What pay-per-pallet storage is
A third-party logistics provider (3PL) or public warehouse runs a building full of racking and staff. Your goods take up pallet positions beside other customers' goods, and you never get a key. You tell the operator what's arriving, the operator receives it and puts it away, and you send orders for what should ship out.
Your inventory lives in the operator's warehouse management system. The relationship is a service contract, not a tenancy: you're buying storage and labour, not space.
When it beats renting your own space
- Your inventory swings with the season or with sales, so a fixed bay would sit half empty for part of the year
- You'd otherwise need to hire staff, buy a forklift, install racking and run inventory software
- Your pallet count is well below what a small bay would hold efficiently
- You need stock in more than one city — Calgary and Edmonton, say — without two leases
- You're testing a product or a market and don't want a multi-year commitment
When it stops making sense
Storage is only part of the bill. Handling is charged every time a pallet or carton moves, so a fast-turning product can cost more in handling than in storage. It also stops working when you need hands-on access — assembly, custom work, quality checks, showing product to buyers — or when the operator's cut-off times start setting your shipping schedule.
Products that don't palletize well, such as long lengths, odd shapes or loose bulk, can be awkward or costly to store this way. And once your steady pallet count would fill a bay you could rent and staff, compare the total monthly spend, not the storage line alone. Warehouse vs storage unit vs 3PL walks through that comparison.
How it's priced
Public warehouses typically price storage per pallet position per period, plus handling in and out and other activity fees. The structure matters more than any single rate:
| Charge | What it covers | What drives it |
|---|---|---|
| Storage | Each pallet position, per week or month | Pallet size and height, stackability, temperature, how the period is billed |
| Receiving | Unloading, checking, labelling, putaway | Palletized or floor-loaded containers, number of SKUs, paperwork quality |
| Outbound handling | Picking and loading | Full pallets, cases or single units |
| Order fees | Per order, line or unit for e-commerce | Order volume and profile |
| Accessorials | Wrapping, relabelling, kitting, returns, project labour | How clean and consistent your inbound is |
| Minimums and setup | Monthly minimum, onboarding, system integration | Account size and complexity |
Inventory control: what you give up
You're trusting someone else's counts. Ask for online inventory visibility, regular cycle counts and a clear process for correcting discrepancies. If you sell food, health products or anything with lot numbers or expiry dates, confirm the operator tracks them and is set up for your product class.
Warehouse terms commonly limit the operator's liability for loss or damage, often well below what the goods are worth. Read the limit, then insure the gap with your own inventory coverage. Operators also commonly have a right to hold goods for unpaid charges, so a billing dispute can hold up your stock.
The paperwork
Expect a warehousing services agreement and a rate sheet. Read them for the term and the notice needed to end it, how and when rates can rise, minimums, service levels and cut-off times, the claims process and its deadlines, liability limits, insurance, and what it costs to ship everything out when you leave. Exit costs are easy to miss. Put the full quote into the monthly cost tool beside a bay rental before you choose.
Alberta notes
Storage height, racking and dangerous goods are fire-code questions, so not every operator can take batteries, aerosols, fuels or other dangerous goods — ask before you request a quote. Food and health products can bring their own licensing and handling rules. Alberta has no provincial sales tax; ask how GST is shown on invoices.
Winter matters too. If your product can't freeze, confirm the storage area is heated and that goods won't sit on an unheated dock or trailer while they wait to be received.
How to find one and what to ask
Operators quote best when you give them a real profile: how many pallets, how many SKUs, how goods arrive, how many orders ship and how all of that changes by season. Get every quote on the same profile so you can compare them line by line, and visit the building before you commit. Then work through the questions below.
What to ask a 3PL before you sign
- Send your real profile — pallets, SKUs, inbound loads, orders — and ask for a quote built on it
- How is storage billed: a full period on receipt, split periods, or by the day?
- What is the monthly minimum, and is there a setup or integration fee?
- What are the receiving and shipping cut-off times, and the stated turnaround?
- Can you see inventory online in real time, including lots and expiry dates?
- How are counts reconciled, and how are discrepancies credited?
- What is the operator's liability limit, and what must your own insurance cover?
- Can they store your product class — food, health products, batteries, aerosols or other dangerous goods?
- What notice ends the agreement, and what does it cost to move everything out?
- Can you visit the building, and who is your day-to-day contact?
Questions people ask
How does pay per pallet storage work?
You pay for each pallet position your goods occupy for each billing period, plus fees each time goods are received, picked or shipped. The operator's staff do the handling and keep the inventory records; you send notice of inbound shipments and orders for outbound ones. Most operators also set a monthly minimum and may charge for setup or special work.
Is a 3PL cheaper than renting a warehouse?
Sometimes. A 3PL often wins when volumes are small, seasonal or spread across cities, because you don't pay for empty space, staff or equipment. It can lose when goods move constantly, because handling fees add up, or when your steady volume would fill a bay you could run yourself. Compare the total monthly spend on both, not the storage rate alone.
What is a pallet position?
A pallet position is the space one pallet occupies in racking or on the floor, up to a set footprint and height. Oversize or overweight pallets may count as more than one position. Some operators allow stable pallets to be stacked and bill accordingly. Ask for the operator's pallet specifications before you ship, because non-standard pallets can trigger rework fees.
Can I store just a few pallets in a warehouse?
Yes. Many public warehouses take small accounts, though most set a monthly minimum charge, so very small volumes can cost more per pallet than the rate sheet suggests. If you want to reach a handful of pallets yourself, a shared warehouse membership or a storage unit may suit better. Compare what each option actually includes.
What happens if a 3PL loses or damages my inventory?
You make a claim under the warehousing agreement, usually within a set time after you discover the problem. The operator's liability is commonly limited by the agreement, often to less than the goods' value, so your own inventory insurance matters. Keep clean inbound records — counts, photos, packing lists — so a claim can be proven.
Reviewed 2026-09-30 · General planning guidance · Sources and boundaries