Chad Michael Carleton's Profile
Chad Michael Carleton
Recent Messages
#logistics-operations - July 23, 2025 at 05:23 PM
Man I would hit up @Matt Hertz - ThirdPerson.co for the right 3PL. Tidal Wave 3PL might have this available
#logistics-operations - June 30, 2025 at 08:19 PM
I know the folks at Wonderpack.eco pretty well. Great fulfillment co
#logistics-operations - June 26, 2025 at 07:51 PM
Concur that @Matt Hertz - ThirdPerson.co is a great resource here
#logistics-operations - May 29, 2025 at 01:53 AM
PREACH MATT
#logistics-operations - May 27, 2025 at 03:01 PM
Looks like 15-20%
#logistics-operations - May 06, 2025 at 12:45 AM
Those are steep markups. What service is that for?
#general-chat - April 29, 2025 at 03:45 PM
Eh. Not me
#tech-talk - April 22, 2025 at 11:17 PM
ShipHero has a shipped items report and a cogs report that will work.
#jobs-and-talent - April 20, 2025 at 03:28 PM
Thanks Deb!
#logistics-operations - April 15, 2025 at 12:59 PM
All that said, I’d love someone to chime in and tell me I’m wrong 😅
#logistics-operations - April 15, 2025 at 12:57 PM
If you’re sub 3-5lbs, you’re a ways away from anything meaningful.
The landscape has changed in recent years. Used to be volume got discounts and low volume was outrageous.
UPS and USPS then rolled out programs like the one you’re shipping on in order to get small shippers moving volume. Those programs aren’t available to larger companies though, they’re locked to generally less scalable software — Shiphero is our WMS and it has all the bells and whistles we’d ever need to ship 10,000 packages a day, but no built-in carrier rate discounts.
In effect, the barrier to decent rates is now lower than ever, but the gap between those rates and any meaningful additional discount is much wider.
To answer your question, probably 300/day and you’d see some meaningful discount options by going direct to the carrier. At that point you’re probably using a 3PL whose negotiated rates are comparable or slightly better.
#logistics-operations - April 15, 2025 at 12:50 PM
I’d say the juice isn’t worth the squeeze to be honest
Pirate ship rates are pretty close to the floor at that volume
#logistics-operations - April 15, 2025 at 12:49 PM
What’s the gross volume on a daily and monthly basis?
#logistics-operations - April 15, 2025 at 12:48 PM
No direct experience, but I’d say there’s a high likelihood that the rates are almost identical. The UPS rates you see in ship station, and Shopify and other reselling platforms are typically from their digital access program. They don’t feviste much from one to the next.
#logistics-operations - April 11, 2025 at 03:48 PM
We’re on the 3PL side and we have a client using it right now. It’s been like magic for reconciliations, inventory accuracy, PO inbounding, cost of goods tracking.
I came from the retail side with a full blown ERP tracking 15,000 sku’s and 150 vendors.
We have several clients rolling out netsuite, or abandoning the rollout 3/4 of the way through.
Good Day implemented within 30 days, just ahead of Q4 craziness, which we felt was risky. They pulled it off without a hitch.
I’ll admit I’m a fanboy at this point.
#tech-talk - April 04, 2025 at 08:33 PM
The discounts will be comparable. These are standardized discount programs offered by carriers. However, they’re essentially exclusive to these providers. At some point, shipstation is no longer viable at scale, and those rates go away. UPS and others justify the significant discounts by saying they’re capturing volume from very small shippers that would otherwise go to USPS
#general-chat - April 03, 2025 at 03:20 PM
Hello from a 3PL Operator. I made a (now archived) post some time ago about finding a 3PL which got lots of attention.
The 321 changes have people scrambling, so here’s a recap:
How much should you pay at your next 3PL?
First, there’s lots of talk about how much your 3PL’s cost should be as a % of your revenue. This isn’t a good benchmark. The majority of your 3PL bill will be postage, and that is based on weight and dimensions. Weight and dimensions don’t correlate to the price of goods.
If we try and simplify 3PL pricing to be broadly applicable, it becomes not optimizable.
