Why Setup Fees and Onboarding Costs Matter More Than Anyone Tells You

Industry Confusion About Costs

If you have ever tried to price out a third party logistics provider, you know the feeling. It starts as a simple question: what will this cost me to set up? Then you fall headlong into an internet rabbit hole of vague fees, missing details, and suspiciously cheerful promises. Public data does not help much. A 2023 Warehousing & Fulfillment study found that onboarding fees range from zero dollars to more than ten thousand dollars depending on complexity, with no clear standard across the industry. Some providers treat onboarding like a miniature revenue stream. Others treat it like a booby trap. Either way, you are the one stepping into the tall grass.

Researchers at Supply Chain Dive and Shopify consistently report the same theme: merchants walk into onboarding hoping for a fresh start and wind up paying extra for label configuration, system mapping, SKU cleaning, or the mysterious category called 'additional work.' The industry loves additional work like low budget restaurants love mysterious sauce. You are told it is important, but nobody explains what is in it.

The result is a persistent fear that setup fees are where the real bill hides, waiting to lunge at you the moment your first container lands.

How Costs Balloon at Many 3PLs

When you peel back the layers, the economics are not complicated. Most 3PLs outsource their integrations. If a WMS provider has to be roped in, the clock starts ticking, and the client pays for every hour of tinkering. When the developers who built the WMS are not in the building, every request becomes a phone chain, and the bill collects interest like forgotten credit card debt.

Then there is the operational side. Many 3PLs still rely on paper-driven processes, hand-keyed receiving, and old-fashioned guesswork. Every error in receiving creates an error in picking. Every error in picking creates a chargeback, or worse, a canceled retailer relationship. In that world, setup fees function like hazard pay for a system that knows it is fragile.

Clients feel that fragility. That is why so many arrive at a new 3PL with the same story: the previous provider got the basics wrong, orders were late, inventory was off, and the only thing delivered on time was disappointment.

Maureen Milligan, Director of Operations and Projects at G10, sees this pattern constantly. She notes that customers coming from other 3PLs usually report that 'their orders werent getting fulfilled in time, their inventory accuracy was not there, and they were not able to satisfy customer orders.' That is not an onboarding cost. That is the cost of working with the wrong warehouse.

What Onboarding Should Actually Do

A reasonable onboarding process does not simply bolt your brand onto a warehouse. It builds the scaffolding that your future sales will climb. The work should cover system integrations, SKU normalization, inbound planning, carrier logic, retailer compliance, and the operational choreography required to hit day-one SLAs. That sounds dull until your business outgrows your porch and starts knocking on real enterprise doors.

This is where Connor Perkins, Director of Fulfillment, brings some clarity. He spends his days guiding clients from signed agreements to go live. 'A lot of our customers only sell their products on Shopify, so for those clients, 75 percent of what we do during onboarding is going to be the same. But then you have unique things that change from business to business that we sort through.' The mystery around setup fees often comes from that variability. Some businesses need intricate integrations with Amazon, Walmart, or ERP systems. Some require customized labeling, kitting, or cycle counting. Others need none of that.

A transparent provider explains these differences up front. A less transparent provider sends you a surprise invoice with a cheerful note that says 'thanks for your business.'

Why Setup Fees Do Not Need to Be a Punishment

Among the more entertaining bits of industry data is how widely setup fees swing. FulfillmentCompanies.net survey data shows that nearly 40 percent of 3PLs charge no onboarding fee at all, while another substantial cluster charges multi-thousand-dollar packages for what appears to be identical work. How can both be true? Simple: some 3PLs keep their costs down by owning their own tools.

G10 does exactly that. Connor explains that 'a big part of how we keep costs down is through simplicity of process... we do our own in-house integration. We do it all in-house.' When the integration developers are employees rather than contractors, nobody needs to buy extra hours. When the WMS was originally built by the current CTO, Bryan Wright, and his team, there is no need for long escalations or outside specialists. Bryan puts it plain: 'With G10 we can make that change extremely quickly because we have our own development staff... significantly quicker than the competition.'

This internal structure eliminates the hidden-fee game that frustrates so many merchants. The onboarding process becomes a fixed set of tasks, not a mystery box of billable hours.

The Human Factor That Quietly Lowers Cost

It is easy to talk about code and integrations. It is harder to talk about anxiety. Most brands switching to a new 3PL are carrying old injuries. They worry about downtime, lost inventory, mislabeled pallets, or a dreaded retailer chargeback that arrives like a math test you did not study for.

Joel Malmquist, VP of Customer Experience, sees this emotional side every day. He points out that every G10 client has 'a direct point of contact... someone you call stateside... and things are going to get done.' That level of support is not just comforting. It prevents mistakes. Mistakes are what make onboarding expensive.

Matt Bradbury, Director of Sales, adds an important warning about much larger competitors. He notes that clients bounce between 3PLs because 'they hear one thing and then their first invoice comes and it is completely different. You hear that hundreds if not thousands of times.' Predictability, especially in onboarding, is the cheapest resource in logistics.

Growth Plans Hidden Inside the Setup

There is a quiet truth in the interviews that does not appear on industry charts. Good onboarding is not just about today. It is about your future channels. Joel spells that out clearly: 'What channels are you trying to get into? How do you see your business growing? How can we help you get there?' Setup fees are often about mapping your brand for scale before scale hits you like a tidal wave.

Ask any merchant who went viral on TikTok. Growth is thrilling. Growth is also expensive when your systems were not built for the surge.

G10s onboarding team plans for surges from the beginning. Holly Woods, Director of Operations, describes how customers may say they expect 5,000 units, but the operations team plans above that because 'we want to make sure that we can handle over and above anything that might come through the door.' That level of preparation is worth more than a setup fee. It preserves your revenue when the spike arrives.

When Setup Fees Signal the Wrong Fit

There is a temptation to judge 3PLs by their sticker price. That is understandable. But a low-cost provider can become expensive quickly if the warehouse cannot execute. A high-cost provider can be equally expensive if they treat onboarding like a tollbooth.

The better question is structural: why does this provider charge what they charge? Does it reflect the complexity of your business or the inefficiency of theirs?

G10 charges minimal onboarding fees because the architecture is built to avoid waste. The developers who built the WMS work in the same building as the people configuring your labels. The operational staff has B2B experience baked into the system from day one. The leadership team has decades of Amazon, Chewy, and retail-compliance experience. And yes, the robots help.

Setup fees are not a tax. They are a story. Look for a story that shows competence, not chaos.

A Final Thought Before You Sign Anything

If you are choosing a 3PL right now, you know how much of your business will live or die by this decision. Onboarding is not a nuisance. It is the foundation of the entire relationship. As Maureen says, 'Service, transparency and owning our mistakes. That is how we earn and retain the trust of our customers.'

If you want clarity on setup fees, predictable onboarding, and a team that can scale with your ambitions from Shopify to Target and beyond, reach out to G10. We can walk the path with you, explain the costs without fog or drama, and help you build something sturdy enough to grow.

Let us talk about what you are building and how we can support it.