Everything eCommerce Brands Need to Know About 3PLs: Services, Benefits, and When to Use One

Picture your online store thriving, with orders pouring in from all over the country, maybe even internationally. Amazing, right? But what happens when you start running out of space to store your products or scrambling to pack and ship everything on time? Fulfillment delays, shipping costs, and growing delivery expectations now bog down your once-smooth process.

This is where a third-party logistics (3PL) provider comes in. A 3PL can take over the heavy lifting so you can focus on what truly matters—growing your brand and keeping your customers happy.

Sounds interesting? Read on to find out what a 3PL is, what it does, and how to find the right provider for your business.

What is a 3PL?

A 3PL, or Third-Party Logistics provider, is a company that manages some or all of your logistics operations on your behalf — so you don’t have to handle every piece of the supply chain yourself.

For eCommerce brands, this often means outsourcing services like:

• Warehousing — Storing your inventory in strategically located fulfillment centers.
• Pick and Pack — Selecting, packing, and labeling products for individual customer orders.
• Shipping and Freight — Managing carrier relationships and shipping rates to get your products delivered quickly and cost-effectively.
• Inventory Management — Tracking your inventory in real time to help you avoid stockouts or overstock situations.
• Returns Processing — Handling customer returns and restocking goods.
• Value-Added Services — Such as kitting, custom packaging, labeling, and light assembly.

At their core, 3PL providers act as an extension of a company’s logistics operations. This way, businesses can focus on core competencies while relying on experts to manage supply chain logistics complexities. Instead of investing heavily in your own warehouse space, labor force, and shipping infrastructure, you can partner with a 3PL to leverage their existing networks and expertise.

How 3PLs fit into the eCommerce supply chain

Think of a 3PL as an extension of your team. Instead of handling every order yourself, like storing inventory in your garage or warehouse, packing boxes, and negotiating shipping rates, a 3PL takes over those operational tasks.

This allows you to

• Scale your business without needing more physical space or staff.
• Offer faster shipping options to customers.
• Tap into advanced technology and analytics for inventory and shipping.
• Reduce operational headaches so you can focus on growth.

Whether you’re shipping 100 orders a month or 10,000, partnering with the right 3PL can be a game-changer for your eCommerce brand’s efficiency and customer experience.

3PL vs 4PL: What’s the difference?

A fourth-party logistics (4PL) provider is another term used in logistics, but one shouldn’t confuse 3PL and 4PL. Here are the key differences between the two:

3PL (Third-Party Logistics): Manages physical logistics services like warehousing, order fulfillment, and shipping. You still oversee your logistics strategy and relationships.

• Offers outsourced logistics services
• Handles the physical aspects of logistics
• Covers warehousing, transportation, and inventory

4PL (Fourth-Party Logistics): Goes beyond 3PL by managing your entire supply chain on a strategic level, often acting as a single point of contact for multiple logistics partners.

• Offers comprehensive supply chain management
• Focuses on overall supply chain strategy and management
• Covers logistics planning and optimization, data analysis, and reporting

There are also fulfillment-only providers that focus purely on storing and shipping your products, but may lack broader logistics expertise or consulting support.

What Does a 3PL Do?

3PL providers offer a wide range of logistics services, from basic warehousing and transportation to complex solutions like inventory management, order fulfillment, and reverse logistics. For eCommerce brands, working with a 3PL often means gaining access to technology, expertise, and resources that might otherwise be out of reach.

Here’s a detailed look at what third-party logistics providers do.

Transportation Management

3PLs manage the movement of goods from one location to another—whether that’s across town, across the country, or across the globe. Their services typically include:

• Domestic Transportation: Coordinating trucking, rail, or local courier services for timely and cost-effective delivery.
• International Shipping: Managing ocean freight, air freight, customs clearance, and import/export documentation to ensure compliance and smooth cross-border trade.
• Last-Mile Delivery: Handling the critical final step of getting products to customers’ doorsteps quickly and accurately.
• Freight Rate Negotiation: Leveraging high shipping volumes to secure competitive rates with major carriers.

