3PL Due Diligence Before an Acquisition Closes

By Bernardo Campelo, Forbes Business Council E-Commerce Leader, Amazon SPN Certified provider, Amazon SP-API authorized partner, and Founder of PrepVia.

A buyer called me in March with a signed letter of intent and six weeks to close. He had a profit and loss statement reviewed by two accounting firms, a trademark search already filed, and a lawyer combing through the Amazon account for suspended listings or policy strikes. Nobody on his team had asked a single question about the warehouse holding the inventory he was about to own.

That gap is not rare. It is close to universal. Diligence checklists built for an Amazon acquisition were written by people who think in profit and loss lines and account health, and a 3PL contract sits outside both. The relationship between the target brand and its prep center is not on the balance sheet and does not show up in Seller Central, which is exactly why buyers walk past it.

The surprise rarely lands on day one. It lands three weeks after closing, when the new owner asks for a unit count and gets a number that does not match what the seller represented, or asks for a rate card and learns the agreement renewed itself for another year the week before the deal closed. Every 3PL relationship attached to a brand being acquired has to be audited on its own, against a fixed list of items, before the wire goes out, because the contract, the inventory, and the invoices a buyer inherits do not renegotiate themselves after closing.

The Contract You Are About to Inherit

The agreement between the target brand and its 3PL was signed by the seller's entity, not by the buyer, and an acquisition does not transfer that contract automatically. Whether it transfers at all, and on what terms, depends on language most buyers never read until after the deal is done.

Start with the renewal date. Many 3PL agreements auto-renew for a full term, often a year, unless either side gives notice inside a window that closes sixty or ninety days before the anniversary. If closing lands inside that window and nobody sends a notice, the buyer inherits a fresh one-year term they never negotiated, at rates set before the acquisition was ever discussed.

Notice period and exit fee matter even when the plan is to keep the current provider. A buyer who does not know the cost of leaving has no leverage to renegotiate rates after closing, because the seller's old terms are the buyer's only terms until notice runs out. Pull both numbers before signing anything, not after owning the brand.

Assignability on a Change of Control

The clause that decides everything is the one covering assignment or change of control. Some agreements are personal to the signing entity and terminate automatically on a sale. Others require the 3PL's written consent before the contract can move to a new owner. A few say nothing at all, which is its own risk, because silence gets interpreted by whichever side has more leverage at the moment of the dispute.

Ask the target's 3PL directly, in writing, whether the current agreement survives a change of control. Do this before closing, while the buyer still has the leverage of a deal the 3PL wants to see complete. A provider that is well run and transparent about its rate card, the kind covered in a proper prep center agreement checklist, will usually confirm inside a single email. One that stalls on the question is telling you something about how it will behave after closing too.

Who Actually Signed It

Small brands often operate on an agreement signed by a founder who is not staying on, or on terms never reduced to writing past an email chain and a rate sheet. Verbal understandings about volume discounts or waived fees do not survive a change of ownership, because the new owner has no relationship with the person who made those promises. Get the 3PL to reconfirm every rate and term in writing, addressed to the buyer's entity by name. Anything missing from that confirmation should be treated as gone the day the deal closes, and priced accordingly.

Physical Inventory Against the System, and Who Pays the Gap

The unit count in the deal deck almost always comes from the seller's own inventory management software, not from a physical count at the warehouse. Software drifts from reality for ordinary reasons: a receiving error nobody corrected, units marked shipped that never left the dock, a return logged twice. None of these show up until someone actually counts the boxes.

Commission an independent cycle count at the 3PL inside the diligence window, and reconcile it against the seller's system, the 3PL's own records, and what Amazon's inventory ledger shows for units already inbound. The three rarely match exactly, and a small gap is normal. A gap the seller cannot explain is not.

The specific failure to watch for is a declared count that is higher than a received count, the same pattern covered in declared versus received units. A brand with a habit of overstating what shipped is a brand where the physical count at the 3PL is the only number worth trusting, and it is worth trusting only after someone independent has actually counted it.

The purchase agreement needs a mechanism for who pays if the count comes back short, not a handshake about it. Set a cutoff date, define which party owns inventory movement before and after that date, and write a true-up clause that adjusts the purchase price or triggers an escrow release based on the verified count, not the seller's spreadsheet.

