Fulfilment costs can eat up to 30% of an eCommerce company's revenue. The 3PL invoice is usually the second-largest line on the P&L after stock. And yet it is the relationship that gets the least careful attention, because it works well enough on day one and the cost of looking closely never quite seems urgent.
A 3PL relationship is the most operationally complex commercial relationship an eCommerce business has, and almost no one publishes useful guidance on how to run it. The 3PLs themselves write checklists explaining what to look for in a 3PL, which is a little like asking the estate agent how to choose a house. The trade press writes listicles ranking providers by feature set. What is missing is a clear picture of what good actually looks like, day-to-day, from the brand's side of the table.
Two of CapRelease's founders ran 3PLs before they started a funder. We now sit on the other side, looking at hundreds of UK eCommerce brands and their fulfilment relationships at the same time. Good 3PL relationships look the same across categories, regardless of size, regardless of provider. So do bad ones. Here is what to look for, and what to avoid.
Good starts with the data
A 3PL ships the boxes. That is the table-stakes job. The thing that separates a good 3PL from a competent one is the data the brand gets back. Stock on hand by SKU and by location. Daily inbound and outbound. Stock age. Pick velocity. Returns by reason code. Available through an API, not just through a portal that someone on the brand's team has to log into and export.
The industry standard for inventory accuracy is 95 to 98%, with best-in-class operations targeting 99% or above. Dock-to-stock time should be 48 hours typical, 24 hours for the best operators. Order picking accuracy should sit at 99.5 to 99.9% under any decent service-level agreement. These are not aspirational numbers. They are the floor.
The question is not whether your 3PL hits them. The question is whether you can see whether your 3PL hits them, in real time, without having to ask. A good 3PL provides that visibility as standard. A 3PL that gives you monthly CSV exports two weeks in arrears, or that quotes accuracy numbers without showing you the underlying reconciliation, is one that does not want you to see the truth.
Data the brand can see is data everyone the brand works with can see. Operations leads, accountants, funders, eCommerce managers. When the 3PL data is locked behind a single portal with limited seats, the brand bottlenecks every decision through one person. When the data is available via API, decisions get faster across the whole business.
Good means the billing matches the way the business actually runs
UK 3PL pricing is typically modular: £10 to £30 per pallet per month for storage, £1 to £3 for pick and pack, £2.40 to £3 for economy domestic shipping. On top of that sit receiving fees, returns processing, peak surcharges, hazmat handling, kitting, value-added services. Each one defensible in isolation. Stacked together, they are the reason brands routinely struggle to reconcile their 3PL invoice from one month to the next, and the reason a single-line summary invoice almost always conceals more than it reveals.
The complexity itself is not the problem. The problem is when the billing structure works against the way the brand actually buys and sells.
Take a brand that orders 12 weeks of Q4 inventory in early September and gets billed full storage from day one. Six weeks of paying to hold stock that is not yet generating revenue, against a peak surcharge structure that kicks in at exactly the wrong moment in the cash cycle. The fix is not always cheaper rates. Sometimes it is just a billing structure that recognises a ramp.
A good 3PL is willing to have this conversation. They will price tiered storage that reflects the buying cycle. They will be transparent about exactly when peak surcharges apply and how to model for them. They will let the brand see the granular invoice line items rather than a summary, and they will explain what changed when the invoice moves month-to-month.
A bad 3PL bills full storage from day one, applies peak surcharges without warning, and produces invoices that take an hour to reconcile against the contract.
Good runs on operational rhythm, not on exceptions
Two habits separate 3PL relationships that compound from 3PL relationships that drift. Both are unglamorous, and both quietly determine whether the brand spends its time managing the warehouse or running the business.
The first is weekly stock reconciliation between the WMS and the brand's sales system. The numbers should match. Where they don't, the variance gets investigated inside 48 hours, not absorbed into the next quarterly review. The cost of letting variances build up is not theoretical. The average cost of a stockout is 10 to 40% of lost sales permanently, because customers who can't buy from you go elsewhere and don't come back. Unreconciled inventory is the leading cause of stockouts that should never have happened.
The second is a named human on the phone. Not a ticketing system. Not a shared ops@ inbox. A person, with a phone number, who knows your brand and your SKUs, and who can resolve an exception inside hours rather than days. eCommerce produces exceptions constantly. Wrong SKU shipped, customs hold on inbound, damaged pallet, courier change, sudden launch demand spike. The cost of a slow exception process is rarely the exception itself. It is the cumulative drag on the brand's team having to work around it.
Brands with the best 3PL relationships treat their account manager the way they would treat an internal operations lead. Monthly performance reviews, agreed targets, clear escalation paths, a calendar of upcoming events the 3PL needs to plan for. Brands with the worst 3PL relationships email a shared inbox and hope someone picks it up.