Example: A 3PL offers an all-in price (fulfillment, postage, etc) that makes calculation simple. Now the 3PL wants to use the cheapest delivery carrier, which is often the crappiest, in order to expand their margin.
Or the 3PL has to rate based on the worst case scenario of the carrier package restrictions on weight, dimensions, contents, etc which almost always translates to the customer paying the worst-case scenario rate. Example: USPS and DHL hate big packages, even if they’re lightweight. Big packages will always be cheaper with FedEx and UPS. Your generic postage rate card has to consider that the shipment could end up going with USPS; subsequently a real scenario we encountered was that USPS would charge $90 to deliver the package and UPS would charge $15
How you should be charged? – this is the better question to ask to make sure you’re getting a fair price, a transparent way of being billed, and you’ve got your incentives aligned with your 3PL.
*Never pay as a % of Revenue. Never.
Fulfillment
3PL’s essentially resell labor. If you fulfilled in-house, your labor cost on a per order basis would fluctuate dramatically – slow sales day = high cost per order. You pay a 3PL for the certainty in your unit economics. Often that’s cheaper than doing it yourself.
Fulfillments costs are incurred when the 3PL makes the trip to an aisle to get any item for your order, then makes the trip back to pack it, then packs it (builds the box, prints the label, packs the items). Regardless if you have 1 item in your order or 10, that cost is incurred.
More effort is involved when there are more unique products (sku’s) as they have to visit more locations. Slightly more effort is involved to grab more than one item of the same product (but not much).
A good way to be charged is:
- A moderate order (or shipment) fee. This should be higher if your products are big, heavy, or fragile.
- A moderate unique sku fee. Higher if big and heavy.
- A low additional unit (of the same sku) fee. Higher if fragile.
But my 3PL is offering a flat price for the first 3 units. That’s usually not great. Just have them break it down where you pay for the effort involved.
Inserts and custom packaging should be at a discounted rate.
Returns
Should be 150-200% of the cost of fulfillment, especially if you need some degree of inspection and rehabilitation. Returns are very time consuming.
Postage
3PL’s a notorious for offering super low fulfillment rates that are literally a gimmick. Instead they put an ambiguous markup in postage and keep the difference.
You should pay for the exact carrier charges, plus a nominal % that is equal across all the carriers. You don’t want one carrier being more lucrative for the 3PL than another.
There’s 2-4% of postage costs that a 3PL gets hit with that are impossible to trace back to a tracking number. They also negotiate on your behalf and manage the complexities of the carriers. It’s not uncommon to see 10% on the rates, and that’s fairly reasonable.
Storage
Each unique sku you have will require space in a pickable location. Often, pickable space is only 20% of the total storage space in a warehouse. Once there’s no more pickable space left, the 3PL can’t take more clients. Excess inventory is overstocked.
Your overstocked inventory will need to be put in an overstock location, usually up on a pallet rack.
The best way to align incentives is to pay:
1. A unique sku fee. If it is on hand at the beginning of a week, you pay a small amount that week.
2. By cubic foot for all inventory on hand, by day or week.
You may have seen small, medium, large, XL etc bin fees for your pickable inventory. Often you pay these fees twice, or incorrectly as the sizes aren’t appropriate. A single fee if a sku is on hand means you’ll only pay it once and you don’t have to worry about bin sizing.
You may have seen pallet, case, box etc. This isn’t ideal. Often there are two half-full pallets of the same product being charged two pallet fees. The 3PL has no incentive to consolidate them. Paying by the cubic foot puts the pressure on the 3PL to use their space wisely. It should be noted that charging by the cubic foot is not great for apparel as the dimensions fluctuate so much based on how compressed they are. You might just agree to an average cost per unit per day and pay accordingly.
*Per cubic foot pricing will seem higher than pallet pricing, but very often clients are paying for twice as many pallets as their total cubic feet would actually be if the pallets are full.
Payment Terms
Net 7 is common. Net 30 is very rare.
60-80% of an invoice can be postage costs, which is mostly a pass-through for the 3PL. A single unpaid invoice can be devastating to a 3PL – there are very few businesses that take this amount of risk to earn so little revenue on actual services.
