Picking the right 3PL partner is an important choice when start or running an eCommerce brand. While most 3PL's fee structures are generally the same at a high level, it's important to have a full picture. ShipBob is one of the largest third-party logistics (3PL) providers in the United States. They offer warehousing and fulfillment services to eCommerce brands of all sizes. ShipBob has worked hard to become the first option you think of when you think eCommerce Fulfillment. They advertise everywhere, have a flashy website, and claim to work with 7,000+ brands. While ShipBob's size gives them some advantages, such as access to low-cost shipping rates, their lack of flexibility and poor customer support make them a difficult partner for many small businesses. Also, just because a 3PL is large and has better buying power on packaging, postage, etc doesn't always mean they're going to pass those savings on to you.
Our goal here though is to breakdown their fees as best as we can with publicly available information. We're going to be biased by nature which is why we try to highlight fees and stick to facts.
We'll start with the fees you'll encounter prior to starting and then detail fees to work with them.
There isn't much publicly available information on their onboarding fee and from our research it doesn't seem to be a flat fee that's charged the same for every customer. From a public review with ShipBob affiliate links it appears it can be as high as $975. This fee is the fee you'll pay to open an account and start the process of onboarding. According to ShipBob, this fee covers an "Implementation Engineer" who works with you for the first 30 days.
Note: ShipBob has released a "Growth Plan" which has no onboarding/implementation fee which is available to brands with less than 400 orders a month. You have to onboard yourself with this plan with their public guides, customer support, and some office hours where they try to assist multiple brands at once.
Receiving fees help to cover the work required to verify inventory numbers, inspect them, and put the product away into pickable locations. Receiving is an incredibly important part of the fulfillment process and you want to ensure your 3PL has a thorough process here. If not, it can lead to overselling, lost product, damaged product, etc. ShipBob charges $25 for the first two hours and $40/per person-hour after the first two hours. It can be difficult to know what you'll be paying with hourly fees as there's a lot of factors that go into receiving products.
Storage fees are a significant expense for many eCommerce brands, and it's important to understand how 3PL providers charge for storage. ShipBob charges by location, meaning that each SKU must have at least one unique location to prevent pick errors. ShipBob charges $40 per pallet, $10 per shelf, and $5 per bin per month for storage. It's worth noting that their storage locations are smaller than those of some other 3PL providers (including ours.)
While ShipBob does not have any ongoing account fees, they do charge an onboarding/implementation fee, which varies depending on the customer. Some reviews suggest that this fee can be as high as $975, though there is limited publicly available information on this topic. It's also worth noting that ShipBob has a "Growth Plan" that has no onboarding/implementation fee, but it is only available to brands with less than 400 orders per month. However, with this plan, you don't have access to salespeople or account managers, and you are responsible for self-onboarding and self-support.
ShipBob's growth plan doesn't have any minimum order requirements or spend. With the growth plan though, you don't have access to any salespeople on the frontend or account managers once you get started. It's all self-onboarding and self support.
Returns are an inevitable part of eCommerce, and ShipBob charges $3 per return to cover the costs of return processing, inspection, and restocking. While this fee is reasonable, it's worth considering how it compares to other 3PL providers and whether it may be a significant expense for your business.
ShipBob bundles their pricing for pick/pack and shipping, and doesn't publish it publicly. While they offer 4 free picks per order, each additional pick costs $0.20 per item. If you want to add promotional inserts, marketing materials, coupons, etc., ShipBob requires them to be barcoded and treated as a separate item. There are no additional fees for inserts unless you exceed the 4 free picks per order, in which case you will be charged $0.20 per item.
ShipBob charges $45/person-hour for any special projects that aren't within their standard scope. This makes it difficult to know what you'll be paying as you don't know how efficient the employee is, etc.
Generally 3PLs either bill you for packaging materials at the time of use with a small markup or bundle them into another fee. ShipBob has opted to bundle into their order fee. They do only offer a limited amount of boxes that you can use which can lead to your product going into larger packaging than needed and you paying more based on the dimensional weight. It's important to work with your 3PL to find the best packaging for your product.
When your 3PL is picking a customer order, they generally have to go to multiple bins/locations to retrieve inventory depending on the number of items in that order. ShipBob gives you 4 free picks (included in the order fee) and each additional is $.20 per item after the first.
if you want to add promotional inserts, marketing materials, coupons, etc ShipBob requires you to have them all barcoded and treats them as an item. With that, they are billed as a pick. There's no additional fees for inserts unless you go over the 4 free picks in which case it's $.20 per item after that.
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