By partnering with a 3PL, eCommerce brands can avoid the hassle of managing complex transportation networks on their own—and potentially reduce shipping costs.

Warehousing and Storage

At the core of many 3PL services is warehousing. A 3PL provides secure storage space for your products, but the value goes far beyond simply storing goods:

• Inventory Tracking: Using advanced warehouse management systems (WMS) to monitor stock levels in real-time and automate reordering processes.
• Cross-Docking: Transferring products directly from inbound trucks to outbound shipments with minimal or no storage time, speeding up fulfillment and reducing costs.
• Scalable Storage: Offering flexible space that expands or contracts with your seasonal or promotional sales fluctuations.
• Climate-Controlled Storage: Keeping sensitive products like food, cosmetics, or electronics safe under specific temperature and humidity conditions.

Warehousing with a 3PL can free up valuable space and capital for your business—and provide strategic locations closer to your customers for faster delivery.

Order Fulfillment

Perhaps one of the most critical services for eCommerce brands, 3PLs handle the entire process of getting products from warehouse shelves into your customers’ hands:

• Picking: Selecting the correct items from inventory for each order.
• Packing: Packaging orders securely, often using branded or custom materials for a premium unboxing experience.
• Labeling & Documentation: Preparing shipping labels, packing slips, and any required customs paperwork for international orders.
• Shipping: Dispatching orders through preferred carriers, optimizing for speed and cost.

3PLs often integrate directly with your eCommerce platforms (like Shopify, Amazon, WooCommerce, etc.) so orders flow automatically into their systems for rapid processing.

Shipping & Freight

3PLs specialize in coordinating and optimizing shipping and freight operations so your products move efficiently and cost-effectively from point A to point B. This includes:

• Carrier Management: Partnering with national and regional carriers to negotiate bulk shipping rates and service-level agreements.
• Freight Brokerage: Acting as a broker between your business and freight carriers (LTL, FTL, or parcel), ensuring you get the best price and service mix for each shipment.
• Rate Shopping: Comparing multiple carrier rates and delivery speeds to select the most economical or fastest option based on your preferences.
• Freight Auditing: Reviewing and verifying shipping invoices to catch billing errors and ensure cost accuracy.
• Freight Consolidation: Combining multiple shipments to reduce transportation costs and improve efficiency.

Whether you’re shipping pallets to retailers or packages to consumers, 3PLs help streamline freight operations, reduce transit times, and improve cost control—critical for eCommerce brands competing on delivery speed and price.

Inventory Management

A modern 3PL doesn’t just store your products—they help you manage your inventory more efficiently. Services often include:

• Real-Time Inventory Visibility: Access to dashboards showing live inventory counts across multiple warehouses.
• Demand Forecasting: Data analysis to predict inventory needs based on sales trends, seasonality, and market fluctuations.
• Low-Stock Alerts: Automatic notifications to reorder before products run out.
• Multi-Channel Inventory Sync: Keeping stock levels accurate across multiple sales channels to avoid overselling or stockouts.

Good inventory management reduces carrying costs and ensures customers can reliably buy your products when they want them.

Reverse Logistics

Returns are an inevitable part of eCommerce. 3PLs help brands manage this process smoothly:

• Returns Processing: Receiving and inspecting returned items.
• Restocking: Returning sellable items to inventory promptly.
• Disposal or Recycling: Handling unsellable products responsibly, including disposal, recycling, or donation.
• Refurbishment & Repair: Some 3PLs can repair or refurbish returned goods for resale, reducing waste and recapturing value.

Efficient reverse logistics can help improve customer satisfaction and protect your brand reputation.

Value-Added Services

Beyond standard warehousing and shipping, many 3PLs offer additional services to help eCommerce brands enhance their products and customer experience, such as:

• Kitting & Assembly: Combining multiple items into a single SKU—for example, gift sets, subscription boxes, or promotional bundles.
• Custom Packaging: Creating branded or specialty packaging to elevate the unboxing experience.
• Labeling & Tagging: Applying barcodes, price tags, or special compliance labels.
• Quality Control Checks: Inspecting products for defects or compliance before shipping.
• Product Personalization: Services like engraving, embroidery, or custom printing.

