Logistics Glossary
Logistics Glossary: Every 3PL, FBA and Fulfillment Term Explained
We wrote this the way we explain it to a new client standing on our Houston warehouse floor — plain definitions for the acronyms that show up on every RFQ, plus what each one actually costs once it hits your invoice.
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The six acronyms on every fulfillment RFQ
3PL, FBA, FBM, DTC, SKU and WMS are the terms that show up on almost every fulfillment quote you'll read. Learn these six and you can decode any warehouse's pricing sheet, including ours.
| Term | Stands for | What it means |
|---|---|---|
| 3PL | Third-Party Logistics | An outside company that stores your inventory and ships your orders instead of you doing it yourself. We're a 3PL — you send inventory, we handle storage, picking, packing and shipping. |
| FBA | Fulfillment by Amazon | Amazon's own warehouse network. Sellers ship inventory to Amazon, and Amazon picks, packs and ships the orders. Before it reaches Amazon, that inventory has to be prepped to Amazon's labeling and packaging rules — that's what we do at $0.75/unit. |
| FBM | Fulfilled by Merchant | You (or your 3PL) pick, pack and ship the order yourself instead of Amazon doing it. Also called seller-fulfilled. We fulfill FBM orders at $2.00–$4.00 (custom over 15 lb) depending on weight. |
| DTC | Direct-to-Consumer | Selling straight to shoppers through your own site or a marketplace, skipping wholesale distributors. Shopify, TikTok Shop and Walmart orders are all DTC. |
| SKU | Stock Keeping Unit | A unique code for one specific product variant — a size, a color, a bundle. Every SKU needs its own count in inventory; SKU count, not order volume, is usually what determines how much space you need. |
| WMS | Warehouse Management System | The software that tracks what's on the shelf, what's been picked, and what's shipped. We run our own real-time WMS so clients can see inventory counts without calling us. |
Freight and receiving terms
LTL, FTL, BOL, ASN and POD describe how a shipment physically moves and gets documented before it lands on our dock. Get the paperwork wrong and a truck sits outside instead of getting unloaded.
| Term | Stands for | What it means |
|---|---|---|
| LTL | Less-Than-Truckload | Your freight shares a trailer with other shippers' freight because it doesn't fill a full truck. Cheaper per pallet than FTL, slower transit. |
| FTL | Full Truckload | Your freight fills the whole trailer. Faster and more direct, priced for the full truck regardless of how much you actually loaded. |
| BOL | Bill of Lading | The legal shipping document a carrier signs at pickup — it lists what's on the truck and who's liable for it in transit. |
| ASN | Advance Shipping Notice | A heads-up sent before your inventory arrives, listing what's in the shipment and when it lands. Send us one and receiving goes faster because we know what to expect on the dock. |
| POD | Proof of Delivery | The signed confirmation that a shipment was delivered — used to resolve "it never arrived" disputes with a carrier. |
| Devanning | — | Unloading a shipping container, usually one that arrived by ocean freight from overseas. We devan containers as part of receiving, quoted per shipment. |
| Dimensional weight | DIM weight | A carrier's calculated weight based on a box's size, not just what's on the scale. Large, light boxes often get billed at DIM weight instead of actual weight — it's why oversized packaging quietly inflates shipping cost. |
| Cutoff time | — | The deadline for same-day processing. Ours is 2pm CT, Monday–Saturday — inventory or orders in before then ship or get prepped that same day. |
Warehouse floor terms — pick, pack and inventory control
Pick and pack, kitting, cross-docking and cycle counts describe what actually happens to your inventory between "it arrived" and "it shipped." These are the terms that determine what a warehouse bills beyond the base per-order rate.
| Term | What it means |
|---|---|
| Pick and pack | Pulling the right item(s) off the shelf for an order, then boxing and labeling it to ship. This is the core FBM service — $2.00 to $4.00 (custom-quoted over 15 lb) per order depending on weight — packaging materials from $0.25. |
| Kitting | Assembling multiple SKUs into one sellable unit before it's ordered — a gift set built ahead of time, for example. Custom-quoted; tell us the components and we price it in 24 hours. |
| Bundling | Similar to kitting, but usually picked and packed together at order time rather than pre-assembled. We bundle at the standard per-order rate — no forced preassembly unless you want it. |
| Cross-docking | Moving inventory straight from an inbound truck to an outbound truck with little or no storage in between. Common for high-velocity freight, rare for DTC brands holding safety stock. |
| Cycle count | A partial, rolling inventory count — counting a portion of SKUs regularly instead of shutting down for one full physical count. Keeps a WMS accurate without stopping operations. |
| Dunnage | The filler material — air pillows, packing paper, bubble wrap — that keeps product from shifting in a box. Included in our per-order and per-unit rates, no separate line item. |
| Chargeback | A fee a retailer or marketplace deducts from your payout for a compliance miss — wrong label placement, missing ASN, incorrect carton markings. Amazon and big-box retailers both use them. |
| Backorder | An order placed for inventory you don't currently have in stock. A WMS should flag this before it becomes a shipping delay, not after. |
What these terms actually cost at KAK
Here's the glossary translated into our published rates — the numbers behind the terms, locked through Q1 2027. Full breakdown on our price list and pricing page.
