Fulfilment Costs and 3PL Pricing Explained

Did you know that a third-party logistics (3PL) provider can be a strategic move to help you scale and cut costs?

However, many factors make this confusing. Understanding the operational costs associated with a 3PL can inform your decision-making and align your expectations. 

Read our comprehensive guide below to dive into the pricing and gain clarity on your logistics expenses.

What is a 3PL?

A 3PL handles your entire outsourced logistics operation, from the warehouse, picking and packing, to shipping and returns. 

By partnering with a 3PL company, you take a hands-off approach to logistics. This way, you can focus on product development and marketing to scale your business.

Meanwhile, your customers receive fast and reliable delivery options, boosting customer satisfaction and repeat purchases.

3PL services are expanding, and this trend will not slow down. According to Global Market Insights, the industry was valued at $1.5 trillion in 2024.

Businesses are turning to 3PL partners to help them stay afloat in one of the most competitive industries, with Amazon and others dragging customer expectations to an all-time high. 

Key 3PL Pricing Factors

Once you understand the cost breakdown of a 3PL company, you can better appreciate the value a provider actually offers. First, here are the core price factors:

1. Receiving and Storage Fees

Receiving fees cover unloading and inspection costs upon arrival at the warehouse. 

Storage fees, however, are an ongoing cost based on the number of goods stored and the space they occupy. 

Fees may also vary depending on seasonality or the storage duration.

2. Picking, Packing and Shipping

Let’s start with picking. Picking fees cover locating and retrieving items from storage to begin the fulfilment process.

Packing charges are related to packaging materials and labour costs. Material packaging may include eco-friendly materials or custom designs tailored to your brand. 

And now, more than ever, sustainable packaging directly impacts customer satisfaction. According to Sustainability Online, 73% of customers expect recyclable packaging.

3. Shipping and Courier Costs

A large portion of fulfilment often comes from shipping costs. However, many leading 3PL partners negotiate discounted courier fees – saving you money on bulk shipments.

Fees typically factor in the parcel’s weight, dimensions, delivery method, like next-day delivery, and the delivery distance. 

Domestic deliveries charge less than international ones, so a 3PL partner with multiple warehouses, such as MCF, can significantly reduce your delivery costs.

4. Returns

Returns, unfortunately, are inevitable. Many niches experience up to 30% in eCommerce, meaning your returns management system must operate flawlessly.

By flawless, we mean simple, for you and your customer.

When a customer wishes to return an item, you must check its condition to determine whether a restock is required.

Finally, don’t neglect customer service throughout this process. Your customer’s experience will decide whether they repeat purchases or shop elsewhere.

5. Value Services

Lots of brands rely on 3PLs for extra services, such as:

• Building and assembling bundles
• Custom or branded packaging
• Labelling and compliance checks
• Subscription box assembly

Often, these services are charged on a per-project basis. 

MCF Tip: People DO judge a book by its cover. Your package is the customer’s first physical impression of your brand. Thoughtful, quality design boosts customer satisfaction.

6. Technology

A successful 3PL doesn’t settle for dated tech. Fulfilment is a careful process, and top-of-the-range technology creates a seamless process, reducing errors.

Additionally, a modern 3PL will integrate with your eCommerce platform, whether that’s Shopify, Amazon, eBay or another leading platform.

Some 3PLs will charge a one-off integration fee, while others may include this in your monthly management fees.

Common 3PL Pricing Models

Many 3PLs use different billing models. Here are the common payment structures you may see in the UK fulfilment field:

• Pay-as-you-go: Flexible. Based on orders processed. Great for SMEs or startups.

• Per-order or per-unit pricing: Charge per order. Volume discounts.

• Monthly minimums: A flat fee with warehouse space and service.
• Hybrid models: Fixed storage with variable handling.

SMEs and startups often prefer pay-as-you-go or per-order pricing for predictability. Large companies with mass orders will negotiate hybrid models.

What Influences 3PL Costs the Most?

While these payment structures provide clarity, exact costs vary because many variables change in fulfilment. 

• Order volume: More orders equal lower per-unit costs.

• Complexity: Companies with complex orders to pick, package and process pay more than those with simple products.

• Product type: Any fragile or large items may affect and increase the handling and shipping costs.

• Seasonality: Brands with large orders during Black Friday and Christmas will incur higher costs for additional temporary storage.

• Delivery promises: Next-day or special delivery services increase courier spend.

Why Outsourcing Fulfilment Saves Money

While startups at the early stage may handle fulfilment in-house, outsourcing can save scaling companies significant money. 

Consider the costs you would incur if you handled fulfilment yourself:

• Warehouse rent
• Warehouse utilities
• Staff salaries and training
• Staff management
• Packaging 
• Software and technology
• Higher courier fees
• Admin overhead

And it doesn’t take an expert mathematician to see these costs add hundreds of thousands to your overheads.

A 3PL relieves these expenses and hassles, combining them into a single service, ready to help scale your business. 

The perfect fulfilment partner is a long-term investment in growth.

How to Choose the Right 3PL Partner

As one of the UK’s leading 3PLs, we have some tips to help you partner with a fulfilment company that will revolutionise your customer experience and directly increase your revenue.

1. Pricing transparency

This one is simple: There shouldn’t be any hidden fees in your monthly payments. All fees must be laid out, so you know where your money goes every month.

Don’t let a 3PL company add unjustified or unmentioned expenses to your invoice every month. 

2. Technology stack

Does their technology integrate with your platform and sales channels? If not, start looking elsewhere. You shouldn’t have to move platforms for your 3PL partner.

Remember: it should lighten your operations and workload, not add time-consuming tasks.

3. Scalability

When you start your eCommerce business, the potential is endless. A top 3PL partner can accommodate your growth, increase orders and meet customer demands. 

Can they handle your growth ambitions? Check their track record. Enquire about warehouse and storage space.

These are key indicators.

4. Social proof

Research their case studies for successful stories and outcomes. Read reviews on Trustpilot and Yelp. Reach out to previous clients with any burning questions.

A background check can be a strong way to gauge reliability and efficiency.

Why Choose MCF?

MCF partners with leading retailers like The Range and Wilko to deliver excellence. Here’s why startups and established brands choose MCF:

• Transparent pricing – No hidden fees. Predictable billing keeps you on top of your overheads.

• Works with all brand sizes – MCF helps unlock growth potential for small and large brands, so you never hit a ceiling.

• Top technology – Easy integration with your platform and data-driven optimisation to help you scale.

• Proven results – 99.8% pick accuracy. 99% processing timelines. 99% orders without defect. An error-free system creating top-tier customer experiences.

Take Your Fulfilment to the Next Level!

Are you ready for transparent pricing and scalable fulfilment solutions? 

Let MCF simplify your fulfilment operations. Contact us today for a FREE quote and streamline your fulfilment process, saving you time and money.