How to Unpack Costs and Find True Value with a 3PL Provider

In the world of logistics, many brands struggle to define their true cost per order and get maximum value from either their in-house order fulfilment or existing 3PL provider.

But tackling hidden costs like utilities, systems, and management time is only one piece of the puzzle.

In this article I’m going to explore how consolidation and transparency can uncover these expenses. And why strong partnerships drive better commercial outcomes.

Open vs. Closed Book 3PL Fulfilment

Understanding cost starts with the contract structure. Most 3PL fulfilment agreements fall into two categories:

• Open Book: This is often considered the “gold standard” for transparency. Every cost, from labour and equipment to facility overheads, is visible to the customer. With the typical addition of a management fee. This model requires "skin in the game" from both parties. The customer must provide accurate forecasting to keep spending on track, while the 3PL must manage resources efficiently.

• Closed Book: While the most common type of account, the costings can be more opaque. In a closed-book scenario, the risk sits entirely with the 3PL. If the 3PL provider mismanages equipment, storage, or activity, the loss comes directly off their bottom line.

Deciding which route to go down requires a two-way conversation. An eCommerce fulfilment partner needs to be up-front about the true value-add of its 3PL services. On the other hand, brands and retailers should ensure they’re supplying high quality data for more accurate forecasting, as well as being open about their current pain points.

The Power of Consolidation and Shared Services

One of the primary ways a 3PL provider helps brands manage costs is through a shared-use site model. By consolidating under one roof, brands benefit from shared services and overheads.

Instead of being dedicated to a single customer, costs for space, personnel, and equipment like mezzanines are split across a larger area and multiple users.

This allows the 3PL fulfilment partner to proportionately allocate costs rather than fully dedicating them, making the solution more competitive for the brand. For smaller shippers, this makes high-end facilities and advanced Warehouse Management Systems (WMS) more accessible, as they only pay for a portion of the facility.

Unlocking Savings Through Data and Whiteboard Sessions

I always emphasise that the process of building the best solution starts with evaluating a brand’s data. The devil is always in the detail and accurate data regarding SKU lines, pallet holdings, and forecasts is crucial for building a commercially viable proposition.

When data is transparent, we can identify specific levers to pull to reduce costs:

• Process Efficiency: Through "whiteboard sessions," we challenge customers to think outside the box. For example, moving from day-one processing to day-two processing can allow for a smaller, more specialised team, lowering the cost for both the 3PL and the brand.
• Carrier Optimisation: In one instance, one of our eCommerce fulfilment customers saved £90,000 in a year by breaking down their volume and utilising different carriers for specific parcel types, such as moving small items from tracked services to more appropriate mail options.​​​​​​​
• Strategic Sourcing: By introducing a specialist leisure retailer to a trusted freight forwarder, we helped them remove £40,000 in costs from their business.

Partnership Over Pricing

While "cost is king," a true partnership goes beyond the lowest price. The market is often filled with noise regarding poor service or high prices. But the reality is that flexibility and listening to customer pain points creates the best solutions.

At Whistl Fulfilment, we view ourselves as an extension of the customer. If we get it wrong, we know we risk the brand's reputation and sales.

By understanding our customer's business model deeply - from their consumer promise to their peak season patterns - we can provide a 3PL fulfilment solution that doesn't just fit but helps them grow.

One good example of this is product sampling, which has dual benefits. Brands can leverage our product sampling agency to increase market reach. Or they can invite other brands to pay to place inserts in products, thereby offsetting fulfilment costs.

This is just another way of demonstrating partnerships in action, while handing the customer a competitive advantage.

Closing Thoughts

Cost will always be an issue. But finding smarter, long-term benefits is often preferential to a race to the bottom.

Ultimately, the goal is always to find a balance where the solution is commercially viable and delivers genuine value for money.

Want to find out more about ‘Fulfilment That Fits’?

Connect with me on LinkedIn and I’d be happy to share what I’m seeing in the market and how Whistl Fulfilment can support your plans.