Pay your bill for a long time, on time. Then ask for Net 14, or ask that you be billed for postage and fulfillment separately, where fulfillment is on longer terms.
Finding a good 3PL
Google will point you to the big guys – shipbob, shipmonk, etc. These are good for brands that have no nuance to manage whatsoever – a robot could do it and never get it wrong.
References from other operators are a great way to get good, trusted operators. Big companies don’t need big 3PL’s, they just need attention.
Green flags:
• Owner Operated
• Has been on the eComm and retail side before
• Has experience with managing similar client types (and needs, like wholesale)
• Uses a good WMS – we use Shiphero and we love it.
Red flags:
• Offsite account management
• No direct contacts for urgency
• Doesn’t ship on critical sales days
• Has a ton of clients
I’m a fan of – a site that aggregates 3PL’s, asks some questions, and points you to a refined list of qualified operators.
There are other sites out there that do the same.
You could also have a professional run an RFP for you. I must warn that right now, urgency may get in the way of a full RFP process.
Data tells the story, so make sure you have clean order and item data, as well as package level detail to share with your next 3PL. The less guessing and estimating the 3PL has to do, the more likely they are to feel confident in an aggressive price.
Location: Where should you put your 3PL?
Ideally you’re only using one location and the midwest is best (Missouri, Oklahoma, Eastern Kansas, Indiana, Western Tennessee, Western Kentucky).
You’ll pay about $1,000 per container in additional transit to get it to the midwest, but the postage savings will eclipse that very quickly.
Second best is the east coast (Charlotte, Southern Pennsylvania). Postage will be ~5% higher vs the midwest.
In a very distant third place is the west coast. Postage is 15-20% higher than the midwest and 50% of the nation is in the furthest shipping zone (zone 8)
Dual-location or multi location: 99% chance you don’t need it right now and 95% chance you’ll never need it. I’ve done hundreds of zip to zone analysis and have every 3 digit zip origin to every 3 digit zip destination plotted. The average postage savings for any brand with less than 10lb packages never exceeds 4%. In contrast, the amount of inventory you’ll need to support 100% accurate distribution is conservatively 60% more, but often closer to 100% due to the way purchasing minimums work.
If you have more than 25 sku’s, there’s seriously almost never a reason to split locations.
If you’re going to split east and west coast, your east coast facility needs 70% of your inventory.
Time in Transit
If you want an even time-in-transit for all your customers, choose the midwest.
Economy Services like DHL eCommerce will average 4.5 to 5 days in transit
USPS Ground Advantage and UPS Surepost (Ground Saver) is 3.5
UPS Ground will be about 3.2 days
FedEx Ground will be 2.7 to 3.1 days
State of the Postage Network
UPS isn’t doing as much custom rate negotiations with shippers and is instead pointing their customers to standardized corporate rate programs like those seen in Shopify, Shippo, Shipstation, etc. The rates are generally good, but not very transparent and most importantly are subject to change at any time without notice.
FedEx hasn’t been as hungry for business, but their time in transit still beats UPS in most cases. They’ve also opened up Sunday delivery to about 60% of the nation.
Economy carriers: you get what you pay for with DHL eCommerce, UPS Mail Innovations, etc. They’re cheap because they have edge cases of about 0.1 to 0.2 % of customers that get very late deliveries. Expect about 5% of orders to never show a delivery scan.
Right now USPS Ground Advantage is the best price to time in transit offering in the market, but they’re flooded with volume right now and having sortation issues. There’s a small argument to be made that since carriers like DHL do their own pre-sort and then bulk deliver to a closer USPS substation to the final delivery address, there might be fewer issues temporarily.
Long term, USPS is trying to absorb relationships and package volume back in-house. They significantly raised DHL and UPS Mail Innovations prices, and severed their contract with UPS for their Surepost service altogether. This reduces competition which historically means prices will increase.
—-----
Hope this was helpful. If you’ve got questions, drop them in the thread.
#tech-talk - April 01, 2025 at 05:20 PM
Yes. Email (or slack message). We have our clients create the order in Shiphero and upload the supplemental docs
#tech-talk - March 31, 2025 at 06:59 PM
Perhaps this is a contrarian opinion, but I’ve been on the retail side, the manufacturer side, and now we run a 3PL for dozens of companies doing exactly this.
