Third-party logistics (3PL) providers operate in one of the most complex and demanding supply chain environments.
Managing multiple clients, handling diverse inventory, and ensuring on-time deliveries—all while keeping margins high—requires more than just a standard Warehouse Management System (WMS). Without the right features, 3PL providers risk inefficiencies, billing errors, and operational bottlenecks that can hurt profitability.
So, what should a 3PL look for in a WMS? In this guide, we’ll break down the essential features that help 3PL providers streamline operations, the key benefits of implementing a 3PL-optimized WMS, and what you need to do to choose the right 3PL WMS for your business.
Must-Have Features in a 3PL-optimized WMS
A 3PL warehouse is fundamentally different from a standard warehouse operated by a brand.
Instead of managing an inventory pool of one company’s products, 3PL providers handle multiple clients each with their own product types, storage needs, billing structures, and fulfillment processes.
Here are the key features every 3PL provider should look for when choosing a WMS:
1. Automated 3PL Billing for Accuracy & Efficiency
3PL billing and invoicing is one of the most intricate aspects of third-party logistics management.
Unlike contract warehouses that follow fixed pricing models, 3PLs charge clients based on storage duration, order processing, handling, and additional value-added services.
So managing these billing structures manually can be time-consuming and error-prone.
A 3PL WMS should automate billing using activity-based billing and renewal storage billing to ensure clients are charged accurately and transparently. It should also support customizable billing rules, allowing warehouses to charge clients based on their client-specific pricing models.
2. Customer-Specific Workflows for Multi-Client Operations
A 3PL warehouse doesn’t operate on a one-size-fits-all model. Each client has unique storage, order fulfillment, and reporting needs, which means a rigid WMS can slow down operations and create inefficiencies. A 3PL’s WMS should enable its warehouses to configure that client’s picking strategies, inventory allocation methods, and more without disrupting the 3PL’s overall operations.
For example, some clients may require priority order processing, or rush orders based on specific criteria (same day, VIP, or delayed orders). Others might have custom storage conditions for temperature-sensitive goods.
Additionally, reporting requirements vary by client. A WMS should support custom dashboards and automated reports so clients can monitor their inventory in real time. This ensures visibility, transparency, and better customer satisfaction while reducing the need for manual status updates.
3. Custom Documents & Labels for Compliance & Branding
In third-party logistics (3PL), documentation and labeling requirements vary widely across clients and industries. Retailers, e-commerce platforms, and regulated industries often require strict compliance to specific invoices, packing slips, and shipping labels. A WMS designed for 3PL providers must support custom document generation.
For instance, large retailers like Walmart, Amazon, and Target require GS1/UCC-128 or SSCC labels for shipments that a 3PL WMS should automatically supply.
Beyond compliance, customized invoices, branded packing slips, and multi-language documentation enhance the customer experience. Clients may also require specific invoice formats, billing breakdowns, or region-specific tax details, which a flexible WMS should generate automatically.
4. Seamless Integrations With Client Systems
A modern 3PL WMS must integrate seamlessly with various client systems, including ERP, TMS, accounting platforms, and e-commerce storefronts. Without proper integrations, warehouses waste valuable time on manual data entry, increase error rates, and struggle with inventory mismatches.
A WMS should support:
- API-based connectivity for real-time data sharing.
- Plug-and-play integrations with ERPs, e-commerce platforms (Amazon, Shopify, Magento), and accounting software (QuickBooks, NetSuite).
- Automated order syncing, inventory updates, and invoicing across systems.
Seamless connectivity helps 3PL warehouses eliminate data silos, improve order accuracy, and reduce labor-intensive manual processes.
5. Advanced Inventory & Order Tracking
Managing inventory across multiple clients in a shared 3PL warehouse is challenging. Without real-time tracking, warehouses risk misallocated stock, stockouts, overages, and delayed order fulfillment. A 3PL-specific WMS must provide end-to-end visibility to ensure accurate inventory management and efficient order processing.
A robust inventory and order tracking system should include:
- Real-time inventory updates: Every stock movement—from receiving to putaway to order fulfillment—should be tracked instantly to prevent discrepancies.
- Multi-location visibility: Warehouses managing inventory across multiple fulfillment centers should be able to track stock across different locations in real time.