These extras allow eCommerce brands to differentiate themselves in competitive markets without having to build complex operations in-house.

In short, a 3PL acts as an extension of your business, handling the behind-the-scenes work that ensures your customers receive their orders quickly and accurately. For eCommerce brands aiming to scale, improve efficiency, or enhance customer satisfaction, partnering with a 3PL can be a game-changing decision.

Read: 3PL Myths and Misconceptions

Outsourcing logistics to a 3PL: Pros and cons

Using a 3PL has various benefits and challenges. Here are the pros and cons to consider:

3PL pros

• They help businesses avoid capital investment required for warehouses, transportation fleets, and logistics technology.
• They empower businesses to focus on core functions like product development, sales, and marketing.
• 3PL providers are logistics specialists with deep knowledge of transportation, warehousing, regulations, and customs.
• They often use sophisticated warehouse management systems (WMS), transportation management systems (TMS), and real-time tracking tools.
• With access to advanced technology and refined processes, they help ensure timely and accurate order fulfillment, which improves the overall customer experience.

3PL cons

• Outsourcing logistics to a third party minimizes companies’ direct control over aspects of their supply chain, including storage, handling, and shipping.
• Businesses may become overly dependent on their 3PL provider, making it difficult to switch providers.
• Some 3PL contracts may include hidden fees for services like storage overages, extra packaging, or special handling.
• Poor communication between the business and 3PL may lead to delays and mistakes in order fulfillment or inventory management.
• 3PL providers may not adhere to the same quality standards as the business would, which can lead to incorrect orders or slow response times to inquiries.

Fulfilling in-house: pros and cons

Internal fulfillment is another option for businesses wanting complete control over logistics, but it may come with risks over scalability. Here are the advantages and drawbacks:

Pros of Internal Fulfillment

• Businesses have hands-on access to their inventory, order processing, and shipping, allowing them to oversee quality, speed, and accuracy directly.
• Internal fulfillment allows businesses to monitor inventory levels and order patterns without relying on a third-party provider.
• Brands can customize the packaging, shipping methods, and even branding, offering a more personalized experience to customers.
• Businesses can avoid fees associated with using a 3PL.
• Companies can establish relationships with carriers and negotiate their own shipping rates, potentially finding lower-cost options.

Cons of Internal Fulfillment

• It often requires a significant up-front investment in infrastructure, such as warehouse space, technology, and labor.
• Small businesses may have limited access to shipping options and may not be able to negotiate competitive rates.
• It requires knowledge and expertise in logistics, making it complex for businesses without a background in these areas.
• Businesses may face challenges in managing large volumes of orders without outsourcing during peak seasons.
• In-house fulfillment requires constant attention and management of the supply chain, which can distract from a business’s core functions.

Why eCommerce brands use 3PLs

A lot of eCommerce brands turn to 3PLs during times of high growth when they want to scale. Usually, brands come to us overwhelmed with increasing order volumes and costs, and are looking for help with better shipping rates and fees, proper storage space, packing and shipping orders quickly and accurately, and managing returns.

Here are a few reasons our customers have highlighted coming to a 3PL.

Scalability without the investment

Building your own logistics infrastructure is expensive. Warehouses, technology, staff, equipment, and carrier relationships all require significant upfront costs and ongoing management.

Partnering with a 3PL lets brands tap into an established logistics network without the need to lease warehouse space or hire large fulfillment teams. Instead of investing millions to scale your operations, you pay for only the space and services you need, when you need them.

Faster, more affordable shipping

Providing the most affordable, optimized shipping rates is something we’re incredibly proud to offer at iDrive Logistics.

Your customers expect lightning-fast delivery and free shipping, but shipping small packages individually can be costly and slow if handled in-house.

3PLs:

• Maintain relationships with major carriers, securing better shipping rates thanks to high-volume discounts.
• Strategically position warehouses near key customer regions, reducing transit times and shipping costs.
• Optimize shipping routes and methods, choosing the most cost-effective or fastest options for each order.

