Take one business and hold it still while the options change around it. A two-person operation pours soy candles into twelve-ounce glass jars, sells about four thousand of them a year, and ships roughly seventy percent of those as single-unit orders direct to customers. The rest go out as cases to a handful of gift shops. The product is heavy for its size, breakable, and seasonal: a third of the year's volume moves between late October and the third week of December.
That business is currently storing finished stock in a garage and a rented ten-by-ten self-storage unit, and packing orders on a folding table. The owner wants to know whether a warehouse that someone else runs would be cheaper. The instinct is to compare rent against rent. That comparison answers almost nothing.
The assumption: you are buying space
Nearly everyone starts by pricing square feet. A self-storage unit quotes a monthly rate. A third-party logistics provider (a 3PL, meaning a company that holds your inventory and ships your orders for you) quotes storage by the pallet or the bin. Marketplace fulfillment quotes storage by cubic foot. Those three numbers look comparable, so people line them up and pick the small one.
For the candle business, storage is not the expense. Four thousand jars, packed in master cases, is a small footprint. Call it two or three pallets at peak and under one for most of the spring. Whatever the monthly storage rate is, it is being applied to a volume that barely registers.
What registers is the handling. Every one of those roughly three thousand single-unit orders has to be picked off a shelf, put into a box with void fill, labeled, and handed to a carrier. A 3PL charges for that per order, usually as a base pick fee covering the first item plus a smaller fee for each additional item, with packaging materials billed separately or bundled depending on the contract. Multiply the base fee by three thousand and you have a number that dwarfs twelve months of pallet rent. The same arithmetic runs in the other direction for the wholesale cases: four shop orders of six cases each cost almost nothing to handle, because handling is priced per touch, not per item.
The three fees nobody quotes you first
Three charges tend to appear after the headline rate, and for a product like this they move the answer.
Receiving. Getting your inventory into the building is a billable event. It is usually priced per pallet if the shipment arrives palletized and shrink-wrapped, and per carton or per unit if it does not. A small producer who ships thirty loose cases from a co-packer can be billed at the carton rate thirty times. Palletizing before the truck leaves changes the invoice.
Monthly minimums. Most 3PLs set a floor: a minimum monthly spend, a minimum order count, or both. For a business doing seventy orders in April and nine hundred in November, the floor is the thing to model. Nine months of paying a minimum you do not reach can cancel out the three months where outsourcing clearly wins.
Long-term storage surcharges. Marketplace fulfillment programs in particular escalate the rate on inventory that sits past a certain age, and raise storage rates during the fourth quarter, which is precisely when seasonal stock is sitting there. Slow-moving variants get expensive quietly.
What each option actually suits
| Option | Where the cost sits | Fits this case when |
|---|---|---|
| Self-storage plus your own packing | Flat rent, your labor, retail carrier rates | Order volume is low enough that your hours are not the binding constraint, and you can live with no climate control in a wax-based product |
| Third-party logistics warehouse | Per-order pick and pack, receiving, monthly minimum | Order counts are steady enough to clear the minimum, or wholesale cases are a large share of volume |
| Marketplace fulfillment | Per-unit fee tied to size and weight, tiered storage | Sales come through that marketplace anyway and the item is not unusually heavy for its dimensions |
The weight detail matters more here than it would for a lighter product. Fulfillment fees on marketplace programs are banded by size and weight, and a glass jar in a protective box sits near a band edge. Shaving an eighth of an inch off the mailer, or switching to a lighter void fill, can drop the item into a cheaper band and change the per-unit economics across the whole year. That is a packaging decision disguised as a logistics decision.
Where the household version and the company version diverge
Someone selling four hundred jars a year should almost certainly keep packing them personally. The labor is real but it is absorbed, the carrier discount they are missing is small in absolute dollars, and the minimums at any outside provider would eat the difference. Someone selling forty thousand is past the argument: the folding table stopped working two years ago, and the question is which provider, not whether.
Four thousand is the awkward middle, and the honest answer is a split. Keep wholesale cases in-house, where handling cost per unit is low and the orders are predictable. Place a seasonal block of direct-to-consumer inventory with an outside provider from September through January, negotiated as a short-term arrangement rather than an annual contract, and pull it back out afterward. Several 3PLs will do this; some will not, and asking early sorts the list fast.
One constraint sits above all of this. The Federal Trade Commission enforces the rules governing how promptly mail, internet and telephone orders have to ship, and those obligations stay with the seller regardless of who is holding the boxes. If a provider's cutoff time means orders placed Friday afternoon do not move until Monday, that is your shipping window, not theirs, and it belongs in the comparison next to the fees.
The five numbers to get before you sign
- The base pick fee and the additional-item fee, quoted against your actual order mix rather than an average.
- The receiving rate for both palletized and loose-carton deliveries.
- The monthly minimum, and whether it is spend-based or order-based.
- The storage rate at peak season and any long-term surcharge schedule.
- The daily order cutoff time, and what happens to it in December.
Run those five against twelve months of your own order history, not against a projection. The month that decides the answer is usually a quiet one, not the busy one everybody models first.