Good means the 3PL grows with the business
A 3PL that works at £500k of monthly revenue often stops working at £2m. The SKU count rises. Channel complexity rises. Returns processing volumes rise. Peak surcharges that didn't apply at lower volumes start to bite. The cost structures that made sense at one tier stop making sense at another.
A 2024 report found nearly 40% of UK retailers fail to meet delivery times, and the most common reason in our experience is brands staying with a 3PL that suited them two years ago but no longer suits them now. The 3PL hasn't changed. The business has.
Brands with healthy 3PL relationships re-evaluate the fit every 12 months. Not because they are looking to switch, but because the business has evolved and the 3PL should be evolving with it. The good 3PLs invite this conversation. They flag when a client is hitting the volume tier that warrants a different contract, when a new sales channel needs different fulfilment logic, when a launch is going to require dedicated capacity. The mediocre ones wait to be asked.
If your 3PL has not proactively suggested any operational change in the last 12 months while your business has changed materially, that tells you what the next five years will look like. Brands hitting 98% on-time fulfilment see 20% higher customer retention than those who don't. The difference is rarely operational chance. It is the difference between a 3PL that runs on the business and one that runs alongside it.
What bad looks like
Bad is the 3PL whose WMS only updates overnight, so stock decisions get made on yesterday's numbers.
Bad is the 3PL that bills nine line items nobody costed at pitch stage.
Bad is the 3PL that takes a launch as a surprise, charges peak surge for it, and tells you afterwards.
Bad is the 3PL that runs everything through a shared inbox where the person replying does not know your brand.
Bad is the 3PL that has not proactively suggested anything in twelve months, while your business has changed materially.
Where the working capital lens comes in
The fulfilment data and the funding position get treated as separate problems. They are two sides of the same problem.
We underwrite UK eCommerce brands using four data sources together. Live inventory data from the 3PL's WMS, sales data from Shopify and Amazon and TikTok Shop, accounting data from Xero or QuickBooks, banking data via open banking. No other UK funder looks at all four. A brand with £200k of revenue last month and £400k of stock sitting in a 3PL is a much bigger business than its revenue line suggests. On a revenue-only model, the facility is small. On a model that sees the stock, the facility is sized to the business as it actually exists.
The brands we fund typically see 20 to 40% revenue growth during each funding cycle, because the facility is large enough to do what the business actually needs rather than what last quarter's accounts can prove.
The prerequisite is that the 3PL provides live, accurate, API-accessible data. Brands working with 3PLs that only deliver monthly CSV exports cannot benefit from this, regardless of which funder they choose. Brands working with 3PLs that have proper WMS, real-time visibility and clean integrations can.
Data quality matters in a 3PL relationship beyond the operational case. The same WMS feed that makes a brand easier to run also makes it easier to fund. A 3PL that takes data seriously is one whose clients tend to have larger facilities, faster decisions, and more flexibility in their working capital. That is not a minor side-effect. It is often the difference between funding the next launch from cash and funding it from a facility sized properly for it.
A short audit, before you sign or after
If you are evaluating a new 3PL, or reviewing your existing one, the questions worth asking are not the ones in the brochure. They are the ones below.
Can my funder, accountant and operations lead all read your WMS data in real time?
When does the storage meter start on an inbound, and how does that map to my buying cycle?
What is your peak surcharge structure and how do I model it three months in advance?
Who is my account manager and how do I reach them on a Sunday in November?
What is your stock reconciliation process, and what happens when there is a discrepancy?
What is your returns turnaround in November versus February, and what does that cost me?
What is your dock-to-stock benchmark, and what is your last 90 days of actual performance?
What operational changes would you suggest for my business based on what you have seen this year?
If the answers are vague, the answers are no. A 3PL that runs a tight operation knows exactly how it bills, how its data flows, how its accuracy holds up, and what it would change about a client's setup if asked. A 3PL that is reluctant to answer is telling you what the rest of the relationship will look like.
The takeaway
A good 3PL relationship is not the one with the lowest pick rate. It is the one with the cleanest data, the clearest billing, a named human on the phone, and the willingness to grow with the brand. Measured that way, very few brands actually have one. The relationship works well enough until it does not, and it tends to fail at exactly the point in the year when the business can least afford the disruption.
The cost of a mediocre 3PL relationship is not in the 3PL invoice. It is in the operational drag, the missed sales, the working capital that the rest of the business cannot access, and the time the founder spends chasing things that should run on their own.
Get the 3PL right and the operational headaches the brand had at £500k of monthly revenue stop being headaches at £2m. Get it wrong and they multiply.
CapRelease is the funding layer inside fulfilment. We underwrite against live 3PL data, sales, accounting and banking at the same time, so the facility reflects the real business rather than the part of it that shows up in revenue alone. £20k to £1m facilities, decisions in 24 to 72 hours, FCA Registered. FRN 1013575. See our 3PL Partner Programme if you are a 3PL whose clients would benefit from this.
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