What Is 3PL? Benefits Of Third‑Party Logistics For Ecommerce

There comes a time for most eCommerce businesses when they realize they simply don’t have the ability, experience, or time to handle everything on their own, and they look to others for support. Often, they’ll turn to 3PL, or third-party logistics, to take care of the tasks they can’t or don’t want to. If you’re new to the e-commerce game, you may be wondering, what exactly is a 3PL provider, what services do they provide, and what are some 3PL benefits?

3PL Meaning: Definition & How It Helps Ecommerce Brands

3PL stands for Third-Party Logistics. According to the Council of Supply Chain Management Professionals (CSCMP), it’s defined as:

“A person who solely receives, holds, or otherwise transports a consumer product in the ordinary course of business but who does not take title to the product.”

The term “3PL” was coined in the 1970s, but the concept has been around much longer. As far back as the 1700s, companies were hiring others to manage shipping logistics across continents. Since the rise of e-commerce in the 1990s, 3PL providers have become essential for businesses of all sizes.

At its core, 3PL is about outsourcing logistics operations, such as inventory storage, order fulfillment, and shipping, to a specialized partner. By doing so, businesses can focus on product, brand, and growth, while the 3PL handles the complexity of getting products to customers.

Here’s how working with a 3PL provider typically works:

1. Receiving Inventory

You send your products to the 3PL’s fulfillment center. They receive, count, scan, and organize your inventory in their system.

2. Warehousing

Products are stored securely and tracked using warehouse management software that provides real-time inventory updates.

3. Order Processing

When a customer places an order, the 3PL’s system automatically receives the request and begins processing it.

4. Picking & Packing

Items are picked from inventory, packed according to your brand’s specifications, and prepared for shipment. Custom packaging can also be applied.

5. Shipping

The 3PL ships the order using the most cost-efficient carrier, often from the warehouse closest to the customer, reducing delivery time and cost.

6. Returns Management

If a return is initiated, the 3PL handles the process, restocks the product (if possible), or disposes of it per your return policy.

By managing this end-to-end process, 3PL providers help brands streamline fulfillment and scale efficiently.

5 Key Benefits Of 3PL Fulfillment For Ecommerce Businesses

Now that you know the background of 3PLs, let’s take a look at some of the primary benefits they offer e-commerce businesses.

1. Reduce Overhead & Shipping Costs

Storage and shipping are some of the largest costs associated with ecommerce retailers. When they work with a 3PL, the need for space—and the cost to rent or maintain it, along with overhead expenses—can be eliminated or reduced. When it comes to shipping, 3PLs also have relationships with carriers which results in discounted pricing that’s passed on to customers.

In addition, many 3PLs operate out of multiple locations, so they can ship products from the facility closest to the customer (the fewer zones a product travels across, the less it will cost).

2. Leverage Expert Fulfillment Knowledge

Logistics are the speciality of a 3PL. By using one, you can tap into the knowledge of their experts and take advantage of the latest software and equipment that they’re utilizing. For example, employees at a 3PL are pick-and-pack experts, and know the most efficient ways to get your product to your customer. They’ll also use the latest technology, which provides top-notch security, tracking, payment processing, and more.

3. Expand Nationally & Globally With Ease

Some ecommerce businesses feel bound by their location and remain local or national, unsure of international rules and regulations. Many 3PLs have a global reach, allowing businesses to bring their brand to a global audience. With estimates placing the global digital buying market at more than 2 billion, thinking outside the border can really pay off!

4. Deliver Reliable Support & Returns

Being able to handle returns, exchanges, and refunds is just as important as selling a product. Of course, many small ecommerce businesses aren’t able to offer 24/7 support through email or phone to do this. A 3PL, on the other hand, has the staff to do just that.

5. Grow Without Limits

Many startups and small ecommerce companies can handle logistics at the beginning, but as they grow, space can become an issue and fulfilling orders fast enough can become difficult, resulting in shipping delays and disappointed customers. A 3PL handles fulfillment in a timely manner regardless of the number of orders and can reduce your space (and your costs) during slow periods too.

Is 3PL Logistics Right For You?

If you're still unsure whether a third-party logistics provider is the right fit for your business, consider the following signs:

• You're spending too much time packing orders.
  If logistics are taking you away from product development or marketing, it's time to delegate.
• Your shipping costs are adding up.
  Without volume discounts or smart zone-based shipping, you're likely overpaying.
• You’re running out of space.
  Your home, office, or warehouse is overflowing, and it’s affecting productivity.
• Customers are waiting too long.
  Delivery delays can erode trust and reduce repeat purchases.
• You're ready to expand.
  Whether it’s international shipping or simply growing your SKU count, 3PLs make scaling possible without massive overhead.

If several of these points resonate, a 3PL like The Fulfillment Lab can help you move forward with confidence.

What Is 3PL - FAQs

What Does 3PL Mean In Logistics?

3PL stands for Third-Party Logistics, which refers to outsourcing logistics operations, like warehousing, order fulfillment, and shipping, to an external provider.

What Is An Example Of A 3PL Company?

A 3PL company manages the behind-the-scenes logistics for online retailers. They store inventory, pick and pack orders, handle shipping, and manage returns. The Fulfillment Lab is a 3PL provider offering all these services and more.

How Is 3PL Different From 4PL?

A 3PL handles physical logistics tasks (like fulfillment), while a 4PL oversees your entire supply chain, often managing multiple 3PLs and offering strategic consulting.

Is 3PL Right For Small Businesses?

Yes. Small and growing businesses often use 3PLs to eliminate the need for warehousing, speed up fulfillment, and access discounted shipping rates.

What Industries Benefit From 3PL Services?

Industries like e-commerce, retail, cosmetics, wellness, supplements, and apparel benefit from 3PLs. These providers help streamline logistics and enhance customer satisfaction.

How The Fulfillment Lab Goes Beyond Standard 3PLs

While you’re likely to find some or all of the above benefits available through many 3PLs, The Fulfillment Lab takes services a step further! Not only do we provide cost savings, experience, reach, customer service, and scalability, we also offer customized packaging solutions.

Customized packaging options let you create your own custom shipping boxes, coupons, and inserts, upgrading your packaging to make it fresh and exciting every time someone makes a purchase. Often, this can be based on demographics, spending behaviors, birthdays or anniversaries, and more.

This helps build loyalty and turns customers into brand advocates. At The Fulfillment Lab, customizing packaging is as easy as logging into your own unique portal and interacting with our user-friendly fulfillment software.

To learn more about how we can help your e-commerce business boost efficiency and improve its customer experience as your end-to-end fulfillment partner, contact us today!