Getting orders out the door fast is a big part of running a product business. You can make the best products around, but if delivery drags, customers notice (and so do your competitors).
That's why so many businesses hand fulfillment to a third-party logistics (3PL) partner. In Cin7's 2021 study of 4,000 businesses, product sellers who used 3PLs earned 14% more revenue per employee than businesses that didn't.
So, what are the benefits of 3PL, and can a partner really cut your logistics costs? We'll break down where the savings come from, how 3PL pricing works, where hidden fees lurk, and how to pick the right partner.
Key Takeaways
A 3PL (third-party logistics) company is an outside partner that handles logistics for your business. That usually means storing inventory, picking and packing orders, shipping to customers, and processing returns. Some 3PLs also manage freight and customs. You keep selling. They keep orders moving, using their own warehouses, staff, and carrier relationships.
Think of a 3PL as your shipping department, minus the lease, the payroll, and the forklift. You pay for the services you use, and the 3PL handles the day-to-day.
Not every 3PL does the same job. Here are the most common types you'll run into:
| Type | What they do | Best for |
|---|---|---|
| Warehousing and fulfillment 3PLs | Store inventory, then pick, pack, and ship orders | E-commerce and omnichannel brands |
| Transportation 3PLs | Move goods by truck, rail, air, or sea through carrier networks | Businesses shipping bulk or wholesale freight |
| Freight forwarders | Book and coordinate international shipments, including customs paperwork | Importers and exporters |
| Specialized 3PLs | Handle products with special needs, like cold storage or hazardous goods | Food, pharmaceutical, and luxury brands |
| Full-service 3PLs | Combine warehousing, transportation, and extras like kitting and returns | Businesses that want one partner for everything |
You might also hear about 4PLs. We cover the difference in the FAQ below, or you can see how 1PL, 3PL, and 4PL compare in our full guide.
The top benefits of 3PL are lower costs, expert help, cheaper shipping, more free time, easier scaling, better tech, and happier customers. Here's how each one works.
A 3PL lowers your logistics costs by spreading warehouse, labor, and shipping expenses across many clients. You get big-business economies of scale without the big-business overhead.
Here's where the savings usually show up:
The bottom line? Your logistics costs flex with your sales instead of sitting on your books as fixed overhead.
Shippers notice the difference, too. In the 2026 Third-Party Logistics Study (published October 2025), 75% of shippers said 3PLs help reduce overall logistics costs, up from 66% the year before. That's shipper opinion, not a guaranteed saving, so it's worth running your own numbers.
A 3PL gives you access to logistics experts who've already solved the problems you're about to run into. Making great products and shipping them well are two different skills, and plenty of brands nail one but struggle with the other (no shame in that).
With a 3PL partner, you tap into years of know-how on storage, packing, carriers, and returns. You get a seasoned logistics team without having to hire one.
Some 3PLs can pass along discounted carrier rates, since they negotiate with carriers for many clients and can compare options for each order. Discounts aren't automatic, though. In The Fulfillment Advisor's 2026 survey, 71% of providers used cost-plus shipping pricing (cost plus a markup), so ask how your 3PL prices shipping.
Handing fulfillment to a 3PL frees up your time and your team to focus on what you do best: making and selling great products.
The 3PL handles staffing, training, and running the warehouse floor. You get an experienced team without having to house or train anyone yourself.
And the payoff can be real. According to a 2021 Cin7 study, product sellers using 3PLs are 30% more likely to improve their profitability.
A 3PL lets you scale fulfillment up or down with demand, without signing a bigger lease or hiring seasonal staff.
Holiday rush? Surprise wholesale order? Your 3PL already has the space and people to absorb the spike. And when things calm down, you aren't stuck paying for empty shelves.
A 3PL gives you access to warehouse technology that would be pricey to buy and run on your own. Think barcode scanning, warehouse software, real-time order tracking, and automated reporting.
The trick is making sure their tech talks to yours. When your 3PL connects with your inventory management system, stock levels, orders, and shipping updates sync automatically. No more emailing spreadsheets back and forth (your inbox will thank you).
A 3PL improves customer satisfaction by getting orders to customers faster and with fewer mistakes. Many 3PLs run multiple warehouses, so they can store your stock closer to your buyers and shorten delivery times. With Cin7, you can manage inventory across multiple warehouses and 3PLs in one place.
