Everything You Need to Know About 3PL Logistics (+ What to Expect From the Right Partner)

March 31, 2022

62447c18461a882b076d0c75 3PL Suppliers 3PL logistics

As a scaling ecommerce brand, problems will be coming at you thick and fast.

Besides increasing the capacity of your site and expanding your marketing initiatives, you’ll also need to increase fulfillment capacity.

But doing this can be incredibly expensive and energy-sapping.

Many rapidly growing online brands look to specialist companies to provide their warehousing and shipping needs, so they can focus on the core of their business.

Below we’ll share an overview of everything to know as you begin to scale via third-party-logistics providers, plus some info on how to find the right 3PL partner for your needs.

Feel free to skip ahead:

What is 3PL logistics?

3PL, or third-party logistics, refers to getting outside or outsourced help with your order fulfillment, inventory management, and other warehousing needs.

Rather than getting goods delivered to your own warehouses, your inventory is delivered directly to your 3PL partner, who handles the storage, picking and packing, and shipping process for you.

This can be great for fast-scaling ecommerce brands as they can ramp up sales quickly and get a 3PL company to handle the extra workload or overhead.

There are many options when picking a 3PL partner—some offer complete fulfillment services, while others may only cover part of what you need—so it’s important to find the right 3PL company for your business (we’ll get into that a little later).

What are the different types of 3PL companies?

3PL companies or service providers come in different shapes and sizes, so before you can decide which is the best fit for your business, you’ll need to understand what your options are.

This breaks down into three types:

6245b292f94a96674d346a58 Distribution 3PL logistics

Distribution: as the most common type of 3PL service, these partners provide warehousing and distribution for your goods. If you’re a small to medium-sized business who wants to expand into more channels while maintaining 1-2 day shipping, this could be a good option for you.

6245b2b6987c5a620fb13750 Financial20and20information 3PL logistics

Financial and information: If you’re a bigger brand handling a large volume of orders, you should partner with a 3PL that has specialist knowledge of international supply chains. They can provide information and advice on how to optimize fulfillment processes and help you quickly adapt to changing global operating conditions.

6245b2cd174d9f4f5ec23079 Transportation 3PL logistics

Transportation: These 3PL companies provide transportation of goods, often in addition to warehousing services. Companies like FedEx can be a great solution if you only want to deal with a single 3PL provider, rather than having to manage multiple organizations for different parts of the fulfillment process.

Who should use 3PL?

So is your brand ready to take on a third-party logistics provider? If you recognize the following as part of your current growth stage, you might be needing to consider more formal 3PL services:

  • You’re shipping large volumes of orders: If you find that you can’t keep up with the number of orders you’re receiving, getting outside help will be more efficient than fulfilling everything yourself. As a good rule of thumb: if you’re getting more than 100 orders a month, it may be time to start looking for a fulfillment partner.
  • You need to reduce your delivery times:Customers expect free 1-2 day shipping (that’s the Amazon/Prime effect). If you’ve recently increased sales and are struggling to meet this delivery timeline, a 3PL logistics partner with infrastructure already in place can help you meet customer expectations.
  • You’re running out of your own warehouse space: Capacity can be another issue if you’ve recently increased sales. It may be wiser to bring in a 3PL partner to provide the extra capacity rather than taking on this responsibility yourself. This also goes for if your warehouse is simply getting unruly in terms of organization too.
  • You want to scale: Scaling your brand brings with it a whole host of challenges. Letting a specialist 3PL provider handle your extra fulfillment requirements takes some of the risk and overhead out of scaling.

#cta-visual-pb#<cta-title>Scale content creation across multiple storefronts<cta-title>Designed for larger brands, Shogun Page Builder Advanced enables your team to copy and clone content across your sub-brands and various storefronts with ease.Learn more

The 3PL process and considerations

If you’re used to handling every aspect of your ecommerce business yourself, letting another company look after your goods and ship them to your customers might feel like giving up control, so let’s demystify the process.

This is how shipping goods from a 3PL partner typically works:


Your goods arrive directly at the 3PL warehouse. You should pick a 3PL with an inventory management system that integrates with your own and provides a simple way to log stock as being received by the partner.


Each of your SKUs will be assigned its own dedicated space within the 3PL partners’ space.


When an order comes into one of your sales channels, it’s re-routed to the 3PL-provider’s warehouse, where it’s picked by warehouse staff. Particularly worthwhile 3PL providers for ecommerce should have the capability to automate the entire customer-order-to-warehouse-picking process.