FBA prep
$0.75/unit
Full-service FBA handling for units under 5 lb is $0.75/unit, including FNSKU labeling and prep labor. Materials are separate: polybag $0.20/unit and bubble wrap $0.20/unit when needed. Receiving, storage and outbound freight are separate. Lean label-ready units start at $0.50; heavier units use the published weight bands.
FBM pick & pack
$2.00–$4.00 (custom over 15 lb)/order
By weight: $2.00 up to 5 lb, $2.75 for 5–8 lb, $4.00 for 8–15 lb, custom-quoted over 15 lb.
Pallet storage
$25/pallet, monthly
Climate-controlled, billed for the fraction of the month you actually use — $25/month for a pallet held all month.
Receiving
$20/pallet ($5/carton)
.
Returns processing
$1.50/return
Inspection included.
Kitting & freight
Custom-quoted
Kitting, bundling, LTL/FTL freight, devanning and white-glove — tell us the specs, get a number in 24 hours.
No minimums, no setup fees, no contracts — month-to-month. Postage passed through at discounted USPS/UPS/FedEx rates, no markup.
What a month actually costs — a worked example
Take a skincare brand launching with 500 units on Amazon FBA plus its own Shopify store doing about 100 FBM orders a month, holding 5 pallets of backstock. Here's the math using only the published rates above.
| Line item | Volume | Rate | Cost |
|---|---|---|---|
| Amazon FBA prep (one-time, at launch) | 500 units | $0.75/unit | $375.00 |
| Receiving (one-time, at launch) | 20 pallets | $20/pallet ($5/carton) | $400.00 |
| FBM pick & pack (monthly, under 5 lb) | 100 orders | $2.00/order | $200.00 |
| Pallet storage (monthly) | 5 pallets | $25/pallet/mo | $125.00 |
| Returns (monthly, ~5% rate) | 5 returns | $1.50/return | $7.50 |
Launch month total: about $1,107.50. Every month after that — no new FBA prep, no new receiving — runs closer to $332.50 for the same 100 FBM orders, 5 pallets of storage and normal return volume. Scale to 300 orders a month and only the FBM line changes: 300 × $2.00 = $600 plus storage and returns.
These numbers use only our published rates. Send us your SKU list and order history and we'll run your real numbers within 24 hours — get a quote.
Terms that show up in every RFQ — minimums, contracts, integrations
MOQ, setup fee and integration are the terms buyers ask about most once they've read a price list. Here's what they mean and where we land on each.
- MOQ (Minimum Order Quantity): the smallest volume a vendor will accept. We have no MOQ — you can start with a single unit.
- Setup fee: a one-time charge to onboard your account. Many 3PLs charge one; we don't — there's no setup fee.
- Contract term: the length of time you're locked into an agreement. We run month-to-month, no cancellation penalties.
- Peak-season surcharge: a temporary rate increase some warehouses add around Q4. We don't apply one — the rates above hold year-round through Q1 2027.
- Integration: the software connection between your sales channel and a 3PL's WMS. We connect to Shopify, TikTok Shop, Walmart, eBay, BigCommerce, WooCommerce, Etsy, Magento and Amazon FBM so orders and tracking sync without manual entry.
- Lot / expiration-date tracking: monitoring inventory by batch and shelf life instead of just total count — available in our WMS for clients who need it (supplements, cosmetics, food-adjacent goods).
- Liability / cargo insurance: what a 3PL covers if it damages or loses your inventory. We carry coverage up to $500,000 per occurrence and are fully liable for our own handling errors.
Full service breakdown on our 3PL warehouse service page, storage specifics on our storage page, or talk through your setup directly via contact us.
Frequently asked questions
What's the difference between a 3PL and a warehouse?
What's the difference between FBA and FBM?
What is a SKU and why does SKU count matter for pricing?
What is dimensional weight and does it affect my fulfillment cost?
What does monthly billing mean for pallet storage?
Do I need to send an ASN before shipping inventory to KAK?
What does no minimums actually mean?
What is kitting and is it included in the per-order rate?
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Lean handling under 5 lb: FBA $0.50/unit or FBM $1.75/order for pre-packed goods. Full service: $0.75/FBA unit or $2.00/FBM order. Materials and postage are separate; storage is $25/pallet/month.