For brands with less than 8 figures of wholesale/EDI eligible shipments, the effort to make all these connections communicate with each other effectively is rarely worth it.
SPS is expensive and the lead times on new connections are routinely more than 6 weeks.
Additionally, many wholesalers don’t accept EDI, or they have their own proprietary portal.
The effort required to consolidate all these connections into one platform for the sake of consolidation doesn’t actually net significant benefit.
Belaboring this a bit more. If you don’t have a decent ERP, then you’re going to be reconnecting most of these connections when you finally implement one. That’s another expense and management of continuity that is difficult to justify.
My recommendation for most brands is to do it the hard way: Hire a VA and hand-key these orders. Update inventory routinely. Manage the flow of supplemental documentation to the 3PL manually.
The likelihood that middleware drops key information when you’re connecting so many platforms is quite high. In the long run, you’ll probably hire a VA to double check the systems anyways.
More than likely you’ll need to hire one to input the misc retailer orders that don’t use EDI.
Finally, EDI doesn’t manage nuance. The orders will likely have some human intervention anyways.
But if you HAVE to go with EDI, or your volume justifies it, you can make it easier on yourself by checking out (ERP) and/or (EDI intermediary).
They’re low-lift and easy implementation, and most importantly, they won’t need reconnected and reconfigured as your business grows. They’re accessible from the start and scalable for the long term.
I’m sure @Dipti Desai will have good contributions to the topic 😄
#announcements - March 16, 2025 at 09:52 PM
@Nick Kennedy I like that question
#tech-talk - March 13, 2025 at 07:28 PM
Happy to intro to them
#tech-talk - March 13, 2025 at 07:27 PM
Highly recommend Good Day
#logistics-operations - March 05, 2025 at 12:02 PM
Second this. FedEx and other carriers won’t help you estimate duties and taxes at checkout, and what they bill you will rarely match what you actually pay.
Passport is a great option, and I’ve got a great contact there if you’d like an intro.
#logistics-operations - February 13, 2025 at 04:52 AM
We reimburse cogs over 2% variance.
Lots of reasons to use a 3PL aside from transferring liability of accuracy though.
#logistics-operations - February 06, 2025 at 07:22 PM
Bless you all!
#general-chat - February 04, 2025 at 02:24 PM
You’re the man @Deb Mukherjee!
<@U081DD974EA> is a great operator.
@Matt Hertz - ThirdPerson.co is perfect for finding the right fit.
#logistics-operations - January 30, 2025 at 06:04 PM
Simba is correct here
#logistics-operations - January 23, 2025 at 02:38 PM
Ouch. This sucks.
I’d second every point @Aaron Alpeter made.
On the merit of recovering your cost from your 3PL:
Mistakes happen, and sometimes really fast. When 54 items are sent out wrong, it’s 54/10,000 or it’s closer to 54/54.
At some point up the chain something happened where a whole batch of actions was messed up: they labeled a ton of product wrong, they binned it wrong, or maybe they printed a bulk-shipment of orders for that same item and accidentally grabbed all of the wrong one.
Likely one small mistake led to a ton of damage.
The 3PL is paying postage and labor to fill the orders.
Postage is at least 80% a pass through cost, so their real net margin is probably 20-30% of your total fulfillment bill. Usually just $2 or so per order.
When margins are this slim, you can imagine how many orders it would take to recover $7-9k in losses.
In your case, just reimbursing the postage, fulfillment, and returns postage is likely exceeding their net margin in fulfilling the order by a huge factor.
Similar to parcel carriers, which only cover the value of the goods up to a limited (if any) amount, 3PL’s can’t cover the actual product value. Outside that, they recommend insuring the goods.
You shouldn’t pay fulfillment for the mistakes, nor the outbound postage. Anything in excess of that is generosity from your 3PL.
Some ideas:
• reduced fulfillment cost for X period until the cost of goods (at your cost) is recovered.
• Some other concession like account management that they can discount for a time.
• Some probationary period to ensure gross accuracy is above a certain high percentage, otherwise they assist you in finding a new partner
Open to answering other questions on this front, and wishing you luck.
