Moving to a 3PL: funding the switch from spare room to fulfilment partner

Almost every online store starts in a spare room, a garage or a small unit. At some point, packing orders stops being part of the job and becomes the job. That’s usually when founders start looking at a third-party logistics provider, or 3PL. The move can transform the business, but it comes with costs and a cash dip that deserve a plan.

How do I know it’s time to move to a 3PL?

There’s no single trigger, but these signs tend to arrive together:

• You spend more hours packing than on marketing, product or partnerships.
• Orders ship late in busy weeks and customer service complaints rise.
• Stock has outgrown the space, and you’re turning down bigger orders because of it.
• Customers in other states wait too long, and you’re losing sales on delivery time.
• You’re thinking about hiring a packer, and wondering whether a 3PL would be simpler.

That last point is worth weighing carefully. A first hire and a 3PL solve the same problem in different ways. The first hire funding page covers the hiring route; this page covers outsourcing.

What does the switch really cost?

A 3PL quote usually lists ongoing fees. The switch itself has one-off costs that are easy to miss:

One-off costs	Ongoing costs
Onboarding or set-up fee	Receiving fees when stock arrives
Freight to move stock into the warehouse	Storage per pallet, bay or shelf
Integration with your store and inventory system	Pick-and-pack fee per order
Relabelling or barcoding stock if needed	Packaging materials
Extra stock to cover the transition	Shipping to customers
Your time planning and testing	Returns handling

The transition stock is the sneaky one. While stock is in transit to the 3PL and being received, you may need extra units on hand to keep shipping. If you’re keeping some stock at home for local orders or content, that’s a second location to fill.

Does a 3PL make my unit economics better or worse?

It depends on what you compare it with. Many founders compare the 3PL’s per-order fee with the cost of their mailer box and label, and conclude it’s expensive. The honest comparison includes:

• Your time, valued at what you’d otherwise earn or what a packer would cost.
• Space — rent, or the cost of the room you’ve given up.
• Errors and delays, which cost refunds, reorders and repeat customers.
• Shipping rates, which a 3PL may negotiate better than you can at your volume.

Rerun your contribution per order with the 3PL’s fees in the ad-spend payback calculator. If break-even ROAS rises a lot, you may need to adjust pricing, bundle products or raise your free-shipping threshold.

Planning the switch and want to see how the one-off costs could be funded? Start an enquiry. It’s quick and doesn’t involve a credit check.

How do founders usually fund the move?

• Cash flow, if the one-off costs are small relative to monthly contribution.
• A line of credit sized on turnover, typically within $5,000 to $500,000, to cover onboarding, freight in and transition stock, then repaid over the following months.
• A larger facility, possibly property-secured from $20,000, if the move is part of a wider step up, such as a new product range or wholesale expansion at the same time.

Illustrative example: a supplements brand leaves the garage

Illustrative only. A Brisbane supplements brand ships about 1,400 orders a month from the founder’s garage. The founder values her packing time at about $3,500 a month, plus a casual helper on busy days. A 3PL quote comes in at a similar monthly total at current volumes, with faster delivery to Sydney and Melbourne.

One-off costs add up to about $8,500: onboarding, freight in, integration and a month of transition stock. She funds that from a small facility, repaid over four months. The real gain is time: she spends it launching a subscription option that lifts repeat orders, which improves CAC payback across the board.

What should I ask a 3PL before signing?

A good fulfilment partner will happily answer detailed questions. A few worth asking:

• How are fees calculated for my actual order mix? Ask for a quote built from last month’s real orders, not a sample basket. Multi-item orders, fragile products and oversized parcels are often priced differently.
• What are the minimums? Some providers charge a monthly minimum regardless of volume, which matters in quiet months.
• How fast is receiving? Stock that sits unreceived for a week can’t be sold.
• Which platforms do they integrate with? A clean connection to your store keeps inventory counts accurate.
• What happens at peak? Ask how they handled last November and December, and whether there are cut-off times or surcharges.
• How easy is it to leave? Understand notice periods and the cost of moving stock out.

Get the answers in writing and put the numbers into your forecast before you commit. A 3PL that looks cheaper per order but charges heavy minimums can cost more for a smaller store than one with a slightly higher pick fee and no floor.

If the switch lines up with your busiest months, read Black Friday and Christmas stock funding first — moving warehouses in November is rarely a good idea.

Hand off the packing, keep the momentum

A 3PL can give a founder back the hours that growth needs. If the one-off costs are the hurdle, tell us what the switch involves. There’s no credit check to enquire, your details go to a real person rather than a list of lenders, and we’ll call to work through the timing. Please fill in the form carefully, especially monthly revenue and time trading, so we can match you properly the first time.