This allows eCommerce brands to offer competitive shipping speeds and rates without sacrificing profit margins.

Ability to focus on their core business

Running an eCommerce business doesn’t mean packing boxes. It means building a brand. Marketing, product development, customer service, and brand-building all demand time and attention (and are harder to outsource than pick and pack).

A 3PL takes logistics operations off your plate so you can:

• Spend more time on growth and innovation.
• Reduce the stress of managing daily fulfillment operations.
• Avoid being bogged down by shipping issues or warehouse staffing headaches.

Outsourcing logistics frees your team to focus on what truly drives revenue and customer loyalty.

Improved technology and visibility

Modern 3PLs offer advanced technology platforms that provide real-time visibility into your supply chain. For example, a 3PL can provide live inventory tracking across multiple warehouse locations, platform integrations for cross-channel tracking, and automated order routing and tracking updates for customers.

This level of visibility and data insight is often difficult and expensive to build in-house, especially for small or mid-sized eCommerce brands. However, good 3PLs come with detailed reporting and analytics to support better decision-making.

Flexibility to handle fluctuations

eCommerce sales can spike suddenly during holidays, promotions, or viral moments. If you’re fulfilling orders yourself, sudden demand can quickly overwhelm your staff and space.

A 3PL is built to handle these fluctuations. They:

• Scale warehouse space and labor as your volumes rise or fall.
• Help manage seasonal inventory surges without requiring permanent overhead costs.
• Offer flexible service agreements so you only pay for what you use.

This flexibility helps brands keep customer promises even during unexpected surges in demand.

An enhanced customer experience

Your logistics operation directly impacts your customers’ experience. We often say 50% of the buyer experience happens after they’ve paid. Think about how quickly an order arrives, and how seamless a return process feels.

A3PL can help deliver:

• Faster, more reliable shipping.
• Branded packaging and customized fulfillment for a premium unboxing experience.
• Smooth, hassle-free returns processes that boost customer satisfaction and loyalty.

Partnering with a 3PL isn’t just about operational efficiency—it’s about elevating the customer experience that fuels your brand’s reputation.

Cost savings and optimization

While using a 3PL comes with fees, many brands ultimately save money through:

• Lower shipping rates negotiated by the 3PL.
• Reduced labor costs and warehouse overhead.
• Fewer costly errors or inefficiencies in packing and shipping.
• Avoidance of expensive capital investments in buildings, equipment, and technology.

Over time, many eCommerce brands find that outsourcing logistics delivers a positive return on investment—and gives them more room to grow profitably.

In short, a 3PL enables eCommerce brands to grow faster, operate more efficiently, and deliver exceptional customer experiences, without the high costs and complexity of building their own logistics networks.

Read: The Future of 3PLs and eCommerce: Trends and Predictions

When should you use a 3PL?

Is a 3PL right for your business? If you’re seeing high order volumes, facing space restraints and slow shipping times, and you’re spending more time on logistics instead of growth — it’s time to work with a 3PL.

Here are some questions to guide you when it’s best to work with a third-party logistics provider:

• Do you want to reduce costs and improve shipping efficiency?
• Are high order volumes making logistics overwhelming to manage in-house?
• Do you need access to advanced logistics technology or specialized expertise?
• Is logistics management taking time and resources away from your primary business activities?
• Do you have limited experience in inventory management, shipping, and returns?
• Are high error rates in order fulfillment or inventory management becoming a costly problem for your business?

If you’ve answered yes to most questions, then working with a 3PL may benefit your business!

Read: How to Choose a 3PL Provider

Let iDrive help you find the right logistics solution for your business

As eCommerce and global trade become increasingly complex, 3PLs allow businesses to focus on core functions. That, while leveraging the provider’s network and expertise to optimize logistics processes.

If your business is growing fast and managing everything feels like a maze, partnering with a 3PL is your next big move!

At iDrive Logistics, we’re fully equipped to help you find the best 3PL for your needs. Contact us today, and let us tailor a logistics solution that optimizes your operations for success.