Understanding 3PL Logistics: A Complete Guide

If you're in ecommerce or retail, you might have heard of third-party logistics (3PL) but may not fully understand what it means or how it works. In this guide, we'll break down 3PL logistics, how it helps businesses, and what to look for in a 3PL provider.

3PL Meaning

A 3PL (third-party logistics provider) is a company that manages inventory storage, order fulfillment, and shipping for businesses. Instead of handling these logistics yourself, you outsource them to a 3PL, which can save time, cut costs, and improve efficiency.

What Are 3PL Services?

3PL services handle various aspects of logistics, including:

Warehousing – Storing your inventory in fulfillment centers.
Order Processing – Picking, packing, and shipping orders to customers.
Inventory Management – Keeping track of stock levels.
Freight Shipping – Managing large shipments and optimizing routes.
Returns Management – Handling customer returns and restocking.

What Are 3PL Providers?

A 3PL provider is a business that offers logistics services to ecommerce brands, retailers, and wholesalers. They help businesses manage their supply chain efficiently by offering end-to-end fulfillment solutions.

What Does a 3PL Do?

Storing inventory in strategically located warehouses.
Processing and fulfilling customer orders.
Managing transportation and shipping logistics.
Handling returns and restocking items.

Why Do You Need a 3PL?

Save money – Reduce storage, shipping, and labor costs.
Scale operations – Easily handle increased order volumes.
Improve delivery speed – Strategically placed warehouses ensure faster shipping.
Focus on growth – Free up time to focus on sales and marketing.

What is 3PL Logistics?

3PL logistics refers to outsourced logistics services that help businesses store, manage, and ship inventory efficiently.

What is 3PL Terminology?

Freight Forwarding – Managing shipments across carriers.
WMS (Warehouse Management System) – Software used to track and manage inventory.
Reverse Logistics – Handling customer returns and restocking.

3PL Services

Warehousing & Storage
Order Fulfillment (picking, packing, and shipping)
Inventory & Supply Chain Management
Freight & Transportation Solutions
Returns Processing & Reverse Logistics

Specialized 3PL Services

Cold Chain Logistics – For temperature-sensitive goods like food or medicine.
Hazmat Handling – For products like batteries or chemicals.
Kitting & Bundling – Custom packaging for subscription boxes or product sets.

How Do 3PL Warehouses Work?

3PL warehouses store your products and process orders. When a customer places an order, the 3PL picks, packs, and ships it directly to them. Many warehouses use automation and AI-driven software to optimize fulfillment efficiency.

3PL Services vs. Drop Shipping

What is Drop Shipping?

Drop shipping is a business model where sellers don’t hold inventory but instead send orders directly to manufacturers or suppliers for fulfillment.

Drop Ship Order Fulfillment

With drop shipping, the manufacturer or supplier picks, packs, and ships orders directly to customers.

Pros and Cons of Drop Shipping

✅ Low upfront costs
✅ No inventory management
❌ Lower profit margins
❌ Longer shipping times

3PL Order Fulfillment

3PLs store your inventory and ship orders quickly, offering better control over shipping speed and costs.

Drop Shipping and 3PL Ecommerce Differences

Drop shipping is ideal for startups with low budgets, while 3PL fulfillment is better for scaling brands.

FAQs About 3PL Logistics Services

What is a 3PL warehouse?

A 3PL warehouse stores, picks, packs, and ships products for businesses.

How does 3PL help ecommerce businesses?

By outsourcing fulfillment, ecommerce businesses can focus on sales, marketing, and growth.

FAQs About FulfillYN

What is FulfillYN?

FulfillYN is a 3PL matchmaking service that connects brands with the right third-party logistics providers based on their unique fulfillment needs. Unlike traditional 3PLs, FulfillYN does not operate warehouses but instead leverages a network of vetted logistics partners to provide tailored solutions.

How does FulfillYN help businesses find the right 3PL?

FulfillYN pre-screens 500+ global 3PL providers to match businesses with the best logistics partner based on criteria like warehouse locations, shipping requirements, order volume, and budget. This saves businesses time and reduces risk when choosing a fulfillment provider.

Does FulfillYN charge brands for its services?

No, FulfillYN does not charge brands for its matchmaking service. Instead, it operates on a revenue-share model with its network of 3PL providers, meaning brands get free expert guidance and recommendations without added costs.

Can FulfillYN help with international fulfillment?

Yes! FulfillYN works with 3PLs that offer international warehousing and cross-border shipping, making it easier for businesses to expand globally without logistical headaches.

What industries does FulfillYN serve?

FulfillYN helps ecommerce brands, wholesalers, and retailers across industries, including apparel, health & wellness, food & beverage, beauty, and electronics.

What makes FulfillYN different from other 3PL solutions?

Personalized matchmaking – Instead of offering a one-size-fits-all solution, FulfillYN matches businesses with the best-fit 3PL provider.
Pre-vetted network – Only reliable and experienced 3PLs are part of FulfillYN’s network.
End-to-end support – FulfillYN helps businesses through the entire selection and onboarding process.

Summary of 3PL Services

3PL providers help businesses streamline logistics, scale operations, and improve efficiency. With FulfillYN, businesses can easily find the right 3PL partner without the hassle of trial and error.

What is a 3PL?