Third party logistics, or 3PL as it is commonly referred to, is the outsourcing of the fulfillment of orders to an external party. A 3PL service provider will handle the receiving of products, the fulfillment and shipping of orders with those products, and any returns of those orders on your behalf.
Third-party logistics (3PL) is a service where businesses outsource their supply chain and logistics operations to specialized providers, known as 3PL companies.
These logistics providers handle critical tasks such as inventory management, warehousing, order fulfillment, and shipping. By leveraging the expertise and infrastructure of a 3PL warehouse, companies can streamline their supply chain, reduce costs, and improve customer satisfaction.
To understand 3PL in context, let’s compare it to other logistics models:
The 3PL industry has seen tremendous growth in recent years, driven by the rise of eCommerce and the need for efficient supply chain solutions.
By outsourcing logistics to 3PL providers, businesses across industries can focus on growth while ensuring reliable and efficient supply chain operations.
A 3PL service provider manages various aspects of the supply chain, from receiving inventory to delivering orders to customers. While specific services may vary between 3PL companies, here’s a breakdown of the core logistics processes:
This process allows businesses to focus on product development and marketing while leaving logistical operations to experienced providers. By partnering with a 3PL, companies can reduce costs, scale efficiently, and deliver exceptional service to their customers.
Third-party logistic providers have a fairly complex pricing structure, which will vary from provider to provider. The most common is charging a fee for each step of the fulfillment process:
Having a 3PL provider offers several advantages to companies by outsourcing order fulfillment logistics. The main benefits are:
Selecting the right third-party logistics (3PL) provider is a critical decision that can greatly impact your supply chain efficiency, customer satisfaction, and overall business growth. To ensure you choose a provider that aligns with your needs, consider the following steps:
Begin by evaluating the 3PL’s network of warehouses and distribution centers.
A provider with facilities strategically located near your target markets can significantly reduce shipping times and costs.
If you plan to expand internationally, prioritize a provider with a strong global presence and expertise in navigating customs, tariffs, and international freight logistics.
This alignment with your business's shipping goals, whether local, regional, or global, is essential for ensuring smooth operations.
Carefully review the provider's cost structures and request a transparent breakdown of all fees, including storage, picking and packing, shipping, and additional service charges.
Be mindful of hidden costs, such as fees for reverse logistics, custom packaging, or peak season surcharges.
Comparing cost structures across multiple 3PL companies will help you identify a partner that offers the best balance between affordability and service quality.
Choose a logistics provider with proven expertise in your specific industry.
For example, eCommerce businesses should look for providers adept at handling fast-moving inventory, real-time order tracking, and efficient last-mile delivery.
Retail businesses benefit from providers experienced in large-scale distribution and consistent restocking.
Similarly, manufacturers require a 3PL with a deep understanding of B2B supply chains, raw material management, and freight shipments. Industry-specific knowledge ensures the provider is equipped to address your unique challenges.
A 3PL should offer more than just basic warehousing and shipping services.
Seek providers that deliver additional capabilities, such as custom packaging to enhance your brand’s unboxing experience and reverse logistics to handle returns efficiently.
Providers that offer technology integration, including advanced inventory management software and real-time tracking, can streamline operations.
Additionally, international shipping expertise is invaluable for businesses targeting global markets, as it ensures smooth cross-border logistics and compliance with customs regulations.
Ensure the 3PL provider can scale with your business as it grows.
This includes their capacity to handle increased inventory levels, seasonal demand fluctuations, and potential international expansion.
Flexibility to adapt to changing supply chain strategies or accommodate special requests is equally important for maintaining a strong partnership as your business evolves.
Choose a logistics provider known for responsive and proactive customer support.
Providers that offer a dedicated account manager or support team can quickly address and resolve any operational challenges.
It is helpful to review testimonials and case studies to gauge their reliability and reputation for excellent service.
Before committing to a long-term partnership, conduct a trial run or pilot program to test how well the 3PL integrates with your operations.
This allows you to identify potential challenges and ensure their systems align with your workflow, such as inventory tracking and reporting.
A trial period also gives you insight into how effectively the provider communicates and adapts to your needs.
By following these steps, you can confidently select a 3PL provider that meets your business requirements, enhances your supply chain processes, and supports your long-term growth objectives.
Outsourcing order fulfillment to 3PL companies offers numerous advantages but also presents certain challenges.
When relying on a 3PL warehouse for critical aspects of supply chain management, businesses often face limitations such as reduced direct oversight of inventory management, logistical operations, and customer service. This can lead to quality control issues and potential delays in shipments or delivery.
Here are some major limitations you can face using a 3PL company:
Despite these limitations, businesses can streamline their supply chain by fostering clear communication and setting performance benchmarks with their 3PL provider. This approach can help optimize fulfillment and ensure the 3PL partnership is an asset rather than a liability.
