today’s realities, offering extensive network reach across North America, machine learning-driven transportation management and freight brokerage, and cost-effective transportation. We fulfill orders quickly, streamline logistics operations, and reduce overall shipping costs. The result? Improved customer satisfaction, stronger supply chain management, and scalable growth.

Bottom Line: Adapt or Fade Away

So here’s the blunt truth: if you’re still relying on a single-location 3PL, you’re not being conservative. You’re being reckless. You’re betting your future on a fragile supply chain, slower delivery windows, and rising transportation costs in the middle of a macroeconomic hurricane.

This isn’t alarmism. It’s logistics truth.

You don’t need more warehouse space. You need smarter fulfillment. And it starts with a multi-node mindset.

The future is clear: multi-location logistics is the only viable path forward. Embrace this reality now, or watch your competitors speed past you.

Frequently Asked Questions

What exactly is a single-location 3PL provider?

A single-location third-party logistics (3PL) provider operates from only one warehouse facility, handling all inventory management, order fulfillment, and logistics services from that single point, as opposed to multi-location providers who operate several strategically placed warehouses.

Why are shipping zones so critical to fulfillment cost?

Shipping zones directly affect the total cost of delivery: the further the shipment travels from a warehouse, the higher the shipping costs. Single-location 3PL providers often face higher average shipping costs because their warehouses can’t be geographically optimized, whereas multi-location providers reduce costs through shorter delivery distances.

Can single-location logistics services effectively manage reverse logistics?

Generally, no. Reverse logistics is about speed, efficiency, and minimizing transportation costs. Single-location 3PL providers, due to their limited geographic coverage, typically struggle with timely and cost-effective handling of returns, negatively impacting customer satisfaction and operational efficiency.

What advantages do multi-location 3PL providers offer over single-location providers?

Multi-location third-party logistics providers offer reduced shipping times, lower shipping costs, better scalability, enhanced customer satisfaction, advanced technology such as machine learning, and the ability to strategically manage inventory across diverse regions, providing brands a strong competitive edge.

How can a multi-location logistics strategy increase customer satisfaction?

A multi-location strategy ensures faster and more reliable final-mile deliveries by positioning inventory closer to customers. Faster delivery speeds translate to better customer experiences, fewer returns, and stronger brand loyalty, all contributing to higher overall customer satisfaction.

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.

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

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.

ShipBob

ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order 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 shipping software and a large set of pre-built integrations.

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

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.

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.

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.

Benefits of Working with a 3PL

Partnering with a 3PL offers numerous benefits:

• Operational Efficiency: Streamlined processes and advanced technologies improve order accuracy and reduce shipping times.
• Cost Savings: Outsourcing fulfillment can lower fixed costs associated with maintaining your own warehouse and staff.
• Scalability: A reliable 3PL can adapt to your business’s growth, handling increased order volumes seamlessly.
• Comprehensive Fulfillment Package: Leveraging a complete fulfillment package from a 3PL can further streamline operations and improve scalability.

Responsive, Reliable Customer 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 Chewy Sellers

Most traditional 3PLs may not have personnel with the experience and expertise working with Chewy to troubleshoot and fix problems fast, costing you precious time and sales. It is important to identify a Chewy 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’s support is prompt and personal, not monolithic and apathetic as some large companies tend to be. Cahoot is not only a great 3PL provider but also a strategic partner that goes above and beyond for its clients. They are a 5-star team of people who make it their business to care about yours.”

~ VERSACART

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 Chewy orders, let’s look at the options that are actually available to you, and the pros and cons of each of them.

Top Chewy 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 Chewy, 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.

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.

Cahoot: The Best Chewy 3PL

Selling on Chewy offers ecommerce businesses a powerful opportunity to reach millions of pet owners and expand into new markets. However, fulfilling Chewy orders comes with unique challenges, from meeting strict shipping expectations to navigating complex packaging and returns rules. Choosing the right Chewy 3PL partner is essential to ensure the channel contributes meaningful revenue growth with minimal babysitting.

Cahoot stands out as an ideal 3PL partner for Chewy merchants. With a large network of fulfillment centers and a focus on operational and cost efficiency (e.g., placing inventory closer to customers and using intelligent cartonization to keep shipping costs as low as possible), Cahoot ensures accurate order fulfillment and timely deliveries. Their commitment to customer satisfaction makes them a top choice for ecommerce businesses aiming to scale and succeed in the pet supply market. More specifically, their specialized Chewy 3PL services and deep understanding of the pet supply retailer’s platform make them the ideal partner to support your growth and profitability.

