What Is a 3PL?
Quick answer
A 3PL (third-party logistics provider) is a company you pay to store your inventory in its warehouse, pick and pack each order, and hand it to a carrier. For an ecommerce brand, the 3PL connects to your store (Shopify, Amazon, TikTok Shop), pulls orders automatically, ships them, and sends tracking back. You pay per order, per item, for storage and for receiving, plus postage. You keep ownership of the inventory and the customer; the 3PL runs the warehouse work.
Key takeaways
- 3PL stands for third-party logistics: an outside company that runs warehousing, fulfillment and shipping for you.
- Your store sends orders to the 3PL through an integration; the 3PL ships them and returns tracking numbers.
- Billing is usually receiving + storage + pick/pack + postage, and some 3PLs bundle these into an all-in per-order price.
- A 2PL only moves freight; a 4PL manages other logistics providers for you and typically owns no warehouses.
- You still own the inventory, the product data and the customer relationship.
What does 3PL stand for, and what does a 3PL actually do?
3PL stands for third-party logistics. Wikipedia defines it as an organization's long-term commitment to outsourcing its distribution services to a third-party logistics business. In ecommerce, that means a fulfillment company runs the physical side of your business while you run the brand.
A typical DTC 3PL does six jobs for you:
- Receives your inbound stock (parcels, pallets or containers) and counts it into its warehouse management system (WMS).
- Stores it in bins, shelves or pallet locations.
- Pulls orders from your store through an integration.
- Picks and packs each order, including inserts, gift notes or kits you've specified.
- Ships it with a carrier label and pushes tracking back to your store.
- Processes returns: inspects, restocks or disposes, and reports back.
Many also do value-added work: kitting and bundling, Amazon FBA prep, retail and wholesale (B2B) orders with EDI, and lot or expiration-date control.
What is a 3PL warehouse, and how is it different from a fulfillment center?
A 3PL warehouse is simply a warehouse run by a 3PL for multiple client brands. The terms overlap in practice:
| Term | What it usually means |
|---|---|
| Warehouse | A building that stores goods, often in pallet quantities, for long periods |
| Fulfillment center | A warehouse set up for fast, small-parcel order picking to consumers |
| 3PL | The company. It may run one fulfillment center or dozens |
| Prep center | A facility that labels and packs inventory to Amazon FBA's requirements before sending it to Amazon |
When you hire a 3PL for a DTC brand, you're almost always buying fulfillment-center work: many small orders a day, shipped within a set cutoff.
How does a 3PL work with your ecommerce store?
The day-to-day flow looks like this once you're live:
- A customer buys on your Shopify store, Amazon, TikTok Shop or a wholesale portal.
- The order syncs to the 3PL's system, usually within minutes.
- Orders received before the 3PL's same-day cutoff ship that day. Published cutoffs vary: for example, Fulfillrite lists 2:00 PM local time, eFulfillment Service lists 1:00 PM ET and Simpl Fulfillment lists 12:00 PM CT.
- The 3PL buys postage (often at its negotiated carrier rates), ships, and writes tracking back to the order.
- You see inventory levels, order status and invoices in the 3PL's portal.
Your job shifts from packing boxes to forecasting, sending inbound shipments with advance shipping notices (ASNs), and auditing invoices. The step-by-step sequence is in the order fulfillment process.
How do 3PLs charge?
Most 3PLs bill five categories. Some publish rate cards; many are quote-only.
| Fee | What triggers it | Published examples |
|---|---|---|
| Receiving | Each inbound shipment, pallet, container or hour of labor | ShipCalm: $39.50 per shipment, $12.45 per pallet |
| Storage | Space your inventory occupies | ShipCalm: $0.19 per cubic foot per week |
| Pick and pack | Each order and each extra item | ShipCalm: $2.65 per order + $0.95 per item |
| Postage | Carrier label, often marked up or bundled | Passed through or bundled |
| Account / platform | Monthly minimums or software fees | Simpl: $750/month minimum; ShipCalm platform fee from $49/week |
Others bundle fees into an all-in per-order price: Simpl Fulfillment publishes from $7 per order including up to three picks, postage and packaging, and Fulfyld publishes an average all-in $7.74+ for a 4–12 oz order at its 501–1,000 orders/month tier. Compare quotes on the total cost of your real order profile, not the headline pick fee.
What's the difference between 1PL, 2PL, 3PL and 4PL?
| Model | Who does the work | Example |
|---|---|---|
| 1PL | You ship your own goods | Packing orders in your garage or your own warehouse |
| 2PL | A carrier moves your freight; you do everything else | UPS or a trucking company |
| 3PL | A provider stores, picks, packs and ships for you | A fulfillment company |
| 4PL | A provider designs and manages your supply chain, often coordinating several 3PLs, without owning warehouses | A logistics manager or control tower |
Is Amazon a 3PL or a 4PL? When Amazon stores your inventory and ships orders from its own fulfillment centers (FBA, or Multi-Channel Fulfillment for orders from other channels), it's acting as a 3PL: it owns and runs the warehouses. The full comparison is in 3PL vs 4PL.
Do you need a 3PL?
You're likely ready when two or more of these are true:
- Packing orders takes hours a day that should go to growth.
- You've run out of space, or you're paying for space you'd only need at peak.
- Your customers are far from you and ground shipping takes too long.
- You're adding a channel (Amazon, TikTok Shop, retail) with its own shipping rules.
- Mistakes and late shipments are costing you reviews.
You're probably not ready if you ship a handful of orders a week, your product changes constantly, or your margins can't absorb a per-order fee plus a monthly minimum. See when to switch to a 3PL for the thresholds and how to choose a 3PL for the questions to ask.
Frequently asked questions
What does 3PL mean?
3PL means third-party logistics: outsourcing warehousing, order fulfillment and shipping to a specialist company.
What is an example of a 3PL?
ShipBob, ShipMonk and Red Stag Fulfillment are ecommerce 3PLs: each stores brands' inventory in its own fulfillment centers and ships their orders. Amazon acts as a 3PL through FBA and Multi-Channel Fulfillment.
Is a 3PL the same as a fulfillment company?
For ecommerce, mostly yes. "Fulfillment company" describes the service (picking, packing and shipping orders); "3PL" is the broader industry term, which also covers freight and B2B distribution.
Is Amazon a 3PL or a 4PL?
Amazon works as a 3PL when it stores and ships your inventory through FBA or Multi-Channel Fulfillment, because it runs the warehouses itself. A 4PL typically owns no warehouses and manages other providers.
Do I lose control of my inventory with a 3PL?
No. You keep ownership, but the goods sit in someone else's building, so your contract should cover liability, count accuracy and how you get your inventory back if you leave.