How to Choose a 3PL: 10 Questions to Ask Before You Sign a Contract
- Eunice Lam
- Jun 1
- 5 min read
So you've decided it's time to hand off your fulfilment to a third-party logistics provider (3PL). Smart move. But now comes the harder part: choosing the right one.
Not all 3PLs are created equal. Some specialise in large retail brands shipping pallets to big-box stores. Others are built for small DTC (direct-to-consumer) brands shipping individual orders to customers. Sign with the wrong partner and you could end up with slower shipping, hidden fees, and a customer service nightmare.
Before you commit to a contract, here are 10 questions every growing business should ask.
1. "Do you have experience with businesses like mine?"
A 3PL that mainly handles B2B wholesale shipments may not be the best fit for a Shopify brand shipping 500 orders a day to individual customers — and vice versa.
Ask specifically about:
Your product category (fragile goods, apparel, food/beverage, etc.)
Your order volume (daily average and peak season spikes)
Your sales channels (Shopify, Amazon, wholesale, or a mix)
What to listen for: Specific examples, not vague reassurances. A good 3PL will be happy to share case studies from similar clients.
2. "Where are your warehouses located, and does it match my customer base?"
Warehouse location directly affects shipping speed and cost. If 80% of your customers are on the East Coast but your 3PL only has a warehouse in Vancouver, your shipping times and costs will suffer.
Key jargon explained:
Shipping zone — The distance between a warehouse and a delivery address, measured in zones 1–8. The higher the zone, the more expensive the shipment. Getting your warehouse closer to your customers reduces your average zone and cuts your shipping costs.
Ask if they offer multi-location fulfilment — splitting your inventory across multiple warehouses to shorten delivery distances across the country.
3. "What does your pricing structure actually look like?"
This is where many businesses get caught off guard. 3PL pricing isn't just one flat fee — it's typically made up of several components:
Fee Type | What It Covers |
Receiving fee | Unloading and checking in your inventory |
Storage fee | Monthly cost per bin, shelf, or pallet |
Pick & pack fee | Cost per item picked and packed per order |
Shipping fee | Carrier cost (sometimes marked up) |
Special handling | Kitting, gift wrapping, inserts, returns |
Ask for a fully-loaded cost example using your actual average order — number of items, weight, destination — so you can compare providers apples-to-apples.
Red flag: Providers who are vague about fees or reluctant to give you a written breakdown before signing.
4. "How do you handle peak season?"
Black Friday, Christmas, Valentine's Day — your order volume can spike 3–5x during peak periods. Ask directly:
Do you hire seasonal staff or use a permanent workforce?
Have you ever had to pause accepting new inventory during peak?
What's your on-time fulfilment rate during your busiest week last year?
A 3PL that can handle 500 orders/day smoothly might crumble at 2,000. Know before you commit.
5. "What technology do you use, and will it integrate with my store?"
Your 3PL's warehouse management system (WMS) needs to talk to your sales platforms — Shopify, WooCommerce, Amazon, etc. — so orders flow automatically and inventory updates in real time.
Key jargon explained:
WMS (Warehouse Management System) — The software a 3PL uses to track inventory, process orders, and manage their warehouse operations. Think of it as the brain of the fulfilment centre.
Ask specifically:
Do you have a direct integration with Shopify (or your platform)?
Can I see real-time inventory and order status through a portal?
How do returns get logged and synced back to my store?
6. "What are your error rates and how do you handle mistakes?"
No 3PL is perfect — mistakes happen. What separates a good partner from a bad one is how they handle it.
Ask for their:
Order accuracy rate (industry standard is 99.5%+)
Damage rate (how often products are damaged in fulfilment)
Process for handling mispicks, mis-ships, and customer complaints
What to listen for: Ownership. A great 3PL will have a clear process for making it right — and will absorb the cost of their own errors.
7. "What does your onboarding process look like?"
Switching to a 3PL isn't plug-and-play. There's a transition period: sending in your inventory, setting up integrations, configuring your SKUs, and training their team on your products.
Ask:
How long does onboarding typically take?
Who is my dedicated point of contact during the transition?
Can you walk me through the first 30 days step by step?
A smooth onboarding is a strong signal that the 3PL is organised and well-run.
8. "What happens to my inventory if something goes wrong?"
This is the question most people forget to ask — until they need the answer.
What happens if there's a warehouse fire, flood, or break-in?
Do you carry cargo insurance, and does it cover my inventory?
What are my rights if I want to leave and move my stock elsewhere?
Key jargon explained:
Cargo insurance — Insurance that covers the value of goods stored or in transit. Some 3PLs include basic coverage; others require you to arrange your own. Always clarify what's covered and up to what dollar amount.
Also check contract terms for exit clauses — how much notice is required to leave, and are there any penalties?
9. "Can I visit the warehouse?"
This one is simple but telling. Any reputable 3PL should welcome a site visit or at minimum offer a video tour.
Walking (or seeing) the facility tells you:
Is it clean, organised, and professionally run?
Are staff clearly labelling and storing inventory correctly?
Does the technology look modern or outdated?
If a provider is reluctant to show you their operation, that's a red flag.
10. "How do you communicate — and how quickly do you respond?"
Once you hand off your fulfilment, your 3PL becomes an extension of your business. When something goes wrong — a delayed shipment, a stock discrepancy, an angry customer — you need answers fast. Not a ticket number and a 48-hour wait.
Ask directly:
Do I get a dedicated account manager or am I contacting a general support inbox?
What are your support hours, and how do I reach someone urgently?
How do you proactively communicate issues — do you flag problems before I notice them?
What to listen for: Specifics. A 3PL that genuinely values communication will tell you exactly who your contact is, how to reach them, and what their typical response time looks like. Vague answers like "we have a great support team" are a warning sign.
Red flag: If getting a straight answer during the sales process is already difficult, it won't improve once you're a client.
The Bottom Line
Choosing a 3PL is one of the most important operational decisions your business will make. The right partner frees you to focus on growth. The wrong one becomes a daily headache that costs you customers and margin.
Take your time, ask these questions, compare multiple providers, and don't let anyone rush you into signing.
Thinking about making the switch?
We'll run a free fulfilment cost comparison using your actual order volume.
No commitment, no pressure, just clarity on whether the numbers
make sense for your business.
Comments