Summary

Table 1. Summary of the Chewy Marketplace Requirements

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 Chewy order fulfillment was meant to be.

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 Chewy a good platform for ecommerce retailers?

Chewy provides access to a large, loyal audience of pet owners who value convenience and fast shipping. This opens up new revenue streams and markets for ecommerce businesses.

What are the key challenges of fulfilling Chewy orders?

Sellers face strict packaging and shipping SLAs, complex returns processes, and the need for accurate inventory management to maintain customer satisfaction.

What should I look for in a 3PL for Chewy?

Look for expert knowledge of Chewy’s systems and requirements, efficient and ultra-fast fulfillment while containing costs, and proven capabilities in real-time inventory and order accuracy.

Why does logistics matter so much for Chewy orders?

Chewy’s customer experience hinges on fast, accurate deliveries. Logistics is critical to boosting customer satisfaction, loyalty, and long-term sales.

How can Cahoot help me fulfill Chewy orders?

Cahoot offers robust Chewy 3PL services, blending cutting-edge automation and transportation initiatives with real-time order fulfillment and responsive support, ensuring that your customers (and their pets!) are always happy.

Handling ecommerce order fulfillment in-house (DIY) often seems like the logical choice for businesses that want control over their operations. However, the true costs of a do-it-yourself (DIY) approach can quickly add up, and many of the expenses are not immediately obvious.

The most common in-house fulfillment costs include warehouse space, labor, packaging, shipping, and general operational overhead. Leasing or buying a warehouse, outfitting it with equipment like shelving, forklifts, pallet jacks, packing stations with computers and printers, plus covering utility bills, is just the beginning. On top of that, hiring, training, and managing employees to handle picking, packing, and shipping orders is a continuous commitment. Seasonal spikes in demand can make staffing both challenging and costly. Other factors, such as purchasing packaging materials and paying carrier fees, further contribute to the overall liability. Specific fees are often calculated based on estimates and rates applied by fulfillment companies.

Take a simple example: an ecommerce business processes 10,000 orders each month and spends $20,000 on rent, labor, and supplies. This puts the cost per order at $2. Adding an average shipping fee of $10 per package brings the total fulfillment cost to $12. If the average order value is $60, the cost of fulfillment alone eats up 20% of the sale price. These figures don’t even account for the cost of fulfillment defects, reverse logistics, software and technology investments, insurance, equipment maintenance, in-house or outsourced accounting staff, or the opportunity cost of time spent managing logistics rather than growing the business. Additionally, it’s important to estimate storage costs based on cubic feet for determining monthly expenses. Storage fees are typically applied monthly by 3PLs per cubic foot.

Introduction to Fulfillment

Fulfillment refers to the process of getting products from a warehouse to a customer’s doorstep, involving inventory management, packing, and shipping. It is a central aspect of ecommerce businesses, as it directly affects customer satisfaction and loyalty. Fulfillment costs, including warehousing, packaging, and shipping expenses, can significantly impact a business’s bottom line. Understanding fulfillment costs and fees is essential for businesses to make informed decisions about their logistics and supply chain management. A cost calculator can be a useful tool for estimating fulfillment costs and comparing prices among different fulfillment services.

Fulfillment Centers and Costs

Fulfillment centers are warehouses where products are stored, packed, and shipped to customers, and they can be operated by businesses themselves or outsourced to third-party logistics (3PL) providers. The costs of operating a fulfillment center can be significant, including expenses such as labor, equipment, and rent. Businesses should consider the costs and benefits of operating their own fulfillment center versus outsourcing to a 3PL provider. A fulfillment center can provide businesses with more control over their inventory and shipping, but it may also require significant investments in equipment, staff, and technology. The cost of shipping and handling can also vary depending on the location and capacity of the fulfillment center.

Why 3PLs Can Offer a Cost-Effective Solution

Third-party logistics (3PL) providers often outperform in-house fulfillment when it comes to cost-effectiveness. By working with many brands and retailers, 3PLs achieve economies of scale that most businesses can’t match. And while additional fees may apply for specific services such as protective packaging for fragile items and fees related to hazmat storage and peak season storage, they can be lower than your own costs, and may not even apply to you.

One key reason for their cost advantage is their strategically located warehouses. By positioning fulfillment centers near major cities, 3PLs can reduce shipping distances and “final mile” shipping costs. These providers also negotiate bulk shipping discounts with carriers, which aren’t typically available to smaller businesses shipping lower volumes. Savings also extend to shipping supplies, as 3PLs purchase mass quantities of boxes, mailers, and void fill in bulk and pass those lower costs on to their clients. Their pricing models offer full transparency, providing a clear breakdown of costs without overwhelming customers with complex pricing tables. Additionally, there are no hidden fees in 3PL pricing, ensuring customers pay only for the services they use.

