3PL Minimums

What Are 3PL Minimums?

3PL minimums are thresholds a third-party logistics provider sets for working with a brand. They usually take the form of a minimum number of orders per month or a minimum monthly bill. If a brand ships fewer orders or spends less than the minimum, it may be charged the difference. Minimums help providers cover account management and setup costs, but they can be a burden for smaller or seasonal brands.

How It Works

Minimums come in several forms:

• Order minimums: a required number of orders shipped each month.
• Monthly spend minimums: a minimum invoice amount, with a top-up fee if the brand's actual charges are lower.
• Storage minimums: a minimum number of pallets or a minimum storage charge.
• Contract terms: minimum commitment periods, sometimes with fees for ending early.

For example, a 3PL with a monthly spend minimum might bill a brand the minimum even in a slow month, so a brand whose actual fees came to less would pay the shortfall as a separate charge. For a seasonal brand, those slow-month shortfalls can significantly raise the true average cost per order.

Why It Matters for Ecommerce Brands

Minimums affect early-stage brands most, as well as brands with seasonal sales or product launches that ramp up gradually. Before signing, brands should ask whether minimums apply, how they are calculated, whether they change over time, and what the notice period and contract length are. Comparing providers on total annual cost, including slow months, gives a more accurate picture than comparing headline rates alone.