When selecting a 3PL partner, make sure you find out what’s included in the deal. Some 3PLs roll packaging costs into the overall price, while others charge for this separately. As you’re outsourcing this part of your operation, you’ll need to make agreements ahead of time on the size, weight, and cost of packaging materials. If you are a specialist retailer with custom packaging needs, make sure your 3PL partner can cater to these.


As far as your customers are concerned, this is the most important part of the process as it determines the first real-world interaction with your brand. Depending on your needs, you may want to choose a 3PL company that offers expedited shipping so you can, in turn, offer this to your customers. 


3PLs don’t just ship orders on your behalf, they also handle returned orders.

How 3PL can benefit scaling brands

Done right, there are several benefits to 3PL logistics that can help you scale. Namely:

Partnering with a third-party provider can save you money

If you want increased capacity to level up your business, finding a dedicated company that has already made investments in warehousing, inventory management, and shipping can reduce your overall costs. It means you don’t have to make a huge up-front and ongoing investment in an area you may be unfamiliar with.

3PL logistics can also help you launch in new markets with less risk

If you’re based in the US but are exploring overseas markets, working with a company that’s already operating in the geography you want to go into can be a lot simpler than researching laws and regulations, scouting locations, and working out where you need to base your warehouses.

#cta-paragraph-pb#With the right 3PL partner, a lot of the risk associated with launching in new, global locations is taken out of the equation. This is especially true if you’re not sure if the target market will be a guaranteed success. If you go it alone, you could end up spending a huge amount of time, effort, and money on a venture that doesn’t pan out as expected.

Third-party logistics offer a buffer against supply chain shocks

The disruption caused by Covid and geopolitical volatility has seen pressure on inventory at its highest levels in 40 years. Trying to navigate this increasingly unpredictable terrain by yourself is full of pitfalls.

If you can find the right partner who has the insight and experience to guide you through resilient fulfillment, it doesn’t eliminate supply chain risks entirely but it does reduce them significantly, minimizing the potential for you to run out of goods in your warehouses and have to mark large parts of your inventory as out of stock.

You’ll maintain an outstanding customer experience while scaling

Ultimately, the biggest benefit of using a 3PL logistics company is that you don’t have to immerse yourself in the intricate details of fulfillment.

If you’re scaling, this is huge. Going from tens of orders a day to hundreds is a big undertaking. It’s an exciting time for your business, but also one that’ll present you with real challenges every day of the week.

Your day-to-day as an ecommerce manager or director is full of hurdles, all the while you’re ensuring continuity of customer experience while you ramp up operations.

Partnering with a great 3PL company gives you access to industry expertise. If you’ve built a successful omnichannel brand, with outstanding customer experience across touchpoints, you probably have excellent marketing and technical knowledge, but your logistics skills and knowledge of international shipping timetables might not be your strongest point.

Finding someone with years, or even decades, of logistics and supply chain experience, frees you up to focus on the areas of your business where you can add the most value, while they get on with ensuring your goods get shipped in the quickest, most efficient way possible.

Services you can expect from a 3PL partner

All 3PLs should offer warehouse and inventory management: not just picking, packing, and shipping services directly from their warehouses, but also tracking of stock levels and advice on when to re-order goods.

But beyond this minimum, what should you expect when you sign up with a 3PL provider? Here are a few of the big ones:

Integration with your ecommerce platform

If you’re selling on multiple channels, you need to choose a 3PL partner with a sophisticated warehouse management system (WMS) or order management system (OMS) that can connect seamlessly to your own network. You need to be able to automate the process of orders being received and logged at the 3PL warehouse. Manual data entry can lead to mistakes and miscalculations of stock levels, which could cost you sales and damage your brand’s reputation.

Same-day or 2-day shipping

Customers are generally unwilling to wait longer than two to three days for their online orders to arrive, and in many sectors, this expectation reduces to two days or fewer. Making the investment in your own warehouses that would allow you to meet this demand is probably not going to be profitable, so make sure your 3PL partner has the resources to meet this requirement.

Reverse logistics/Returns management

Not only do customers want to receive their orders quickly, they also expect to be able to return them easily. Aftersales care is a crucial part of the customer experience, with one survey finding customers value a good returns policy as highly as payment and delivery. Make sure you’ll be able to provide this when exploring 3PL options.

