Dedicated
Warehousing

The decision between dedicated and shared warehousing comes down to volume, control, and cost structure. Both models are valid — the question is which fits your business.

Shared warehousing economics

Shared 3PL pools resources across multiple clients. You pay variable rates per pallet stored, per unit picked, per order shipped. Costs scale with volume — small months cost less, peak months cost more. No fixed overhead. Best for brands with unpredictable volume, smaller scale (under $1M annual logistics spend), or simpler operational needs.

Trade-offs: less control over operations, your inventory mixes with other clients', custom workflows are limited, branded operations aren't typically possible.

Dedicated warehousing economics

Dedicated arrangements use fixed-cost pricing — you pay a monthly fee for the dedicated space and labor regardless of volume, plus variable rates for transactions above baseline. The fixed cost covers your dedicated infrastructure. At higher volumes, this works out cheaper per unit than shared.

Trade-offs: requires meaningful volume commitment (typically $1M+ annual spend), longer contracts (3-5 years), and exposure to fixed costs during slow periods. Best when volume is predictable, scale is sufficient, and operational control or branding matters.

Hybrid approaches

Many real-world arrangements combine both: dedicated zones for high-volume, predictable inventory (fixed cost) and shared overflow capacity for seasonal peaks or new product launches (variable cost). This optimizes total cost — you don't pay dedicated overhead for inventory that doesn't need it, but you also don't sacrifice the operational control where it matters.

We support hybrid arrangements where appropriate. The conversation usually starts with which SKUs and operations need dedicated treatment, and which can flex through shared capacity.

Branded operations

For premium and luxury brands, dedicated operations enable a branded unboxing experience that shared operations can't match. This includes:

• Custom packaging — branded boxes, custom fill (printed tissue, branded packing material), branded tape, custom inserts
• Custom kitting stations — dedicated areas for assembly with branded equipment
• Quality control checkpoints — dedicated QC teams trained on brand standards
• Unboxing experience design — coordination with marketing teams on visual presentation
• Photography and content support — for product launches and marketing materials

For brands where the box matters as much as the product, dedicated operations are often non-negotiable.

SLA structures

Dedicated arrangements include custom SLA structures with performance commitments and consequences. Standard SLA components:

• Pick accuracy targets (typically 99.5%+ unit-level)
• Shipping cutoff guarantees (e.g., orders placed by 2 PM PT ship same business day)
• OTIF targets for retail vendors (typically 98%+)
• Inventory accuracy thresholds (cycle count variance under 2%)
• EDI compliance rates for retail-bound shipments
• Chargeback rate caps
• Customer service response times for client-facing issues
• Inbound receiving turnaround (typically 24-48 hours dock to available inventory)

SLAs include performance penalties for misses (typically credits against monthly fees) and gainshare arrangements for over-performance. Performance reported through dedicated dashboards with monthly business reviews.