In-house fulfillment is a logistics strategy where a business manages all aspects of its order fulfillment process internally without outsourcing to third-party providers.
This includes tasks such as inventory management, warehousing, packing, and shipping products directly to customers.
Choosing between outsourcing logistics to a 3PL company or managing fulfillment in-house is a critical decision that impacts your supply chain, operational efficiency, and customer experience. Here’s how the two compare:
Pros:
Cons:
Pros:
Cons:
By weighing the pros and cons of third-party logistics versus in-house fulfillment, businesses can choose the strategy that aligns with their growth objectives, budget, and customer needs.
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Fourthwall’s 3PL fulfillment services make it easy to manage products you’ve sourced or created yourself—offering seamless inventory storage, preparation, and shipping support.
Whether you’re selling custom designs or unique items not in our catalog, Fourthwall’s partnership with warehouses in California and Kentucky ensures your goods are delivered efficiently and professionally.
With straightforward pricing, detailed shipping guidelines, and expert support every step of the way, you’ll have the tools to keep your customers happy and streamline your operations.
Get started today, and let Fourthwall handle the logistics so you can focus on creating!
A 4PL (fourth-party logistics) provider is a supply chain management partner that oversees and coordinates the entire logistics process, acting as a single point of contact for businesses.
Unlike 3PL logistics companies, which focus on specific tasks like warehousing, shipping, or inventory management, 4PL providers manage multiple 3PLs, shippers, carriers, and transportation services to deliver comprehensive logistical solutions.
They handle everything from freight coordination and LTL (less-than-truckload) shipments to storage and distribution, optimizing the supply chain for maximum efficiency.
By outsourcing logistics to a 4PL, businesses can streamline complex operations, reduce costs, and focus on core activities while ensuring smooth delivery and managed inventory across their networks.
Acting as critical partners in the supply chain, 3PLs handle tasks such as shipments and distribution and work with carriers to ensure efficient delivery.
They provide logistical solutions to help businesses manage inventory, optimize transportation, and streamline operations, allowing companies to focus on their core activities.
Unlike 4PL providers, which oversee and coordinate multiple logistics services and partners, 3PLs focus on specific aspects of the supply chain, such as warehousing, trucking, and last-mile delivery.
3PLs (third-party logistics) and 4PLs (fourth-party logistics) are key players in supply chain management, offering businesses varying levels of logistical support.
3PLs are logistics companies that handle specific services such as warehousing, inventory management, freight transportation, and order fulfillment, allowing businesses to streamline operations and focus on core activities.
In contrast, 4PLs act as strategic partners that manage and coordinate the entire supply chain, overseeing multiple 3PLs, carriers, and transportation services to provide an end-to-end logistical solution.
While 3PLs focus on operational tasks like storage and shipments, 4PLs deliver comprehensive supply chain management, offering businesses a single point of contact for optimizing efficiency across all logistics services.
There are no monthly fees, no upfront costs, and no contracts to use Fourthwall. You set your prices and choose your own margins. Here is how our pricing and splits work when you sell:
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Product costs are listed directly in our product catalog.
If a t-shirt is listed in our catalog at a $10 cost, we will automatically deduct that amount from your profits whenever you make a sale. You can sell products for any price you want.
For example, if you sell the shirt for $22, you'll make $12 in profit on each unit sold. If you sell it for $50, then you'll make $40 in profit on each unit sold.
Yes! Fourthwall works with manufacturing & fulfillment partners around the globe in the US, UK, EU, Canada, Mexico, Australia, and Japan.
Shipping rates are dynamically determined by the size of package and destination. We work with most major carriers and pass through the true cost of shipping. That means that you can offer low-cost, fast shipping to your fans. Most items have a delivery window of 5-8 days.
Be sure to browse our product catalog to find products that are fulfilled out of your target regions to provide the fastest & cheapest shipping for your community.
Fourthwall operates as the "Merchant of Record", which means that we're responsible for handling all sales taxes. This includes nexus registration, collecting sales tax, and remitting this to US states & other countries.
That way you can focus on designing products and promoting your shop, not taxes.
Yes. You can connect a custom domain or subdomain on Fourthwall. Learn More.
If you need help finding an artist or designer, check out our design community.
This is a vetted network of exceptional designers that can help you make great quality designs for your audience. We also recommend tools like Canva or Kittl.
Yes. For any product from our product catalog, we'll handle all customer support for you.
From answering general order questions to making address changes, our team is there to ensure that your buyers are treated with the same level of care that you would personally give them. We have a 12-hour or less average reply time, including nights and weekends.
For any items that you source on your own and ship from home, however, you'll need to do customer support.
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