Fewer delays and mix-ups mean fewer "where's my order?" emails and more repeat buyers.
Speed matters more than ever. In logistics provider Ryder's 2026 e-commerce consumer study of 1,160 US online shoppers, 39% expected delivery within one to two days, a four-year high. Free shipping was also the leading purchase factor for 62% of shoppers.
How does a 3PL compare to running logistics yourself? In-house logistics is mostly fixed costs you pay whether orders come in or not. A 3PL turns most of those into variable costs that rise and fall with your sales.
| Cost category | In-house logistics | With a 3PL |
|---|---|---|
| Warehouse space | Lease or mortgage, utilities, and insurance | Storage fees based on the space you use |
| Labor | Salaries, benefits, training, overtime, and turnover | Built into receiving and pick and pack fees |
| Equipment | Shelving, forklifts, scanners, and maintenance | Included in the service |
| Technology | Warehouse software licenses, setup, and upkeep | Usually included, though integrations may cost extra |
| Shipping | Rates you negotiate on your own volume | Access to the 3PL's volume discounts |
| Packaging | Bought and stored by you | Often supplied by the 3PL, sometimes for a fee |
| Management time | Your team runs the warehouse | Account fees apply, and your time goes back to growth |
Pro tip: add up what you spend in each row today before you request 3PL quotes. That way, you're comparing apples to apples.
In-house can still make sense if you ship very high volumes or need tight control over specialized processes. For many growing brands, though, the 3PL column comes out ahead.
Most 3PLs charge a mix of one-time, monthly, and per-order fees. Rates vary by provider, product size, and order volume, so always ask for a full written quote. Here are the fees you'll usually see:
| Fee | What it covers | How it's usually charged |
|---|---|---|
| Receiving | Unloading, counting, and shelving your incoming stock | Per pallet, carton, or hour |
| Storage | Keeping your inventory in the warehouse | Monthly, per pallet, bin, shelf, or cubic foot |
| Pick and pack | Pulling items off the shelf and packing each order | Per order, often plus a fee per extra item |
| Shipping | Carrier postage to get orders to your customers | Per package, based on weight, size, and destination |
| Account fees | Setup, onboarding, account management, or monthly minimums | One-time or monthly |
Some 3PLs also charge for returns processing, kitting, custom packaging, or special projects. Ask about these upfront so they don't show up as a surprise on your first invoice.
Want a ballpark? The Fulfillment Advisor's 2026 Warehousing and Fulfillment Costs & Pricing Survey asked 500 US and Canadian warehousing and fulfillment providers about their rates. Here are the averages they reported:
These are provider-reported averages, not quotes. Your total will also depend on your volume, region, and number of products, plus receiving, shipping, packaging, and returns.
A 3PL partnership isn't all sunshine and on-time deliveries. Here are the common bumps and how to steer around them.
Surprise charges can eat into your savings fast. Ask for a complete fee schedule upfront, including minimums, returns, long-term storage, and special projects. Then read the contract twice (yes, really).
Your products live in someone else's warehouse, which can feel a little nerve-racking. Set clear service levels in your contract, and ask for real-time access to stock levels and order status.
If your 3PL's systems don't sync with your sales channels and inventory software, orders can slip through the cracks. Confirm integrations before you sign.
Your 3PL packs your customer's first impression. Agree on packaging, inserts, and how errors get handled, then schedule regular check-ins.
Moving inventory from one 3PL to another takes time and money. Pick a partner that can grow with you, so you aren't shopping for a new one in two years.
A strategic 3PL partner fits your business today and where it's headed. Here's what to check before you sign. For a deeper dive, read our tips on choosing a 3PL and building a successful partnership.
Pick a 3PL that can handle where your business is going, not only where it is now. Ask how they'd handle double your current volume, a new sales channel, or a new region. Switching 3PLs is a hassle, so it pays to choose one that can go the distance.
A 3PL's tech decides how fast and accurately your orders move. Ask if they use a warehouse management system (WMS), the software that tracks where every item is and where it's going. Good tech means fewer errors, quick tracking, and timely, accurate reports.
Look for a 3PL that's worked with products like yours. That matters most if your items need special handling, like temperature control or extra security. Some 3PLs specialize in luxury goods, and others focus on pharmaceuticals. Partner with one that fits your needs.
