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

By iDrive Logistics team  |  Published December 2, 2024  |  Updated October 26, 2026

A 3PL, or third-party logistics provider, is a company you hire to run some or all of your physical logistics: receiving inventory, storing it, picking and packing orders, shipping them, and processing returns. You keep ownership of the product and the customer. The 3PL supplies the warehouse space, the labor, the warehouse management system (WMS) and the carrier accounts, and bills you for each activity.

For an eCommerce brand, "3PL" almost always means outsourced fulfillment. Orders from Shopify, Amazon or a wholesale account flow into the 3PL's system automatically. A picker pulls the items, a packer boxes them, a label prints, and a carrier collects the parcels at the end of the day. You watch stock levels and order status in a portal instead of walking the shelves yourself.

What is a 3PL responsible for?

Every eCommerce 3PL runs some version of the same six steps:

1. Receiving. Your manufacturer or freight forwarder delivers pallets or cartons. The 3PL checks them against your advance shipping notice (ASN), counts units, flags damage and puts the stock away. The time this takes is called dock-to-stock; until it's done, the inventory can't be sold.
2. Storage. Inventory sits in pallet racks, shelves or bins, tracked by location in the WMS. Food, supplements and cosmetics often need lot numbers and expiration dates tracked so the oldest stock ships first.
3. Order intake. Your store, marketplaces and EDI feeds push orders to the 3PL through integrations. Address edits, holds and cancellations happen here, before the order is picked.
4. Pick and pack. Staff pull each item, verify it by barcode scan, choose the box and add any inserts. Accuracy is measured at this step.
5. Shipping. A label prints from one of the 3PL's carrier accounts (or yours), the parcel is manifested, and tracking goes back to your store and your customer.
6. Returns. Returned items are received, inspected and either restocked, refurbished or written off. This is not a small job: the National Retail Federation estimated that 19.3% of online sales would be returned in 2025. Our guide to reverse logistics covers that side in more detail.

If any of the terms above are new, our fulfillment glossary defines them, from ASN to cross-docking.

3PL services eCommerce brands actually use

The six steps are the core. Most brands add a few of these on top, and they are where 3PLs differ the most:

• Inventory management. Real-time counts by SKU and location, low-stock alerts, cycle counts, and lot or expiration control. Multichannel brands need stock synced across every channel so they don't sell the same unit twice.
• B2B and retail fulfillment. Shipping cases and pallets to retailers to their routing guides and labeling rules, alongside your direct-to-consumer orders. Retailers fine vendors for missing these rules, so ask any 3PL which retailers it already ships to.
• Kitting and assembly. Building gift sets, bundles and subscription boxes from separate SKUs.
• Custom packaging and inserts. Branded boxes, tissue, thank-you cards and marketing inserts.
• Amazon prep and FBM. Labeling and prepping inventory for Amazon's warehouses, or shipping Amazon orders yourself through the 3PL under Fulfilled by Merchant.
• Freight. Booking LTL and full truckload for inbound replenishment and outbound wholesale orders.
• Cross-docking. Moving goods from an inbound truck straight to an outbound one with little or no storage time.
• Climate control and compliance. Temperature-controlled space, and for food and supplements, FDA-registered facilities.

Most 3PLs give clients access to discounted carrier rates built on the combined volume of everyone in the building. How far that goes varies a lot. Some 3PLs print every label on one or two carrier accounts. Others compare rates across many carriers on each order, audit the invoices and file the claims. That second job is managed shipping, and it can sit underneath a 3PL relationship or run separately. We explain where the two overlap in managed shipping vs 3PL.

How a 3PL fits into the eCommerce supply chain

A 3PL sits between your factory and your customer's door. A simplified flow looks like this: the manufacturer produces the goods, freight brings them to the 3PL's warehouse, the 3PL stores and fulfills them, and a parcel carrier delivers each order.

