How to choose a 3PL the checklist before you sign

Start with service fit — does it do what you need, including any special handling. Then assess technology and integration with your store, geographic footprint against where your customers are, track record and references, financial stability, scalability for peak, and how well it communicates. Weigh those alongside price rather than choosing on price alone.

Ask how the integration with your store works and how real-time it is; where the warehouses are; what the SLAs are for cut-off, dispatch, accuracy and shrinkage; what the full pricing covers and what triggers extra fees; how prices escalate after year one; how they handle peak volume; and how either party can exit the contract. Ask for references from similar clients too.

Service-level agreements are the performance standards written into the contract — order cut-off times, dispatch and shipping times, pick accuracy and inventory shrinkage allowances. They matter because they are what you can hold the provider to. Without clear SLAs, 'we'll ship quickly' is a promise; with them, it is a measurable commitment.

Ask for the full fee schedule and map every line: setup, receiving, storage, pick and pack, account management, and anything billed hourly or per project. Confirm pass-through costs like postage and packaging and whether they are marked up, and check the annual price escalation. Review the contract with someone who knows logistics so nothing is assumed to be included that isn't.

Knowing when to use a 3PL is a timing question — whether you have outgrown in-house fulfilment and are ready to outsource. Choosing a 3PL is the next step: once you have decided to outsource, it is how you evaluate and select the specific provider that fits your services, markets and volume.