William K. Turner
William K. Turner

Your Complete Guide to Third-Party Logistics (3PL)

13 min read

Published on: Jan 17, 2023

Last updated on: Jan 23, 2023


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If you are an eCommerce business owner, you know the importance of order fulfillment.

But focusing too much on the logistics could hurt your ability to meet your clients' actual needs. Moreover, handling the logistics all by yourself can also increase your costs.

That's where 3PL services come in to help!

As eCommerce businesses become increasingly competitive, more companies are turning to 3PL providers to ensure their success in the global marketplace.

Third-party logistics (3PL) is a simple solution for businesses looking to outsource their supply chain management needs. 

This blog will provide a complete guide to understanding what 3PL is and what it can do for you.

You'll also learn about the benefits of using a 3PL provider. Finally, we'll provide some tips on finding the right 3PL according to your needs.

So let’s take a closer look at 3PLs. 

What is a Third-Party Logistics (3PL) Provider?

At its core, 3PLs are logistics companies that provide an outsourced solution for managing the transportation and storage of goods. 

A 3PL provider’s main goal is to provide efficient and cost-effective solutions for businesses that need assistance managing their supply chain operations.

This includes everything from packaging materials and handling orders to final delivery.

Simply put, a 3PL is a business:

  • That provides transportation and warehousing services for businesses looking to outsource their supply chain operations.
  • That is responsible for the pickup, storage, and delivery of products to customers.
  • That helps businesses manage their inventory and provide order fulfillment services.

You can check out this short video explaining what 3PLs are:

Let's have a detailed look at the various services offered by 3PLs.

Which Services Does a 3PL Provider Offer?

There are many different types of services offered by 3PL companies.

Here are some services you can get from a 3PL company depending on your business needs:

Warehousing and Storage

3PL providers offer warehousing and storage services to help businesses store their products. They can provide short-term or long-term storage, depending on your needs.

A 3PL provider will provide a secure facility and a climate-controlled environment for your inventory. They also have the necessary staff and equipment to manage your product inventory and keep it safe from damage or theft.

This helps you save time and resources, as you don’t have to do it yourself.

Some 3PLs also provide distributed inventory. This involves the storage and management of your products across multiple warehouses or distribution centers. This makes the delivery process faster and more efficient.

Inventory Management

Managing inventory is an important part of any eCommerce business, and a 3PL can help with that.

Inventory management involves tracking and managing your product inventory. This includes keeping an accurate record of available products, how much is in stock, and when items need to be reordered.

3PLs use advanced software to keep track of inventory and ensure orders are fulfilled quickly and accurately. They also sync your online store with the stored inventory to ensure accurate product data and transparent tracking.

This way, a 3PL provider can help you manage your inventory more efficiently and keep track of stock levels to prevent stockouts.

Order Fulfillment

Fulfilling orders can be time-consuming and complex. A 3PL provider can take care of this for you to make sure your customers get their orders quickly and accurately.

3PLs use automated order fulfillment systems that help you process, package, and ship orders faster. They also track the progress of each order from start to finish and provide order tracking information to customers.

This ensures that all your customers get their orders on time and in perfect condition, which can help increase customer satisfaction and loyalty.

Expert Tip

Learn more about the 3PL fulfillment process here!

Shipping & Transportation

A 3PL can provide you with efficient shipping and transportation services to ensure your products are delivered on time.

They provide you with a range of shipping solutions. This includes selecting the best carriers for your shipments, finding cost-effective routes, and managing freight forwarding services.

Additionally, 3PL providers will handle all packing and labeling for you, as well as arrange pickup and delivery of your orders. They ensure that all your products are delivered safely and securely.

This allows businesses to focus on running their operations without worrying about logistics, shipping, and transportation.

Returns Processing

In addition to storage and order fulfillment, 3PLs also help process returns and reverse logistics.

Processing returns can be a costly task for small businesses. A 3PL provider will manage this process for you and handle all the paperwork, shipping labels, and reverse logistics involved in this process.

This helps ensure that your customers have a smooth and hassle-free experience when returning products.

Value-Added Services

3PLs don't stop at merely storing and transporting your goods. Some of them also provide value-added services such as customization and kitting.

Here are the most important value-added services your business requires from a 3PL:

  • Custom Packaging

Custom packaging involves customizing your product packaging to meet your customers' needs. In addition, it helps reinforce your brand identity and create a memorable unboxing experience.

This includes adding special features and branding elements that make it stand out from the competition.

  • Custom Sender Notes

Custom sender notes are personalized messages sent with each order. 3PLs can include custom notes with a package according to your client's wish.

These help create a personal connection with the customer, which can increase customer loyalty and satisfaction.

  • Kitting

Kitting is the process of combining multiple items into a single customized package. This can be used to create unique and attractive packages that attract customers and increase sales.

These value-added services provided by 3PLs can help your business stand out from the competition, boost customer satisfaction, and increase sales.

Data Analytics To Help Grow Your Business

A 3PL can also provide valuable data analytics to help you understand your customers better, optimize operations, and grow your business.

They provide insights into customer behavior, sales trends, and order fulfillment performance. This helps you make more informed decisions about what products to stock up on or discontinue.