Another benefit of 3PL partnerships is the advanced technology they typically use. Their systems are designed to streamline operations, from inventory management and order tracking to automated shipping processes that ensure fulfillment accuracy. For businesses managing fulfillment in-house, replicating these technologies would require a significant investment, not to mention the expertise needed to run them effectively. 

For instance, let’s say an ecommerce business transitions from in-house fulfillment to a 3PL. If their DIY fulfillment cost per order was $12, a 3PL might offer the same service for $8 per order, thanks to better shipping rates and operational efficiencies. Over time, these savings add up substantially, and they only get better as businesses grow. Saving $4 per order across an average 10,000 orders per month is half a million dollars per year!

Understanding Fulfillment Fees

Fulfillment fees are charges associated with the processing and shipping of orders, and they can vary among different fulfillment service providers. These fees may include costs such as receiving, storing, picking, packing, and shipping, as well as additional services like returns processing and customer support. Businesses should carefully review the fulfillment fees and terms of their service provider to ensure they understand all the costs involved. A cost calculator can help businesses estimate their fulfillment fees and compare prices among different providers. It is essential to consider all the factors that affect fulfillment fees, including the type and weight of products, packaging materials, and shipping destinations.

Factors Affecting Fulfillment Costs

Fulfillment costs can vary depending on several factors, including the type and weight of products, packaging materials, and shipping destinations. Additional fees may apply for services such as gift wrapping, express shipping, or storage during peak seasons. The number of orders, units, and pallets can also impact fulfillment costs, as well as the level of customization required for packaging and shipping. Businesses should consider these factors when calculating their fulfillment costs and choosing a fulfillment service provider. A fulfillment fee is typically charged per unit or order, and it may include costs such as labor, materials, and shipping expenses.

Strategic Advantages of Partnering with a 3PL

Outsourcing fulfillment doesn’t just save money; it also provides strategic benefits that can help businesses expand and grow. One of the most significant advantages is the ability to scale fulfillment capacity up and down as volume changes. As an ecommerce business expands, for example, managing fulfillment in-house often requires more warehouse space, additional staff, and higher overhead costs. A 3PL, however, is already equipped to handle growth organically. Whether it’s a seasonal surge or a long-term increase in orders, 3PLs can adjust seamlessly to meet an ecommerce business’s needs.

Another advantage is faster and more efficient shipping, leading to faster and cheaper delivery to customers. Many 3PLs operate a nationwide network of fulfillment centers, allowing their clients to store inventory closer to their customers. This reduces transit times and shipping costs while improving customer satisfaction and encouraging loyalty and repeat business. Offering two-day delivery (or better) becomes much more feasible when orders are shipped from regional warehouses rather than a single central location. Additionally, 3PLs can cater to specific requirements, such as special storage conditions and packaging materials, ensuring customized services tailored for individual businesses.

Advanced technology integration is one more area where 3PLs excel. They make it easy to connect to, and support, omni-channel Sellers, automating order routing, distributed inventory management, tracking notifications, and even shipment exception visibility and handling. The risk of errors is diminished and visibility is enhanced with these technologies, saving businesses from having to manage customer service WISMO messages (“Where Is My Order?”), and decreasing the number of returned orders, letting them focus on other areas of their operation.

Comparing Costs and Potential Savings

To decide whether outsourcing to a 3PL is the right move, businesses need to conduct a detailed review of their current costs and compare them to the estimates of what a 3PL would charge. This means tallying up all in-house expenses, including facilities, labor, storage, shipping supplies, and shipping postage, and then factoring in indirect costs such as time spent managing logistics, customer service, equipment costs (one-time and ongoing maintenance and supplies), and software.

Most 3PLs charge for receiving inventory, storage, picking and packing, materials, and shipping costs. While these fees might seem high at first glance, the savings they offer in carrier rates, packaging, and operational efficiencies often more than offset them. Businesses should also consider indirect savings like freeing up internal resources to focus on product development or marketing instead of logistics.

For example, a business spending $20,000 a month on in-house fulfillment might find that outsourcing to a 3PL reduces that figure to $14,000, saving $6,000. These savings can then be reinvested into growing the business or improving the customer experience (or taking a vacation). Over time, the reduced stress and increased operational efficiency that come with outsourcing ecommerce order fulfillment can have a big impact on the overall health of the business.

