3PL Billing & Client Profitability Calculator
Enter your rate card, what it costs you to serve, and each client’s monthly volumes. See revenue and contribution margin by client, which clients fall short of your target, and what they would need to be billed to get there. Everything runs in your browser, and nothing you enter is sent anywhere.
Profit by client
- Revenue
- $59,248
- Contribution margin
- $12,680 (21.4%)
- After $8,000 overhead
- $4,680 (7.9%)
1 of 3 clients is short of your 20% target. Billing them about $1,642 a month more in total would bring each one to target.
| Client | Revenue | Direct cost | Contribution | Margin | Status |
|---|---|---|---|---|---|
| Client BNeeds $1,642 more a month (+7.5% on their bill) | $21,783 | $18,740 | $3,043 | 14.0% | Below target |
| Client C | $19,525 | $15,122 | $4,403 | 22.5% | On target |
| Client A | $17,940 | $12,706 | $5,234 | 29.2% | On target |
A planning estimate from the figures you enter. It leaves out minimum monthly charges, freight and other pass-through billing, and it does not allocate overhead to clients.
How the calculation works
- Each client’s volumes are multiplied by your rate for storage, receiving, order handling and picking, then reduced by any discount they have.
- Other revenue you bill outside the rate card is added, at full value.
- Your cost to serve is applied to the same volumes, plus any other direct cost, to get direct cost.
- Revenue less direct cost is the contribution, and as a share of revenue it is the contribution margin. Clients under your target are flagged and sized.
- Overhead is then taken off the total once, to show the operating profit.
Worked example
These figures are illustrations, not industry averages. Three clients bring in $59,248 a month against $46,568 of direct cost, a contribution of $12,680 (21.4%). After $8,000 of overhead, the operating profit is $4,680.
| Client | Revenue | Direct cost | Margin | Status |
|---|---|---|---|---|
| Client B | $21,783 | $18,740 | 14.0% | Below target |
| Client C | $19,525 | $15,122 | 22.5% | On target |
| Client A | $17,940 | $12,706 | 29.2% | On target |
Client B is the one to look at. It is a high-volume order client on a discounted rate, and it earns 14.0% against a 20% target. Billing it about $1,642 more a month, roughly 7.5% on its bill, would bring it to target, whether through its rates, its discount or a minimum.
Frequently asked questions
How do 3PLs charge their clients?
Most 3PLs bill for activity: storage per pallet or per bin each month, receiving per pallet or per unit, order handling per order, picking per line or per unit, and separate charges for other services such as kitting, labeling or returns. Some add minimum monthly charges.
How do you calculate 3PL margin by client?
For each client, add up what you billed (rate-card charges after any discount, plus other billed services) and subtract what it cost you to deliver that activity. The difference is the contribution, and dividing it by revenue gives the contribution margin.
Why does this calculator not spread overhead across clients?
There is no neutral way to allocate rent, management and systems. Spreading them by revenue, by pallets or by orders each gives a different answer about which client is unprofitable. Contribution margin does not depend on that choice, so overhead is taken off once, in the total.
What is a good margin for a 3PL client?
It depends on your overhead, your service level and your client mix, so no single number is right for everyone. Set the target to the contribution margin your own overhead and profit goals require, and the calculator shows who falls short of it.
What does this calculator leave out?
Minimum monthly charges, freight and other pass-through billing, seasonal swings in volume, and the setup or onboarding work for a new client. It works from the monthly figures you enter, so treat it as a planning estimate.