- Automated cycle counting: Instead of relying on time-consuming manual inventory audits, a WMS should support automated cycle counting to improve accuracy without disrupting daily operations.
- Lot & serial tracking: Certain industries, such as pharmaceuticals and food logistics, require lot and serial tracking for compliance and traceability. A WMS should enable tracking of expiration dates, batch numbers, and recalls effortlessly.
Key Benefits of Implementing a 3PL-optimized WMS
Implementing an advanced WMS offers several key benefits for 3PL operators. Here are some of the most significant advantages:
1. Configurable Workflows, Dashboards, and System Integrations
A highly configurable WMS can be tailored to meet the specific needs of your business. Configurable features allow for customization of workflows, dashboards, and reporting formats. Additionally, integration with existing systems like ERP, CRM, and TMS maintains a unified framework across your entire supply chain, facilitating real-time data flow and supporting better decision-making.
2. Faster Customer Onboarding and Seamless Setup
An ideal 3PL WMS simplifies the onboarding process for new customers, allowing for quick setup and configuration of customer profiles. This includes defining specific billing rules, inventory requirements, and reporting preferences, reducing the time to market for new clients. As a result, the focus can remain on delivering value-added services and fostering strong client relationships.
3. Real-Time Data, Analytics, and KPI Monitoring
Access to real-time data and advanced analytics is crucial for making informed decisions in logistics. A robust 3PL WMS provides powerful insights through comprehensive reporting and data visualization tools, enabling 3PL providers to monitor KPIs, identify trends, and uncover improvement opportunities. Customizable dashboards and automated alerts provide timely oversight of critical metrics and any operational issues, allowing for proactive management and swift corrective actions.
4. Scalability for Growth & High Order Volumes
As a 3PL business expands, managing higher order volumes and additional client accounts can become overwhelming without the right system in place. A scalable WMS supports multi-warehouse operations, peak season demand, and evolving client requirements without operational bottlenecks.
5. Enhanced Order Accuracy & Faster Fulfillment
A 3PL WMS reduces fulfillment errors by automating key warehouse processes, such as picking, packing, and shipping. With features like barcode scanning, automated order verification, and optimized picking routes, warehouses can significantly improve order accuracy and processing speed.
Fewer errors mean fewer returns, lower operational costs, and higher customer satisfaction. Faster fulfillment also enables 3PL providers to meet strict retailer SLAs and stay competitive in the fast-moving logistics space.
How to Choose the Right 3PL WMS for Your Business
Selecting the right 3PL Warehouse Management System (WMS) is a decision that affects every aspect of your operations.
To ensure you make the best choice, follow this step-by-step approach for evaluating and selecting a 3PL-focused WMS:
Step 1: Define Your Operational Challenges and Goals
Before evaluating WMS options, take a close look at your current challenges and long-term objectives.
What’s slowing down your warehouse today? Where do inefficiencies exist? How are unpredictable costs like developer time harming your margins? Identifying these issues will help you focus on solutions that directly address them.
For example, if billing errors are causing disputes and revenue loss, you need a WMS with automated invoicing and flexible billing models. If order fulfillment delays are affecting customer satisfaction, real-time inventory tracking and efficient picking workflows should be a priority. Integrations with ERP, e-commerce, and shipping systems may also be a necessity if you’re currently relying on manual data entry.
By outlining your must-have features and desired improvements, you can evaluate WMS options with a clear set of requirements rather than getting lost in feature lists that may not be relevant to your business.
Step 2: Shortlist WMS Solutions Designed for 3PL Operations
Not all WMS platforms are built for multi-client, multi-warehouse logistics. Many systems cater to single-company warehouses, which won’t provide the flexibility needed for 3PL providers managing diverse client needs, customized billing structures, and complex inventory workflows.
When evaluating WMS providers, focus on whether the system is purpose-built for 3PL operations. A strong 3PL-optimized WMS should support separate inventory tracking for multiple clients, flexible billing models, and configurable workflows. If a system requires workarounds to manage multi-client billing or fulfillment rules, it’s not designed for your business and will create long-term inefficiencies.
At this stage, narrow your search to 3-5 providers that align with your operational needs, ensuring they can handle both your current volume and future growth.
