3PL warehousing is the business of holding and shipping several companies' stock in one building and charging each of them for the space and the work. The model is attractive because the building, the racking, the scanners and the people are shared, so each client pays a fraction of what its own warehouse would cost; it is hard because each client expects its own stock to be handled its own way, and the operator has to run several operations on one floor with one team. This page is about how that is done, and what it costs in procedures, training and reporting; the free warehouse SOP template worksheet on this site sizes the procedure pack a new client account adds.
Shared building, separate clients
A 3PL keeps each client's inventory apart in the system and usually on the shelf: separate locations or zones, separate lot control, separate counts. The team is shared, so the difference between clients lives in the procedures the team follows, not in the people. A new client is therefore a new set of variants for receiving, putaway, picking, packing and returns, and the worksheet counts them before the contract is signed.
What a new client account actually adds
Five processes with a base SOP each and a variant for the new client is five more SOPs; at 12 steps each that is 60 more steps; and a team of 12 at four minutes a step is 48 more hours of training before the first shift runs the new account properly. Sizing that up front is how the onboarding date becomes honest and how the storage and handling rates cover the work.
Where the model makes or loses money
Labour. Space is priced once and mostly fixed; the cost the operator controls day to day is hours at a loaded rate against the lines, orders and receipts they produced. Cost per order against the handling rate is the account's margin, week by week, and a client whose procedures were never written costs more hours than its rate card assumed. Pickpathly Pro keeps the SOPs and the weekly figures against each client so that shows early.
Questions people ask about 3pl warehousing
What is the difference between 3PL warehousing and a public warehouse?
A public warehouse sells space and basic handling to anyone by the month; a 3PL sells space plus fulfilment services to contracted clients, usually with the client's own procedures, packing spec and reporting. Many operators do both.
How many clients can a small 3PL warehouse handle?
As many as its procedures and its labour can serve consistently: each client adds a variant of every process and the training that goes with it. The SOP worksheet on this site sizes that per client; the labour worksheet turns the extra lines into pickers.
What does a 3PL need to write down for each client?
The receiving check, the putaway rule, the picking method, the packing spec and the returns disposition, each with the client's variations, plus the rate card and the reporting agreed. The worksheet counts the SOPs; Pickpathly Pro keeps them with versions and review dates.