How 3PL software prices are built

When you ask for a quote for 3PL software, you do not get a price so much as a formula. The formula decides what happens to your bill when you win a client, add a user or ship a busy week. Two products with the same starting price can end up far apart a year later.

This guide describes the common models and the questions that expose what each one really charges for. It gives no prices, because we have none we could stand behind. You will bring the numbers from your own quotes.

The five models

1. Per user

You pay for each login. Staff on the floor, supervisors, office staff and sometimes client users all count. It is simple to forecast while your team is stable.

What it punishes: a larger team, and giving clients logins. If clients get seats and pay nothing, the cost moves to you.

2. Per order or per shipment

You pay according to the volume of orders processed. It lines up well with your revenue if you bill clients per order too.

What it punishes: spikes. A client with a seasonal rush raises your software bill in the same month your floor is busiest. Ask whether there are tiers, and what happens at the edge of a tier.

3. Per client or per account

You pay for each client set up in the system. It suits a 3PL with a few large clients.

What it punishes: many small clients. If you onboard dozens of small sellers, each one carries a fixed charge, whether or not it generates much revenue.

4. Per site or per warehouse

A flat fee for each building. Easy to predict.

What it punishes: starting with several small sites, and adding a second location before it is busy.

5. One-time build or licence

You pay up front for the software, or for building it, and ongoing costs are limited to support and hosting. A custom build is one option next to buying subscription software: one-time custom build, no per-seat, per-truck or per-client fees. The trade is a larger first payment and responsibility for deciding what to build, set against a cost that does not move when you add users or clients.

Whichever you consider, ask what support costs after the first period and what a future change would cost. A one-time figure only covers what it says it covers.

Many quotes mix models

Real quotes often combine several: a base fee per site, an allowance of users, and a charge per order above a limit. Read the small print to find out which part moves as you grow. The part that moves is the part that matters.

A hypothetical growth story

This is invented, to show the mechanism.

A 3PL starts with 3 clients, 4 staff logins and a few hundred orders a month. A year later they have 12 clients, 9 staff logins, 6 client logins, and several thousand orders a month.

Under each model, ask which numbers changed:

• Per user: logins went from 4 to 15 if client logins count. The bill grows.
• Per order: volume grew many times over. The bill grows with it, and so, presumably, does your revenue.
• Per client: clients grew from 3 to 12, fourfold.
• Per site: nothing changed. Flat.
• One-time: nothing changed except support, if you use it.

The right model for you is the one whose growth driver is least painful for your business. If your revenue tracks orders, a per order fee is fair. If it tracks pallets stored, a per order fee may feel unconnected to your income.

Your worksheet

For each quote, copy this table and fill it in.

The two "double" and "triple" rows do most of the work. Ask each vendor to fill them in, in writing.

Other things that change the bill

• Implementation and data loading. Often separate from the headline price.
• Integrations. Some storefront, carrier and accounting connections are included. Others are extras.
• Hardware. Scanners and printers cost the same whichever software you choose, but check compatibility.
• Price changes at renewal. Ask how increases are limited, and ask in writing.
• Trials and pilots. A pilot costs nothing only if the quote says so. Confirm what happens to your data afterwards.

What not to do

Do not compare only the first month. Do not accept "it depends" without a worked example for your own volumes. Do not sign before you have tested the system with your pretend client, as described in our guide to what a small 3PL needs first.

Next step

Gather two or three written quotes and fill in the worksheet for each. If a vendor will not complete the "double clients" and "triple orders" rows, you have learned something about how they price.