Be Careful of These Common Practices That Can Cost You Dearly
We wish it weren’t the case, but unfortunately most 3PL companies aren’t fully transparent and straightforward when it comes to 3PL pricing. Fortunately, we’ve compiled a list of a handful of things to watch out for when comparing the rates of different companies.
There Will Be No Standard
It would be extremely easy to compare different options if all companies presented their pricing the same way. Unfortunately, almost all companies will use different pricing models. This makes it almost impossible to do an “apples to apples” comparison. We recommend that you take the power back by asking each 3PL company to provide you a “what if” analysis. Basically, in addition to their proposal, ask them to provide you with a mock invoice using certain assumptions about an average month for your business. This way, you’ll get a fully loaded price from each of the vendors, which makes comparison shopping easy.
Be Aware of the Most Common Deceptive Tactic
We’ve seen it happen all too often – a 3PL firm provides a company a quote with only a couple of fees – all of which are extremely low versus the competition. This is what we refer to in the industry as the “shell game.” Many times 3PL’s will try to gain a pricing advantage by giving you a couple of low rates (especially pick and pack fees), only to later charge you much higher rates in other areas after you commit to working with them. One of the most common areas where they hide fees are in the difficult to measure shipping costs. Ask for specific 3PL pricing to uncover any discrepancies.
Ask For a Complete Listing of Pricing
We help many companies each month that ended up choosing a fulfillment company only to find that once they starting using the services, their bill was much higher than anticipated. Come to find out, they weren’t shown every price they might potentially incur. So when they got their invoice, which was a mile long, all of these miscellaneous charges added up to a hefty bill. Make sure that you have each company provide you a complete listing of all 3PL pricing.
We’re Here to Help You
Ultimately, this is one of the biggest reasons that we exist – to help you answer questions about the different alternatives and to get you FREE price quotes from multiple 3PL companies so that you can make the best decision for your organization.