Build out a Cost (Pricing) Model
Before building out a cost (or pricing) model, it’s important to remember that cheaper isn’t always better. You may spend more money on the front end, but a good solution will likely save you money on compliance fines.
Working with an experienced 3PL that can build your supply chain efficiently and has the knowledge to mitigate costs on the back end is essential. It’s important, however, especially in today’s economy, to have flexibility. That’s why we provide various pricing options to best fit your needs, such as:
- Pallet rate: Setting the price for pallets per week lets you know how much you’re paying at the beginning of the week. This also offers the benefit to the supplier, the ability to budget and accrue as soon as the orders are dropped from the retailers.
- 100 weight pricing: This pricing model is based on a series of weight breaks that are established through the contracting process. The first weight break is referred to as the “min charge”, whereas any order that is under that set weight will pay that min charge. As orders grow in weight, pricing is determined by the weight break they fall into thereafter. This benefits a mid-sized customer that has weight that falls on either end of the light or heavy spectrum. As a result, you’re not set to just one price.
- Traditional LTL tariff pricing: Included with this type of pricing are pricing per lane, zip codes, mileage, and rate per mile (RPM). Also, this pricing model mimics what you’re used to which provides a familiar cost structure.