Your 3PL should connect directly with your inventory management system. Otherwise, you're stuck copying orders and stock counts between systems by hand. (Nobody started a business to do data entry.)
Before you sign, ask which inventory systems and sales channels the 3PL already works with. If you use Cin7, Cin7 3PL Connect links your inventory, orders, and sales channels with your 3PL's warehouse. Orders flow to your 3PL automatically, and you see stock levels in one place.
Take Royal Essence, whose team spent a year struggling with spreadsheets and guesstimates before things came to a head. Today, their stock moves through 3PL warehouses on several continents, including Sydney, Pennsylvania, and the UK.
As stock ships to customers, those 3PLs sync their inventory with Cin7 Core daily. That's made time-consuming, laborious manual stock counts a thing of the past. The setup is "100 percent repeatable," as Paul from Royal Essence puts it, and they're using it again to add a 3PL in the Netherlands.
Settle on a few key performance indicators (KPIs) before you sign, and review them every month. Good ones to start with:
If the numbers slip, you'll spot it early and can fix it together. That's what turns a vendor into a real partner.
It depends on your order volume, product size, and services, so ask for a written quote that lists every fee. Most 3PLs charge a mix of receiving, storage, pick and pack, shipping, and account fees. In The Fulfillment Advisor's 2026 pricing survey, one-item direct-to-consumer pick and pack averaged $3.21 per order, before storage, shipping, and other fees.
A 3PL handles the hands-on work, like storing, packing, and shipping your orders. A 4PL (fourth-party logistics provider) manages your whole supply chain for you, often coordinating several 3PLs and carriers. Most growing brands start with a 3PL.
Sort of. With Fulfillment by Amazon (FBA), Amazon stores, picks, packs, ships, and delivers products for sellers, which is classic 3PL work. Its Multichannel Fulfillment (MCF) service also fills orders from other channels, and Amazon calls MCF an example of a 3PL.
It's time to look at a 3PL when packing orders eats up your week, you're running out of space, or shipping costs keep climbing. Expanding into new channels or regions is another good trigger.
With a 3PL, you buy and own your inventory, and the 3PL stores and ships it for you. With drop shipping, your supplier ships straight to your customer, so you never hold the stock. A 3PL gives you more control over quality and packaging.
The main risks are hidden fees, less hands-on control, and systems that don't sync. You can avoid most of them with a clear contract, agreed KPIs, and a 3PL that integrates with your inventory software. See our challenges section for more.
3PL experience means hands-on time working in or with third-party logistics, like running fulfillment for clients or managing a 3PL partnership. You'll often see it on resumes and job posts for warehouse and supply chain roles. When you're vetting a provider, it also means their track record: who they've worked with and whether they've handled products like yours.
The 7 pillars of logistics are often called the 7 Rs of logistics. They mean getting the right product to the right customer and place, in the right quantity and condition, at the right time and cost. A good 3PL is built around the 7 Rs, so you get accurate orders, on-time deliveries, and costs that stay in check.
Well-known 3PL examples include DHL Supply Chain, UPS Supply Chain Solutions, and Amazon's fulfillment services, like Fulfillment by Amazon. There are also plenty of regional and specialized 3PLs that focus on certain industries, product types, or sales channels. Look past the big names and pick the one that fits your products and customers best.
Inbound freight cost is what you pay to ship goods from your suppliers or manufacturers into your warehouse or 3PL. It's different from outbound shipping, which is the cost of getting orders from the warehouse to your customers. When you compare 3PLs, factor in inbound freight along with receiving fees. A warehouse far from your suppliers can quietly bump up your total costs.
Often, yes, especially once order volume, storage space, or your own time starts holding you back. Most 3PLs charge for what you use, so you get warehouse space, staff, and carrier rates without big upfront costs. Just check for monthly minimums and setup fees before you sign. Our tips on choosing a 3PL and building a successful partnership can help you compare options.
The benefits of 3PL go well beyond cheaper shipping. The right partner lowers your logistics costs, gives you expert help, and lets you scale without the growing pains.
The secret sauce? Connecting your 3PL to an inventory management system (IMS) that keeps everyone on the same page. Cin7 is an IMS with over 700 integrations, so your sales channels, accounting, and 3PL can all work together.
Want to see how it works? Get a demo and we'll show you how Cin7 keeps your 3PL partnership running smoothly.