Customer tracking capability

Another part of the customer experience that has come to be seen as standard in ecommerce is the ability for customers to track their orders. Visibility into the delivery process increases buyer confidence and makes online purchases more convenient. Even though you’re outsourcing your logistics, you don’t want customers to feel their order has disappeared into the abyss until it arrives.

A good 3PL partner will have the technology to keep your customers updated from the point they order on your site to the minute their product arrives.

Distributed inventory

Larger 3PL companies will have many fulfillment centers and be set up with software that can track inventory across them, meaning orders can be shipped intelligently from the warehouse that’s closest to the customer. Not only does this mean that orders arrive faster, it also brings down shipping costs as you don’t have so many miles to cover.

International fulfillment

If you sell internationally, or are planning to, make sure you pick a company that has good knowledge of international fulfillment and will be able to provide timely international shipping. Larger companies like FedEx and UPS have these capabilities while also providing great integrations for ecommerce businesses (see below for more.)

Flexible shipping options

Full truckload (FTL) shipping can provide economies if you often ship large orders, while less-than-truckload (LTL), when your shipments are consolidated with other goods and you only pay for the space you take up, might be a better option for smaller ecommerce brands who don’t need to ship huge volumes.

The Best 3PL companies for scaling omnichannel brands

Making sure the ecommerce platform or platforms that you use integrate with your 3PL provider is a key part of the process. Most of the major companies provide extensive integrations:


ShipBob orders and inventory

Known as an all-in-one 3PL solution, ShipBob is popular with DTC ecommerce retailers for its comprehensive integrations as well as its wide range of 3PL services and extensive network of warehouses.

They provide out-of-the-box integration with several ecommerce services, including WooCommerce, Shopify and Shopify Plus, BigCommerce, Squarespace, eBay, Amazon, and Walmart, allowing you to automatically send omnichannel orders direct to the warehouse. You can also build a custom integration via their API.


FedEx fulfillment services

FedEx’s fulfillment platform gives online retailers a simple way to manage their inventory. Their ecommerce integrations include eBay, Etsy, Walmart, Shopify, and Magento. They also offer data analytics and order tracking through their platform.


UPS ecommerce fulfillment

The warehousing and transportation giant offers distributed order management through its huge network of fulfillment centers. It also offers flexible ecommerce integration through its real-time inventory management platform and API functionality.

There are a host of third parties who specialize in providing bespoke UPS ecommerce integration, so this could be a good option if you don’t have a large team of developers.

Shopify Fulfillment

Shopify fulfillment

This is a great option for online stores built on Shopify. They offer flexible shipping within the United States, two-day delivery, a comprehensive returns service, and a scaled pricing structure. If you’re not a Shopify store, however, their fulfillment service isn’t available to you.

C.H. Robinson

C.H.Robinson warehousing and logistics

The global shipping and logistics company’s answer to ecommerce integration is Navisphere, a platform that provides visibility into inventory levels, tracks shipping, and allows freight payment facilities.

While C.H. Robinson caters to businesses that need to ship large volumes of goods internationally, they also offer flexible shipping options for online businesses looking to consolidate and economize smaller shipments.

Kuehne + Nagel

Kuehne and Nagel shipping and logistics

Another huge logistics company, but one that stresses their flexible approach to retailers large and small. They provide a range of integrations via API or EDI, allowing you to choose the solution that best suits your needs.

Red Stag Fulfillment

Red Stag Fulfillment

A good option for brands just starting out on their scaling journey as they cater to smaller-scale shipments and have a great reputation for providing support.

Ensure your ecommerce site matches your scaling ambitions

If you’re planning to integrate your omnichannel operations with 3PL partners, as well as increase the number of channels you sell on, you’re going to need an ecommerce storefront that can work with a wide variety of software and applications.

If you’re at the stage where you’re integrating your tech stack with 3PL companies and other third parties essential to your business, having a merchant-friendly way to experiment and make updates to your online storefront is a fantastic way to remove at least one of the headaches from your scaling process.

#cta-visual-pb#<cta-title>Scale content creation across multiple storefronts<cta-title>Designed for larger brands, Shogun Page Builder Advanced enables your team to copy and clone content across your sub-brands and various storefronts with ease.Learn more

Rhys Williams

Rhys is a writer specializing in enterprise software, ecommerce, and SaaS. He describes himself as a geek and a wordsmith and relishes making complex, technical topics come to life in easy-to-understand web copy.

The latest ecomm tips sent to your inbox

share this post

You might also like