Use the table below to enter your monthly DIY order fulfillment costs and compare them to the average 3PL charges that can be expected from the average usage of each item. Make some assumptions, such as the number of hours spent on inventory prep, time spent on B2B operations, whether inventory will be shipped to a 3PL directly from suppliers or processed locally first, the cost of order fulfillment defects and subsequent returns, ergonomics, worker injuries, etc. The 3PL average costs below assume that products are standard size, as defined by Amazon FBA. Be sure to include all relevant details to get an accurate comparison.

Best Practices for Fulfillment

To optimize their fulfillment operations, businesses should consider implementing best practices such as streamlining their inventory management, using efficient packaging materials, and providing clear shipping instructions. It is also essential to monitor and analyze fulfillment costs and performance regularly to identify areas for improvement. Businesses should consider using a cost calculator to estimate their fulfillment costs and compare prices among different service providers. Providing excellent customer service and support is also crucial for building customer loyalty and trust. By following these best practices, businesses can improve their fulfillment operations, reduce costs, and increase customer satisfaction.

Why Partnering with a 3PL Makes Sense

The decision to outsource fulfillment to a 3PL goes beyond cutting costs. It’s about positioning the business for long-term success. By working with a 3PL, businesses gain access to resources and expertise that would be expensive or impossible to build in-house. From advanced technology and strategic warehouse locations to robust carrier relationships, 3PLs provide the tools needed to compete in a complex ecommerce environment, with financial feasibility universally covered.

Outsourcing also allows businesses to focus on what they do best. Rather than worrying about packing boxes or negotiating with carriers, they can direct their energy toward areas that drive revenue, like creating new products or improving customer engagement and loyalty, which leads to increased customer lifetime value. In today’s interconnected world, partnering with a 3PL ensures that businesses can scale their operations globally, leveraging international logistical solutions and real-world data.

Final Thoughts

Choosing between in-house (DIY) fulfillment and outsourcing to a 3PL requires careful thought. While managing fulfillment internally offers control, it often comes with hidden costs and challenges that can limit growth. On the other hand, 3PLs may limit control, but they provide cost efficiencies that often reduce the overall cost of fulfillment operations while also supporting the ability to scale effortlessly with a pay-as-you-go model.

Ultimately, the best choice depends on a brand or retailer’s unique needs and goals. A wide range of services offered by 3PLs allows for customization and transparency in pricing based on specific business requirements. For many, partnering with a 3PL is the smarter move because it eliminates the mundane, routine work by offloading it to professionals at a predictable cost. By outsourcing fulfillment, businesses can save money, improve efficiency, and focus on what really matters: delivering exceptional value to their customers and boosting their ability to sell more effectively.

Frequently Asked Questions

What expenses should I include when estimating DIY fulfillment costs?

When calculating in-house fulfillment costs, account for warehouse rent or mortgage; utilities; shelving, forklifts, and packing-station equipment; labor for picking, packing, and management; packaging materials; carrier fees; software subscriptions; insurance; and maintenance. Don’t forget indirect costs like returns processing, fulfillment errors, and the opportunity cost of time spent on logistics.

How do I calculate my cost per order for DIY fulfillment?

Tally your total monthly fulfillment expenses—rent, labor, supplies, and shipping postage—and divide by total orders processed. For example, $20,000 in monthly costs for 10,000 orders yields a $2 cost per order before shipping. Adding an average $10 shipping fee brings total fulfillment cost to $12 per order.

How can a 3PL provider lower my fulfillment costs?

3PLs leverage economies of scale: they negotiate bulk shipping discounts, purchase packaging in volume, and deploy strategically located warehouses to cut final-mile fees. Their advanced fulfillment technology automates inventory management and shipping, driving down per-order costs compared to a small-to-mid-sized business handling fulfillment internally.

What strategic advantages do 3PL partnerships offer beyond cost savings?

Outsourcing to a 3PL provides scalable capacity—seamlessly handling seasonal spikes without extra facility leases or staffing. A distributed network of fulfillment centers shortens transit times, enabling faster delivery and boosting customer satisfaction. Plus, integrated order-management systems reduce errors and free your team to focus on growth activities like marketing and product development.

How do I compare my DIY fulfillment costs to 3PL quotes?

Create a comprehensive cost model listing all in-house expenses: facilities, labor, supplies, software, and overhead. Then gather 3PL pricing for receiving, storage, pick & pack, materials, and shipping. Compare total monthly DIY vs. 3PL costs side by side—factoring in hidden savings like reduced WISMO customer inquiries and fewer returns—to determine the best fit for your business.