Open Invoices, Aged Storage, and the Lien Hiding in the Warehouse

A warehouse holding goods for unpaid storage or handling charges typically has a lien on those goods under state warehouse law, in most jurisdictions built on Article 7 of the Uniform Commercial Code, whether or not the contract mentions it. That lien travels with the inventory, not the seller's balance sheet, and a buyer who closes without checking the account status can find outbound shipment blocked on day one over a bill they never saw.

Request the current balance directly from the 3PL, not from the seller. A seller behind on payment has every incentive to describe the relationship as current, and even one who is not behind may not have the most recent invoice fully reconciled. A written statement from the provider, dated inside the diligence window, is the only version of this number worth relying on.

Aged storage is the quieter version of the same risk. Units sitting in a warehouse for six, twelve, or eighteen months accumulate storage charges that escalate the longer they sit, on a clock independent of Amazon's own aged inventory surcharge, the fee Amazon used to call long-term storage. A seller current on monthly invoices can still be carrying a large unbilled balance tied to slow-moving inventory nobody has reconciled in months. Ask for an inventory aging report by receipt date, not just a current invoice, since the invoice only shows what has already been billed.

Make closing conditional on a lien release or a written confirmation of zero outstanding balance from the 3PL directly. A verbal assurance from the seller that everything is paid does not bind the warehouse, and it does not stop a lien from attaching the moment a payment is missed after closing, on a balance the buyer never knew existed.

The Real Cost Per Unit, Not the Number in the Deal Deck

The landed cost figure in most deal decks covers the manufacturer's price and inbound freight, and stops there. It rarely includes what it actually costs to get a unit from receiving at the 3PL to sellable at Amazon, which is the number that determines whether the margin in the deck survives past closing.

Where the Deck Number Hides Costs

Several categories almost never make it into a seller's cost summary: prep and labeling fees billed per unit, storage charged after any free window expires, returns processing, and Amazon's own inbound charges layered on top. None of this is hidden on purpose. It is the kind of line item that gets absorbed into a general expense account and never traced back to a specific SKU.

Request twelve months of actual invoices from the 3PL, itemized by SKU, and reconcile them against the seller's stated cost per unit rather than accepting the seller's spreadsheet as the source of truth. This is the same discipline behind a clean true profit per ASIN figure, and it matters more in an acquisition than in ordinary operations, because the number determines what the buyer is actually paying for.

Once the real cost is reconciled, compare it against a trusted benchmark. A transparent operator publishes exact figures rather than a vague range, the kind of published pricing that lets a buyer check whether a target's real cost per unit sits in line with the market or is quietly inflated.

Twelve Months of SLA History and Every Open Amazon Claim

A 3PL that performs well on a diligence call in June tells a buyer almost nothing about how it performs in November. Ask for month by month receiving turnaround for the trailing twelve months, not a summary, and not the single best month the provider chooses to highlight.

The pattern that matters most is what happens during the brand's own peak. A provider whose turnaround holds steady from January through September and then slips for six weeks around the holidays is not unreliable in general, it fails exactly when the brand generates the largest share of its annual revenue, the same trap covered in why most prep center SLAs are misleading. If the acquisition closes in the fall, that pattern becomes the buyer's problem in the first quarter of ownership.

Alongside turnaround data, pull every open case tied to the brand's inventory: pending reimbursement claims for lost or damaged inbound units, denied claims that were never appealed, and any compliance flag traced back to a labeling or packaging error at the 3PL. A history of denied claims, the pattern covered in why Amazon denies FBA reimbursement, often points to a documentation gap at the warehouse, one that does not close itself when ownership changes.

Ask the seller to export the full case history from Seller Central, then cross-check it against the 3PL's own incident log. The two records rarely match, and the gap between them is usually where the real risk sits.

The Audit Checklist: What to Pull Before You Sign

Eight items cover most of what actually goes wrong after an acquisition closes. Each one has a specific document that proves it, and each one has a specific cost to skipping it.

None of these are unusual requests. A 3PL with nothing to hide will produce all eight inside a week. One that stalls, deflects to the seller, or produces numbers that do not match what the seller already claimed is itself a finding, independent of whatever the documents eventually show.

When the Audit Finds a Problem: Reprice, Holdback, or Switch on Day One

An audit that turns up nothing is rare and worth celebrating. An audit that turns up something is normal, and the response depends on what kind of problem it is, not on how far along the deal already sits.

