Third-party logistics (3PL)

ecommerce logisitics glossary from fulfill


Navigating through the intricate world of ecommerce, Third-Party Logistics, or 3PL, emerges as a pivotal element, facilitating the smooth transition of goods from manufacturers to consumers. Particularly crucial for ecommerce businesses, 3PL involves outsourcing operational tasks related to the transportation of products. Let's delve deeper into understanding 3PL services, their benefits, and how to select the ideal fulfillment partner.

Defining 3PL

3PL companies, often referred to simply as 3PLs, assist direct-to-consumer brands in managing one of their most vital operational tasks: order fulfillment. These entities take charge of various tasks, such as warehousing, inventory management, order preparation, and shipping, ensuring that products reach consumers efficiently and effectively.

3PL companies might offer a spectrum of services beyond mere warehousing and shipping, such as:

  • Freight coordination
  • Customs brokerage
  • Value-added services like kitting and barcoding
  • Returns management (reverse logistics)

Certain 3PLs might also specialize in specific areas, such as cold fulfillment for the food industry or handling hazardous materials or bulky items like furniture. Regardless, their warehouses, transportation methods, and partner vendors should be adept at managing the specific challenges posed by different types of goods.

The Mechanics of 3PL Order Fulfillment

While the standard operating procedures might differ among companies, every 3PL adheres to the same general steps for order fulfillment:

  1. Inventory Receiving: The ecommerce company sends its inventory to the 3PL warehouse, where it is unloaded, verified, and stored appropriately.
  2. 3PL Warehousing: The inventory is organized and stored in the warehouse, often using a SKU management system to ensure items are easily locatable when ordered.
  3. Order Picking: Upon receiving an order from the ecommerce store, an employee locates and gathers the SKUs for the order, bringing them to a packing station.
  4. Order Packing: The items are packed securely in appropriate packaging, and a shipping label is applied.
  5. Shipping: The packaged order is picked up by the shipping carrier and transported to the customer.
  6. Returns: The 3PL also manages returns, inspecting returned items and deciding whether they can be resold or need to be disposed of.

Advantages of Utilizing 3PL

Employing a 3PL provides several benefits, including:

  • Expertise Utilization: Leverage the 3PL’s knowledge of international and domestic trade regulations, shipping regulations, and economic compliance.
  • Focus on Core Business: Free up management to focus on core business activities like product development and marketing strategy.
  • Cost and Time Efficiency: Save on the overhead expenses of running a warehouse and benefit from the 3PL’s negotiated carrier rates.
  • Flexibility: Easily scale operations up or down based on market changes without the risk of building new fulfillment centers or hiring new employees.
  • Enhanced Customer Satisfaction: Ensure quick and efficient delivery of orders to customers, enhancing their overall experience and trust in your brand.

Choosing the Right 3PL

When considering a 3PL partner, it’s essential to evaluate various factors, such as:

  • DTC and B2B Order Fulfillment: Ensure the 3PL can handle both direct-to-consumer and business-to-business order fulfillment.
  • International Fulfillment: If you plan to expand internationally, choose a 3PL with international warehouses.
  • Value-Added Services: Ensure the 3PL can manage additional tasks like kitting, bundling, or barcoding.
  • Customer Service: Opt for a 3PL that offers excellent customer service and dedicated Account Managers.
  • Flexibility and Scalability: Choose a 3PL that can customize packages to suit your evolving needs.
  • Branding Support: Ensure the 3PL can support custom packaging and branding.
  • Technology: Ensure the 3PL integrates with your ecommerce platform and provides real-time insights into warehouse operations.
  • Precision: Ensure the 3PL can accurately manage inventory, shipping, and order processing.
  • Positive Reputation: Opt for a 3PL with a good reputation among clients and vendors.
  • Data Security: Ensure the 3PL adheres to stringent data security policies.


3PL plays a crucial role in ensuring the seamless operation of ecommerce businesses, managing the intricate logistics of order fulfillment and shipping. By partnering with a proficient 3PL provider like Airhouse, ecommerce brands can ensure smooth supply chain operations, enhance customer satisfaction, and bolster their bottom line.

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