It also helps you optimize inventory levels and shipping costs, so you can increase profits.

In short, all of these services can help streamline your operations and make your business more efficient. By outsourcing these services, companies can save on costs, reduce storage and transportation times, and improve customer service.

Now that you know all the services you can get, you must be wondering about how it all actually works.

Read on to learn how a 3PL works to provide you with these advantages.

How does a 3PL work?

The work process of a 3PL is not as complicated as it may seem.

These are the steps involved in the work of 3PL:

Receiving Your Products

First of all, a 3PL requires inventory on hand. So you send your products to your 3PL partner, who receives and stores those products in their warehouses.

This can be done either through direct shipments from your business or using a third-party logistics provider (3PL) for transportation.

You need to tell them in advance about which products you will send and how many, so the 3PL would make appropriate arrangements.

Once the products arrive, they are counted and inspected for any damages or defects before being placed into inventory.

Storing The Products in Warehouses

The next step is warehousing. The 3PL stores your products in its warehouse space and keeps track of inventory levels to ensure that you have enough stock on hand when it’s needed.

They also ensure that your inventory has sufficient space and is secure from any threats.

Picking and Packing

When you receive an order from a customer, it's time for a 3PL to pick up and pack your product. This is the first stage of the order fulfillment process.

The 3PL would pick up the items from their warehouse and pack them into the required packaging. 3PLs use a variety of packaging methods depending on your product and its requirements.


“Pick, pack, and ship” forms the core of order fulfillment.

Once the order has been picked and packed, it's time for the 3PL to ship your product. 3PLs often partner with multiple shipping carriers who can deliver the goods quickly and cost-effectively.

The 3PL tracks the shipment, ensuring that it reaches its destination on time and without any problems. They also provide detailed tracking information for customers to track the progress of their orders.

Returns Processing

Finally, 3PLs also handle any returns as well. They will process the return and refund the customer according to your policy.

The 3PL will also inspect the product, figure out what went wrong, and take steps to ensure that it doesn’t happen again. This helps improve customer satisfaction and retention in the long run.

By doing this, they can help you minimize your losses and protect your profits.

These are the basic steps involved in a 3PL’s process. By leveraging this expertise, an eCommerce business can significantly improve its operations and ensure efficient order fulfillment.

Expert Tip

Remember, a 3PL service differs in some aspects from a 4PL service. Read this blog on 3PL vs 4PL to know more!

Let's take a closer look at the benefits you can get from a 3PL.

Why Do You Need a 3PL?

You now know that a 3PL can help your business reduce costs, increase efficiency, and build capacity. Every eCommerce store out there can receive these benefits from a 3PL provider.

But the question remains: Do you even need to 3PL service for your business?

Let's dive deep into the reasons you may need 3PL services.

You Don't Have Enough Space for Your Inventory

When you run a retail business, one of the biggest challenges is finding enough space to store your inventory. Not having adequate storage facilities can lead to product losses due to overcrowding or even damage from improper handling and storage conditions.

By partnering with a 3PL provider, you can reduce the need for physical space as they have warehouses that can store and manage your inventory.

You Don't Have Sufficient Staffing Resources

It can be challenging for any business to have sufficient staff to handle the orders, pack them, and ship them. This is especially true for small eCommerce businesses that don't have enough resources to hire and train personnel for this purpose.

A 3PL can provide you with enough resources to process and send out the orders. This can help you save time and money by reducing the need to hire additional staff.

You Need to Increase Your Delivery Speed

Slow delivery can really harm your business. Partnering with a 3PL is a great way to ensure a consistent delivery speed for your customers.

3PLs have access to multiple shipping carriers and can ensure that your products are shipped quickly and cost-effectively. This will help improve customer satisfaction, leading to more sales in the long run.

Your Shipping Volume is Increasing

As your business grows, your shipping volume will also increase. This can be a challenge to handle if you don't have the right resources or infrastructure in place.

A 3PL can help you manage this increase in shipping volume by providing the required manpower and resources for efficient fulfillment. They'll ensure that all orders are processed quickly and shipped accurately.

So, you will ultimately need services from a 3PL provider if your business is growing and you want it to grow even more!

Expert Tip

To know more about what international 3PLs have to offer, check out this blog!

What are the Benefits of Working with a 3PL?

There are many advantages to working with a 3PL.

Here are some of the most significant benefits you will get:

Saving Your Time and Costs

By outsourcing the logistics operations and associated services to a 3PL, you can free up time and resources for other areas of your business. 

This results in cost savings that have a direct impact on your bottom line.

For small businesses, outsourcing to a 3PL can be especially beneficial. By doing so, they can access resources that would otherwise be unavailable or cost prohibitive.

This includes access to advanced technology and expertise in order fulfillment, returns management, and other areas of logistics.

Improved Efficiency

By partnering with a 3PL provider, companies can reduce operational costs while building capacity to meet customer demands more efficiently.

A 3PL provider can also help you optimize your supply chain operations, identify areas of improvement, and integrate cutting-edge technologies.