#logistics-operations - January 17, 2025 at 02:49 PM
You’re kind @Deb Mukherjee — we could be a fit. Data will tell the story.
Ouch on the pain points.
Cost — the big guys are often the cheapest on paper, but the most expensive when you’re dealing with all the misc problems.
If your product is an appliance or something of reasonable size, they often have dramatically higher postage costs because they’re using dimensional considerations of the carrier least suited to move the package. Also those products usually take up more space than the fulfillment revenue justifies. Thats a long way of saying big products aren’t suited for big 3PL’s.
Outsourced CS: feel you there. If you want to talk to people on site that can literally go grab your product, you can’t be with a big 3PL. Your product could be at any of 30 locations, and you’re 1 of 5,000 clients.
Errors: to big 3PL’s credit, they’re usually so rigid that picking and packing accuracy mistakes are less frequent. Where they fall down is if any nuance needs managed — fragile, kitting on demand, multi-piece orders, etc.
You likely need to go to a smaller 3PL that can give you more attention.
Two recommendations:
- Send me data. Nothing tells the story like data, and I’ve got hundreds of other companies to benchmark against.
- Check out — this is @Matt Hertz - ThirdPerson.co project and it helps find suitable 3PL options given your needs.
#logistics-operations - January 17, 2025 at 02:39 PM
I think your experience from ShipBob to shipmonk could be similar, given the nature of very large 3PL’s.
What’s the pain points?
#jobs-and-talent - January 09, 2025 at 05:44 PM
I’m your man. Shouldn’t be too complex. What are the details?
#announcements - January 02, 2025 at 07:51 PM
Love this
#logistics-operations - December 24, 2024 at 10:01 PM
Howdy folks.
If you’re thinking about finding a new 3PL, I’d recommend a review of the post below.
We’re practically full, so again, not a sales post.
I have all the models built for brands of different volume, package sizes, time in transit goals.
It’s no sweat to look at your data and help point you in the right direction
#general-chat - December 24, 2024 at 10:01 PM
Howdy folks.
If you’re thinking about finding a new 3PL, I’d recommend a review of the post below.
We’re practically full, so again, not a sales post.
I have all the models built for brands of different volume, package sizes, time in transit goals.
It’s no sweat to look at your data and help point you in the right direction
#logistics-operations - December 17, 2024 at 06:50 PM
<@U081DD974EA> is amazing!
#logistics-operations - December 11, 2024 at 08:45 PM
That could be us.
Would also encourage you to look chat with @Matt Hertz - ThirdPerson.co. If you want in depth search, there is or if you’d like to browse and get some intro’s, there is
#logistics-operations - December 05, 2024 at 01:45 PM
Haven’t noticed anything
#logistics-operations - November 26, 2024 at 11:01 PM
Charge for it. They’re acclimated
#jobs-and-talent - November 18, 2024 at 10:40 PM
Yes!
#logistics-operations - November 11, 2024 at 04:36 PM
That stinks. I don’t have a good option for you. White glove service might be the only method left
#logistics-operations - November 07, 2024 at 01:52 AM
As a carrier or for your fulfillment?
#general-chat - October 31, 2024 at 08:01 PM
That’s a calculation based on a dimensional divisor which is different for each shipper. What’s the actual dimensions?
#general-chat - October 31, 2024 at 08:00 PM
What’s average package weight/dim?
#general-chat - October 31, 2024 at 08:00 PM
At the size of your products, assuming you don’t compress them before transit, you’re probably near the threshold of 2 locations making sense — again, this is almost exclusively based on your weight/dimensions.
#general-chat - October 31, 2024 at 07:59 PM
That’s including all the color variations?
#general-chat - October 31, 2024 at 07:57 PM
Order volume?
#general-chat - October 31, 2024 at 07:57 PM
How many unique sku’s?
#general-chat - October 31, 2024 at 03:23 PM
No direct experience by the anecdotes I’ve heard are good.
#amazon - July 09, 2024 at 05:56 PM
@Matt Hertz - ThirdPerson.co will get you pointed in the right direction
#general-chat - May 14, 2024 at 03:45 PM
Paging @Timothy