3PL – Third Party Logistics
An external company for storage, picking, packing, and shipping. The store owner sends inventory to the 3PL, receives orders, and the 3PL handles fulfillment.
In practice
A 3PL is like hiring a skilled warehouse team without a fixed salary. You pay only for usage. During peak seasons, it offers flexible workforce capacity.
Common misconception
'3PLs are only for big companies.' There are 3PLs for as few as 20 orders/day at $3-5/pick.
How to fix it
3PL not meeting SLA? (1) accuracy rate, (2) pick-and-pack time, (3) a monthly review meeting, (4) a backup 3PL.
Example
A sporting goods store: $6,000 for warehouse rent plus an employee. A 3PL at $3.75/order for 200 orders/day saved $10,500/month.
Priority
Consider a 3PL from 50 orders/day.
Related terms
Keep learning. Metrics that touch the same area:
- FulfillmentOperationsThe entire process from receiving an order to delivery: pick, pack, label, ship.
- Last Mile DeliveryLogisticsThe final leg of shipping — from the logistics center to the customer's door. 53% of shipping costs.
- Reverse LogisticsLogisticsManaging product returns: collection, inspection, sorting, restocking, or recycling. Costs 2-3x regular shipping.
- CarrierLogisticsA company that performs shipping: DHL, UPS, USPS, FedEx. Each has different pricing, speed, coverage, and reliability.
- Cross-Border CommerceLogisticsSelling internationally — currencies, languages, taxes, customs, shipping reliability.
- FBA – Fulfillment by AmazonLogisticsAmazon stores, packs, and ships for you. Includes the Prime badge and higher ranking. Fees: referral + FBA + storage.
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