Third-Party Logistics

Most US DTC brands outsource fulfillment to a 3PL once they pass a few hundred orders a day. The contract terms (minimums, storage units, receiving fees, SLAs) shape your cost per order more than the headline pick fee.

Typical invoice lines: receiving (per hour or per unit) + storage (per pallet, bin, or cubic foot per month) + pick and pack (per order + per additional item) + packaging + postage.

When should an ecommerce brand switch to a 3PL?

Many brands move to a 3PL when packing orders in-house takes too much time or space, or when they need faster shipping nationwide. Compare the 3PL's full cost per order, including storage, receiving, and minimums, with in-house costs.

• Fourth-Party LogisticsA provider that manages a brand's whole logistics network, including choosing and coordinating multiple 3PLs, carriers, and freight forwarders, rather than operating warehouses itself.
• Fulfillment CenterA warehouse built to process high volumes of small customer orders, as opposed to a distribution center that mainly ships full cases and pallets to stores.
• Cost per OrderThe total cost to fulfill and ship one customer order.
• Service Level AgreementContracted performance targets between a brand and a logistics provider, such as same-day ship rate, order accuracy, and dock-to-stock time, often with penalties for misses.