Step 3: Evaluate Integration Capabilities
A WMS should connect seamlessly with the tools you already use. Without proper integrations, your team will spend unnecessary time on manual data entry, duplicate work, and correcting mismatched records.
Make sure the WMS integrates with your ERP, accounting software, e-commerce platforms, and transportation management systems (TMS).
For example, if your business relies on NetSuite or QuickBooks for financial management, the WMS should sync billing and invoicing data automatically. If you manage orders from multiple sales channels like Amazon, Shopify, or Magento, order syncing should be seamless to prevent fulfillment delays.
The goal is to reduce operational friction by ensuring all systems communicate in real time, eliminating delays and data errors.
Step 4: Assess System Usability and Workflow Automation
A WMS should make warehouse operations more efficient, not add complexity. If a system is difficult to use or requires excessive manual steps, it will slow down your team instead of improving productivity.
During WMS demos, observe how intuitive the platform is for everyday users. A strong system should allow warehouse staff to easily navigate inventory tracking, order fulfillment, and reporting functions without a steep learning curve.
Workflow automation is also crucial—order picking, packing, and shipping should be streamlined to minimize human intervention and reduce processing times.
A good WMS should be configurable without requiring IT support for every minor adjustment. If making simple changes, such as modifying billing rules or adjusting picking strategies, requires custom development, the system may be too rigid for a dynamic 3PL environment.
Step 5: Ensure the System Can Scale With Your Growth
Your WMS should be capable of supporting business expansion rather than limiting it. Many 3PLs outgrow their software because it wasn’t designed to handle increasing order volumes, multiple warehouse locations, or additional service offerings.
Think beyond your current needs and ask whether the system can scale when:
- You add new warehouse locations or fulfillment centers.
- Your order volume doubles or peaks seasonally.
- You introduce new services like kitting, returns processing, or subscription fulfillment.
A scalable WMS provides the flexibility to grow without requiring frequent software changes or expensive upgrades. Choosing a system that can adapt to your future business model prevents costly migrations down the road.
Step 6: Compare Pricing and Long-Term Costs
Pricing varies significantly between WMS providers, but cheaper isn’t always better. Instead of focusing on upfront costs alone, consider the total cost of ownership (TCO), which includes implementation fees, training, ongoing support, and scalability costs.
Ask about the pricing model. Is it subscription-based, usage-based, or a one-time license? Determine whether the provider charges extra for API access, integrations, or additional users.
A lower-cost WMS that requires expensive add-ons for essential features may cost more in the long run than a slightly higher-priced system with built-in capabilities.
More importantly, consider the return on investment (ROI). If a system reduces fulfillment errors, eliminates billing mistakes, and improves efficiency, the cost will be quickly justified by faster turnaround times and better client retention.
Step 7: Plan for a Smooth Implementation
Once you’ve chosen the right WMS, a structured implementation plan is essential for a successful transition. Without proper onboarding, your team may struggle with adoption, leading to disruptions in warehouse operations.
Work with the WMS provider to develop a clear implementation roadmap. Assign an internal project lead to oversee the transition, ensure that data migration is handled carefully, and schedule phased rollouts to minimize downtime. Training should be hands-on and practical, equipping warehouse staff with the knowledge to use the system effectively from day one.
A strong WMS provider will offer dedicated support throughout implementation, ensuring your team is comfortable with the system and any unexpected challenges are resolved quickly.
Why Da Vinci WMS is the Best Choice for Many 3PL Providers
Da Vinci Unified WMS is a powerful solution optimized specifically for 3PL providers, offering:
- Multi-client inventory management to keep operations organized and error-free.
- Automated billing and invoicing to eliminate revenue loss and streamline financial processes.
- Integrations with e-commerce platforms, ERP systems, and TMS for smooth data flow.
- Real-time inventory and order tracking to prevent stock issues and improve fulfillment speeds.
- Scalability to handle high order volumes and multiple warehouse locations as your business grows.
With its 3PL-specific features and proven reliability, Da Vinci WMS helps logistics providers operate more efficiently and profitably. A system that lacks multi-client management, automated billing, real-time inventory tracking, and seamless integrations, on the other hand, will slow down operations and create unnecessary manual work.
Request a demo today to see how Da Vinci Unified WMS can transform your 3PL operations.