The split of responsibilities is fairly consistent. You keep demand forecasting, purchasing, supplier relationships, pricing and your sales channels. The 3PL owns everything from the receiving dock to the shipping label. Data connects the two: your store or ERP sends orders and purchase orders, and the 3PL's WMS sends back inventory levels, shipment confirmations and tracking numbers.

Parcel rates are priced by zone, so a single warehouse on one coast pays higher zones and longer transit times to reach customers on the other. Splitting inventory across two warehouses, one in the West and one in the East, puts more customers in lower zones. The trade-off is more inventory to manage and more inbound freight. When Gnarly Nutrition, a sports nutrition brand, moved its fulfillment to iDrive in 2020, having warehouses on both coasts and close to its manufacturers was one of the reasons it gave (read the Gnarly Nutrition case study).

3PL vs 4PL, fulfillment centers and dropshipping

Model	What it does	Who holds your inventory	Usually a fit for
In-house	You run your own warehouse, staff and carrier accounts	You	Low volumes, or brands with unusual handling needs and the team to run it
3PL	Runs warehousing, fulfillment and often shipping and returns on your behalf	The 3PL, in its warehouses	Most growing eCommerce brands
4PL	Manages your logistics as a whole, coordinating several 3PLs, carriers and forwarders; usually doesn't operate warehouses itself	The 3PLs it manages	Large companies with complex, multi-region networks
Fulfillment center	The building where orders are picked, packed and shipped	Whoever operates it (you, a 3PL, or a marketplace such as Amazon)	Not a business model on its own
Dropshipping	Your supplier ships each order directly to the customer	The supplier	Brands testing products or selling items they don't manufacture

3PL vs 4PL. A 3PL does the physical work. A 4PL manages the people who do the physical work. With a 3PL, you still decide strategy: how many warehouses, which carriers, what service levels. A 4PL takes over that planning and acts as a single point of contact for every provider in your network. That makes sense for a company juggling several countries and dozens of providers. For a brand shipping from one or two warehouses, a 4PL adds a layer of fees and distance between you and the people packing your boxes.

1PL and 2PL. You may also see these. A 1PL is a company handling its own logistics. A 2PL is an asset-based carrier, such as a trucking company or a parcel carrier, that moves goods for you but doesn't store or fulfill them.

3PL vs freight broker. Some of the largest 3PLs by revenue are transportation companies that arrange freight and never touch your product in a warehouse. When an eCommerce brand says "3PL", it nearly always means the warehouse-and-fulfillment kind, so check which kind a provider is before you request a quote.

3PL vs dropshipping. The question is who owns and holds the inventory. With a 3PL, you buy the stock and control the packaging, inserts and shipping speed. With dropshipping, you never hold the stock, but you also give up control over how and when the order ships.

Pros and cons of using a 3PL

Pros

• No warehouse to lease or staff. Rent, racking, forklifts, a WMS and hourly labor turn into a variable cost that rises and falls with orders.
• Peak capacity. A 3PL can add pickers in November without you hiring and training seasonal staff.
• Carrier rates. The 3PL's combined volume usually earns better parcel rates than a small brand can get on its own.
• Systems and process. Barcode scanning, lot control, retailer compliance and returns workflows already exist and have been run thousands of times.
• Time. Your team stops packing boxes and goes back to product, marketing and sales.

Cons

• Less direct control. You can't walk over to fix a mispick. You depend on the 3PL's tools and response times to change an address or hold an order.
• Fees stack up. Receiving, storage, pick and pack, packaging, returns, account management and monthly minimums all show up as separate lines. A low pick fee can be offset elsewhere.
• Switching is work. Moving inventory and integrations to a new 3PL takes weeks of planning and usually a short period of split operations.
• You compete for attention. If the 3PL grows faster than its staff, smaller clients feel it first.

Most relationships do work out. In the 2025 Third-Party Logistics Study from NTT DATA, Penske and Penn State, almost 90% of shippers said their 3PL relationships were successful. The failures tend to come from fit: a 3PL built for a different order profile, channel mix or growth rate than yours. We wrote about that pattern in what growing brands get wrong about 3PL fit.