These efforts lead to faster order fulfillment times and improved inventory management. All of this leads to better customer service and increased profitability for your business. 

Flexibility and Scalability 

One major advantage of working with a 3PL provider is that they can provide flexibility and scalability when meeting your shipping needs.

A 3PL provider will be able to quickly adjust their operations to meet the changing demands of your business. This means that you can focus on other aspects of your business without worrying about whether or not you have enough inventory or staff to handle an unexpected surge in orders. 

Access to Industry Expertise

E-commerce logistics can be a complicated business. By outsourcing to a 3PL, you can access the knowledge and expertise of an experienced partner.

They are up-to-date on changes in regulations, as well as new technologies and services that can help improve your operations. In addition, they have the resources to handle any problems that may arise during order fulfillment or returns processing quickly and effectively.

This helps ensure that your products reach their destination on time and without complications. This is especially important for businesses looking to expand their operations into new markets.

Ultimately, a 3PL provider is a valuable asset for any eCommerce business looking to maximize efficiency and productivity while minimizing costs.

However, there are many 3PL services, so how do you choose the right one for your needs?

Continue reading to find out.

How to Choose the Right 3PL for your Business?

Choosing a 3PL provider for your business needs may be challenging. The biggest challenge is finding one that meets all your needs without breaking the bank.

It can be difficult to find one that suits both your budget and operational requirements. 

But don't worry anymore,

Here are a few things to consider while selecting a 3PL partner.

Will the 3PL be able to ensure fast delivery?

You will need to find out the locations of a 3PL's order fulfillment centers to find out whether they will be able to ensure fast delivery.

As a business, you know your customers more than anyone. So make sure the 3PLs fulfillment centers are closer to your customer base.

Does the 3PL provider have the right technology?

The right technology is essential for efficient order fulfillment. Make sure that the 3PL provider has advanced management software and systems to help you track orders in real-time and automate processes.

Also, make sure they are up-to-date with the latest shipping technologies and standards.

What kind of customer service does the 3PL provider offer?

Customer service is an important factor when selecting a 3PL partner. Ensure that the 3PL provider has a team of experienced professionals willing to help with any issues or inquiries you may have about their services.

It is also a good idea to check reviews online to see what other customers have to say about the 3PL provider.

Is the 3PL Partner Cost Effective?

Find out how much the 3PL charges for their services and compare it with your budget. It’s best to choose one that offers competitive pricing and is within your budget.

Also, some 3PLs offer additional services, such as kitting and bundling, that can help reduce costs in the long run.

By considering all of these factors, you’ll be able to choose the right 3PL partner for your business!

To summarize it for you,

3PLs offer their clients the ability to simplify their supply chain operations and reduce costs associated with warehousing, shipping, and order fulfillment. If you need a 3PL provider for your business, you must judge a 3PL's capabilities to deliver what they promise in a cost-effective way.

Still, let us make choosing a 3PL partner even simpler for you!

3PL Fulfillment Prep is a leading 3PL provider specializing in warehousing, order fulfillment, and shipping solutions. We offer comprehensive, cost-effective services tailored to meet your business needs.

Our experienced team of professionals provides quality customer service and ensures the safety of your products throughout the entire shipping process.

Moreover, our advanced technology allows you to track orders in real time, simplifying your operations and improving overall efficiency.

Our highly competitive pricing and commitment to customer satisfaction make us a great choice for businesses looking for reliable 3PL services.

With 3PL Fulfillment Prep, you can rest assured that you are making the right decision to meet your operational needs. Whether you are looking for warehousing services or need a partner to handle order fulfillment and shipping, we've got it all for you.

So why not take advantage of 3PL Fulfillment Prep and make the most of your business?

Contact us today!

Frequently Asked Questions

What is 3PL vs 4PL?

3PL is different from 4PL.

3PL providers offer services such as warehousing and inventory management. Whereas 4PL providers are more focused on managing supply chains, integrating different process components, and acting as a single point of contact between stakeholders.

Moreover, 3PL providers typically provide individual services such as warehousing and shipping on their own or through partnerships with other companies, while 4PLs are integrated systems that provide end-to-end supply chain solutions.


What are the four types of 3PL?

The four types of 3PL providers include:

  • Standard 3PL Provider: They provide basic services such as pick and pack, warehousing, and distribution.
  • Service Developer: They offer advanced value-added services such as tracking and tracing, cross-docking, specific packaging, or providing a unique security system.
  • Customer Adapter: They are focused on providing services that adapt to the specific needs of their customers.
  • Customer Developer: Th
William K. Turner


William K. Turner (Supply Chain Management)

Willian K. Turner, our esteemed author with expertise in International Trade, Global Logistics, and Supply Chain Management, has a lot to offer when it comes to writing about these topics. He has a wealth of experience and knowledge to share with readers. Whether he's writing blog posts or articles his insights will be surely valuable to anyone interested in these industries.

Willian K. Turner, our esteemed author with expertise in International Trade, Global Logistics, and Supply Chain Management, has a lot to offer when it comes to writing about these topics. He has a wealth of experience and knowledge to share with readers. Whether he's writing blog posts or articles his insights will be surely valuable to anyone interested in these industries.

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