In one sentence
Third-party logistics is hiring an outside company, called a 3PL, to store your inventory, pack orders and ship them to customers, so you can grow without running your own warehouse.
How third-party logistics works
- You send inventory to the 3PL's warehouse.
- Your store sends each order to the 3PL automatically.
- The 3PL picks, packs and ships the order, then sends tracking back.
- It handles returns and tells you what's in stock.
3PL vs. shipping orders yourself
Shipping yourself
Using a 3PL
Space
Your home, garage or warehouse
Theirs
Costs
Your time, supplies and rates
Per-order and storage fees
Shipping rates
What you can negotiate
Often lower, from their volume
Control
Full
Shared, set by your agreement
When should a store use a 3PL?
Usually when packing orders takes time you'd rather spend growing the business, when you run out of space, or when you need faster delivery to customers far away. Compare the 3PL's total cost per order with your own, including your time.
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