3PL costs and pricing models

Most eCommerce 3PLs price per activity. The averages below come from The Fulfillment Advisor's 2025 survey of more than 600 warehouses. Treat them as a starting point; your quotes will move with order profile, product size and location.

• Pick and pack: $3.20 per B2C order on average. Many 3PLs charge a base per order plus a smaller fee for each additional item.
• Storage: $20.17 per pallet per month on average. Smaller items are often billed per bin, shelf or cubic foot.
• Receiving: billed per pallet, per carton, per hour or per container. Unsorted or poorly labeled inbound costs more.
• Returns: 92% of the warehouses surveyed charge for returns, at an average of $4.06 per return.
• Setup: 51% charge a one-time onboarding fee.
• Monthly minimum: the average minimum monthly spend was $517 in 2025, up from $338 in 2024.
• Annual increases: 77% of warehouses said they raise prices regularly, by 3.57% a year on average.

Packaging materials, kitting labor, special projects and account management may be billed separately. Postage is usually passed through or marked up on top of all of this, and it is often the largest number on the invoice. As an illustration, on an order with a $3.20 pick fee and a $9 label, a 10% difference in postage is worth more than a quarter of the whole pick fee. Compare quotes on total landed cost per order, not on the pick fee alone.

The common pricing structures are:

• À la carte. Separate rates for each activity, as above. The most common model for eCommerce and the easiest to audit.
• Bundled per order. One fee per order that includes pick, pack and basic packaging, sometimes postage too. Simple to budget, harder to compare.
• Cost-plus or open book. You pay the 3PL's actual labor and space costs plus a management fee. More common in dedicated contract warehousing than in shared eCommerce fulfillment.

The fastest way to compare 3PLs is to send each one the same month of real order data (order count, units per order, SKU count, pallet count, returns and destination ZIP codes) and ask for a priced invoice. Then compare totals, not rate cards.

When is a brand ready for a 3PL?

There is no single order-count threshold. Brands usually make the move when one of these becomes true:

• Packing orders takes up more founder or team hours than marketing, product or sales.
• You are out of space, or about to sign a warehouse lease.
• Peak season means late orders, overtime and temporary staff you have to train each year.
• Customers in distant zones wait too long or cost too much to reach from one location.
• You are adding a channel, such as retail or Amazon, that comes with compliance rules you don't have the systems for.
• You already use a 3PL, but errors, slow replies or lack of control are costing you customers.

That last one is common. Gnarly Nutrition came to iDrive in 2020 from another 3PL after order errors, delays and limited control over changes such as address edits. Its operations director said the previous provider had "kind of put us on the back burner." Inside the iDrive fulfillment relationship, which included access to iDrive's WMS and regular carrier reviews, the brand grew 40% year over year from 2020 to 2023.

For checklists and vetting questions on choosing a provider, see how to choose a 3PL partner and our 10 tips for choosing a fulfillment partner.

3PL FAQs

What does 3PL mean?

3PL stands for third-party logistics. The "third party" is the outside company running logistics between the seller (first party) and the buyer (second party).

What is a 3PL in shipping?

In parcel shipping, a 3PL usually means the warehouse that packs your orders and prints the labels on its carrier accounts. In freight, it can also mean a broker or transportation company that arranges trucking without storing goods.

Is Amazon FBA a 3PL?

FBA is outsourced fulfillment for orders on Amazon, so it works like a 3PL for that channel. It doesn't fulfill your Shopify or wholesale orders the same way, which is why many brands use FBA for Amazon and a separate 3PL for everything else.

What is the difference between a 3PL and a 4PL?

A 3PL runs the warehouse and ships your orders. A 4PL manages your logistics network and the 3PLs and carriers in it, usually without operating warehouses itself.

Where iDrive fits

iDrive runs 3PL fulfillment through a national network of vetted, owner-operated warehouses, with managed shipping underneath it on direct contracts with 12+ national and regional carriers. If you are weighing a move to a 3PL or away from your current one, talk to our team and bring a month of order data.