Repricing is the cleanest option when the finding is quantifiable. An inventory shortfall has a dollar value, and so does an aged storage balance. Adjust the purchase price by that amount at closing and the problem is solved before it becomes the new owner's.

An escrow holdback fits findings that need more time to verify than the closing calendar allows. If a second physical count cannot finish before the deadline, or an Amazon claim is still pending, hold back an amount tied to the worst case exposure and release it on a defined date once the number is confirmed, rather than accepting the seller's estimate on faith.

Switching providers on day one is the right call when the problem is the 3PL itself rather than a single number. Chronic SLA misses during peak, a contract that will not assign, or a payment history that signals broader financial distress are not findings a buyer negotiates around. They call for replacing the relationship, and the phased method for doing that without a stockout, covered in how to switch 3PLs without losing a quarter, works the same way whether the brand was always in the portfolio or was just acquired.

Whichever lever applies, decide before the signature, not after. Leverage over a 3PL relationship a buyer is inheriting is highest in the weeks before closing and disappears almost entirely the moment the wire clears.

Frequently Asked Questions

What should I ask a target brand's 3PL directly, instead of relying on the seller?

Ask the 3PL for the current outstanding balance, a physical unit count dated inside the diligence window, twelve months of actual invoices by SKU, and written confirmation of how the agreement handles a change of control. A seller has an incentive to describe all four favorably. The 3PL, asked directly and in writing, has no reason to.

Does a 3PL contract transfer automatically when a brand is acquired?

No. The agreement belongs to the seller's entity, and whether it survives a change of ownership depends on the assignment or change of control clause. Some agreements terminate automatically on a sale, some require the 3PL's written consent, and some say nothing at all, which leaves the outcome to whichever side has more leverage when the question comes up.

What if the physical inventory count does not match what the seller represented?

Treat the gap as a finding with a dollar value, not a rounding error. A small, explainable difference is normal in any warehouse. A gap the seller cannot explain should reduce the purchase price by the value of the shortfall or move into an escrow holdback pending a second count, and the purchase agreement should specify which, before closing, not after.

Can a 3PL refuse to release inventory to a new owner after an acquisition closes?

Yes. Most 3PLs hold a lien on stored goods for unpaid storage and handling charges under state warehouse law, and that lien attaches to the inventory regardless of who owns the brand. A new owner has no relationship with the 3PL until the contract is confirmed in writing, which is why the balance needs to be verified directly with the provider before the deal closes.

How far back should SLA performance be checked before buying a brand?

Twelve months, covering at least one peak season if the brand has been operating that long. A provider that performs well on a spring diligence call can still be the same provider that missed turnaround for six weeks the previous November, and that pattern only shows up in month by month data, not a summary.

What counts as a hidden storage liability at a 3PL?

Inventory that has sat in the warehouse for months without moving, accumulating storage charges that escalate the longer it stays and that may not be fully reflected in the current invoice. An inventory aging report by receipt date, not just the latest statement, is the document that surfaces this before it becomes the new owner's bill.

Should the purchase agreement include a holdback tied to 3PL findings?

In most cases, yes. A holdback gives both sides time to verify a finding, such as an unresolved unit count or a pending Amazon claim, without delaying the closing. Define the amount, the verification method, and the release date in the agreement, rather than relying on a side conversation with no enforcement mechanism after the wire clears.

Final Take

Buyers spend weeks on a profit and loss statement and a trademark search and walk past the one relationship that determines whether the inventory they are buying actually exists, actually ships, and actually costs what the deal deck says. The 3PL underneath an Amazon brand is not a footnote to the acquisition. It is one of the few places where the gap between represented and real shows up in hard numbers before a buyer has to find out the hard way.

None of the eight items in this piece require specialized access. A physical count, a written balance, twelve months of invoices, and a case export are things a target's 3PL will produce for a serious buyer inside a week. The only real obstacle is that almost nobody asks, because the checklist built for an Amazon acquisition was never built with the warehouse in mind.

Add it. A contract that renews itself, an inventory gap nobody counted, an invoice that turns into a lien, and a cost per unit that does not match the deck are the four ways a clean-looking deal turns expensive in the first quarter of ownership, and all four are visible before closing to anyone who asks the right party the right questions.