A 3PL is a third-party logistics provider — a company that stores your inventory, picks and packs your orders, and ships them to customers on your behalf. You retain ownership of the goods; they operate the warehouse and shipping.
The longer version.
A 3PL (third-party logistics) provider is the company that handles your fulfilment between manufacture and customer delivery. You ship your inventory to their warehouse; they receive it, store it, pick orders as they come in, pack them, and dispatch via courier or freight. The relationship is operational outsourcing — you keep ownership of the inventory and the customer relationship; the 3PL operates the physical layer.
Key facts.
Why brands use 3PLs.
- Faster scaling without warehouse lease commitment
- Access to better carrier rates than DTC brands can negotiate alone
- Operational expertise in pick accuracy, returns, and peak season
- Geographic distribution without operating multiple warehouses yourself
Common pitfalls.
- Choosing on first-pick rate alone — hidden fees and shipping margin often dominate total cost
- Underestimating returns processing cost in returns-heavy categories
- Auto-renewing into stale rates because the notice window was missed
- Not getting per-line-item pricing into the rate card
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