5 min read For growing businesses, the decision to stick with a third-party logistics provider or move to your own warehouse is more than just operational. It is a financial and strategic decision. Many companies initially choose 3PLs because they seem convenient, flexible, and scalable. However, as your business grows, 3PLs often reveal hidden fees, long term costs, and operational frustrations that can significantly impact your bottom line.
If you are considering the Own Lease Exit Move strategy, moving from a 3PL to your own warehouse may be one of the smartest decisions you make.
Leasing and Owning Your Warehouse
Leasing a warehouse in 2025 costs about 9 dollars per square foot per year. Warehouse costs have increased roughly 8.3 percent from 2022 to 2024, rising from 7.96 to 8.31 per square foot per year. Owning a warehouse removes the need to pay annual rent entirely. While it requires an upfront investment, owning your warehouse can save roughly the full lease rate over time. Owning gives full control of your space, your cost structure, and the flow of your inventory.
Owning or leasing is not just about money. It is a strategic decision. Controlling your own space ensures predictable costs, avoids surprise fees, and allows you to design your operations to fit your business perfectly.
3PL Costs Can Add Up
Using a 3PL can be convenient, but the costs can quickly add up and exceed expectations. On average, 3PL storage costs $20 per pallet per month, which comes out to $240 per pallet per year. For a mid sized business storing 1,000 pallets, that is $240,000 per year just for storage. Storage can also be calculated by volume, around $0.55 per cubic foot per month, which can quickly reach tens of thousands annually for larger inventories. Nearly half of all 3PL providers, about 49 percent, charge additional long term storage fees, further increasing costs.
3PLs also enforce monthly minimums. The average minimum spend is now around $517 per month, or $6,204 per year. On top of storage, fulfillment and inbound/outbound fees add even more. B2C fulfillment averages $3.18 per order, and B2B fulfillment is about $4.79 per order. For a business processing 50,000 B2C orders per year, that is $159,000 annually, and for 20,000 B2B orders, that is $95,800 annually.
Inbound and receiving fees are typically $12.91 per pallet or $0.35 per unit, so a shipment of 500 pallets could cost $6,455, and 10,000 individual units could cost $3,500 just to bring inventory into the 3PL. These costs accumulate rapidly as your business scales, making a 3PL significantly more expensive than leasing or owning your own warehouse at scale.
Hidden Costs When Leaving a 3PL
One of the biggest challenges with 3PLs comes when it is time to exit. Many providers make leaving difficult. Your inventory may be returned unorganized or mixed across pallets, which increases labor costs, slows operations, and frustrates your team.
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Sorting 1,000 pallets manually after leaving a 3PL can take 80 to 120 labor hours, costing roughly $1,356 to $2,034 at an average warehouse labor rate of $16.95 per hour.
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For larger inventories of 10,000 units, the labor to reconcile and reorganize stock can exceed 200 hours or $3,390.
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Additional administrative or shipping fees imposed by some 3PLs for contract termination can add $5,000 to $10,000 depending on volume.
By moving to your own warehouse, you avoid these hidden exit fees entirely, giving you predictable costs and smoother operations.
Labor and Operational Costs
Owning or leasing your warehouse provides clear operational and labor savings:
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Labor costs for receiving, picking, and shipping 1,000 pallets per year are roughly $16,950 if you manage in house. The same operation using a 3PL can easily double to $30,000 $35,000 due to fulfillment fees, volume surcharges, and unplanned labor costs.
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Controlling layout, shelving, and inventory processes in house reduces handling time by 20 to 30 percent and control of incorrect shipments being sent to customers, increasing accuracy, efficiency and lowering overtime costs.
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Owning your warehouse allows you to plan labor staffing efficiently without hidden or variable fees from a third party.
Why Owning or Leasing is Cheaper
Owning or leasing your warehouse can be two to three times cheaper than using a 3PL for the same space. Consider a simple example:
Owning or leasing a warehouse can be two to three times cheaper than a 3PL, especially as your business scales. Real numbers make this clear:
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Leasing 10,000 square feet of warehouse space at $9 per square foot per year costs about $90,000 annually.
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Owning the same space eliminates rent, gives long term asset value, and requires only the initial investment and standard operating costs like labor, utilities, and equipment.
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A 3PL storing the same 10,000 square feet could cost roughly $200,000 to $250,000 per year, not including fulfillment or inbound/outbound fees.
Example:
| Option | Storage Costs | Labor & Ops | Total Annual |
|---|---|---|---|
| Leasing 10,000 sq ft | $90,000 | $17,000 | $107,000 |
| Owning 10,000 sq ft | $0 ongoing rent | $17,000 | $17,000 + upfront investment |
| 3PL 10,000 sq ft | $240,000 | $35,000+ | $275,000+ |
These numbers show why the Own Lease Exit Move strategy is smart for businesses that want to save money and gain operational control.
Your Next Steps to Warehouse Independence
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Leasing or owning a warehouse is far cheaper than using a 3PL long term.
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3PL storage, fulfillment, and inbound fees add up quickly.
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Exiting a 3PL often comes with hidden costs and unorganized inventory.
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Owning your warehouse gives control, predictable costs, and scalable operations.
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The Own Lease Exit Move approach is a cost effective and strategic solution for growing businesses.
Owning or leasing a warehouse is not just about saving money. It is about gaining independence, efficiency, and scalability. Businesses ready to move beyond the limitations of a 3PL will find that taking control of their warehouse can be one of the most impactful decisions for operational and financial growth.
If you are ready to move away from 3PLs and want help organizing your warehouse and inventory, schedule a meeting with SKULabs today and start taking control of your operations.
