A 3PL contract is the agreement that sets what your fulfillment partner must deliver, what it charges, and who pays when something goes wrong. Most brands read the price schedule closely and skim the rest. The rest is where the expensive surprises live: who covers lost inventory, what happens when accuracy slips, and how hard it is to leave.
Use this checklist when reviewing any fulfillment agreement. It is not legal advice, so have a lawyer review the final document, but it will help you ask the right questions before you get there.
1. Service level agreements (SLAs)
An SLA turns promises into measurable commitments. If a provider will not put a number in writing, assume it will not be met. The table below lists the core SLAs to request and common industry benchmarks.
| SLA | What to ask for | Common benchmark |
|---|---|---|
| Order accuracy | Percentage of orders shipped with correct items and quantities | 99.5% or higher |
| Dispatch time | Orders received by a cut-off time leave the same or next business day | Same or next day |
| Receiving time | Time from inbound arrival to stock available for sale | 24 to 48 hours |
| Inventory accuracy | Match between system counts and physical cycle counts | 99% or higher |
| Support response | Time to first reply on order issues | Within one business day |
The accuracy and receiving benchmarks above are drawn from Red Stag Fulfillment’s guidance on 3PL standards, which describes 99.5%+ accuracy with financial penalties per error as standard among top providers.
2. What happens when an SLA is missed
An SLA without a remedy is just a target. Check whether the contract includes:
- Credits or refunds for each mis-shipped order, including the cost of reshipping
- A defined process and deadline for raising claims
- The right to terminate without penalty if SLAs are missed for a set number of consecutive months
3. Liability for lost or damaged inventory
This is the clause brands most often regret not reading. Many standard contracts cap the warehouse’s liability at a low amount per pound or per unit, far below what your products are worth.
- Valuation basis: are losses reimbursed at your cost price, retail price or a fixed cap?
- Shrinkage allowance: some contracts allow a percentage of inventory loss before any payment. Push for zero.
- Insurance: does the provider carry warehouse insurance, and does it cover your goods? You may need your own policy.
- Carrier damage: who files and pays claims for parcels damaged in transit?
4. Fees and price changes
The price schedule should be complete. Compare it with independent benchmarks: Fulfill.com’s 2026 data shows US account management fees from $30 to over $1,000 a month and monthly minimums averaging $517. Then confirm:
- Every fee is listed, including receiving, storage, kitting, returns, account and integration fees
- How much notice the provider must give before raising rates
- How carrier surcharges, such as peak season and fuel, are passed through
- Whether minimums apply, and how they are calculated
Value-added work such as kitting, inserts and relabelling is often priced separately. Our breakdown of 3PL value-added services shows which extras are worth paying for.
5. Term, renewal and exit
- Initial term: 12 months or longer is common at traditional 3PLs. Month-to-month is better for a first partnership.
- Auto-renewal: check the window for cancelling before a renewal locks you in.
- Termination fees: early exit charges and any remaining minimums.
- Inventory release: how quickly your stock will be released on exit, and at what cost.
- Lien clauses: some contracts let the warehouse hold your inventory against unpaid invoices. Understand the conditions.
6. Data, systems and reporting
Confirm that you own your order and inventory data, that you get real-time access to stock levels, and that integrations with your store are included. Ask what reports you will receive and how often.
Red flags to walk away from
- No written SLAs, or SLAs with no remedies
- Liability capped at a token amount with no option to increase it
- Rates that can change “at any time” without notice
- Long auto-renewing terms with heavy exit fees for a first contract
- Vague answers on who pays for carrier damage or customs issues
How Fulfillmen approaches contracts
Fulfillmen works without lock-in contracts, minimum order quantities or monthly commitments. You pay for units dispatched, each item is checked against your product specification during pick and pack, and Shopify, WooCommerce and Amazon integrations are free. That lets you judge us on performance rather than on a termination clause. Explore our fulfillment services.
Frequently asked questions
What should a 3PL contract include?
Service levels with remedies, a complete fee schedule, liability and insurance terms, data ownership, and clear term, renewal and exit conditions.
What is a good order accuracy SLA?
99.5% or higher is a common benchmark among established providers, ideally with credits for each error.
Can I negotiate a 3PL contract?
Yes. Liability caps, notice periods, minimums and contract length are frequently negotiable, especially if you can share reliable volume forecasts.
How long should a first 3PL contract be?
Shorter is safer. Month-to-month or a short initial term lets you test performance before committing for longer.
Want terms you can check against real performance? Get a free quote from Fulfillmen.
