Third Party Logistics Explained – Essential Insights For Your Business

For small to medium business owners and e-commerce managers, 3PL logistics can transform how operations run. It turns fixed expenses—leases, equipment, payroll—into variable costs tied to actual volume. You gain flexibility to scale up during busy periods without the headache of recruiting and training seasonal staff. You tap into expertise and best practices that keep your orders accurate and your returns swift.

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This guide will take you through what third party logistics really means, how it works, and which questions to ask before choosing a provider.

What Is 3PL with an Example?

Suppose you run a small home accessories brand out of Bristol. You design cushions, candles and throws. Initially you’ve been packing orders yourself from a small rented storage unit. As sales climb, you can’t keep up: orders take two or three days to go out, mistakes become more frequent, and customers start asking for faster delivery.

You decide to partner with a 3PL located just outside Birmingham. Here’s how it works:

• Inbound Shipments: You send pallets of cushions, candles and throws to the 3PL’s warehouse. They unload, inspect each shipment and store goods according to category (fragile items like candles get special shelving).
• Inventory Management: Their WMS tracks every cushion and candle. When stock dips below a set threshold, you receive alerts so you can reorder from your manufacturers.
• Order Receipt & Picking: When a customer places an order on your website, the 3PL’s system receives it instantly. A picker retrieves the items from the designated bins, scans each product to confirm accuracy.
• Packing & Labelling: Staff pack items in branded boxes, include any promotional inserts you provide (coupons, thank-you notes) and print shipping labels with your chosen courier.
• Shipping Logistics: The 3PL negotiates discounted rates with carriers—DPD, Royal Mail, Hermes—based on volume. They choose the best option for each order. Parcels go out daily, and your system sends tracking information directly to customers.
• Returns & Reverse Logistics: A customer returns a candle. The 3PL inspects it, confirms it’s in new condition, updates stock levels, and either repacks it for resale or sets it aside if damaged.

Instead of juggling warehouses and courier contracts, you focus on designing new product lines, expanding marketing, and building customer loyalty. That 3PL becomes your logistics engine, running silently in the background.

Advantages of Third Party Logistics

Partnering with a 3PL brings practical benefits. Here’s how it can reshape your business:

How to Choose a Third Party Logistics Provider

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Finding the right 3PL takes more than a Google search. Here’s what to look for:

Service Offering & Specialisation

• Warehouse Locations: Identify where most of your customers live. A provider with fulfilment centres near major UK hubs—Birmingham, Manchester, London—will cut delivery times and shipping costs.
• Industry Expertise: If you sell perishable items, look for a 3PL with food-grade or pharmaceutical capability (temperature control, stock rotation). If you sell hazardous materials, ensure they hold ADR or IATA Dangerous Goods certifications.
• Technology Integration: Does the 3PL’s WMS integrate seamlessly with your platform (Shopify, Magento, WooCommerce)? Real-time inventory syncing is critical to avoid oversells.

Pricing Structure

• Transparent Fees: You want to see line items: storage fees (pallet or cubic metre), pick-and-pack fees (per order or per item), inbound receiving fees and returns fees. Avoid vague “handling charges” that can balloon as volume grows.
• Volume Discounts: If you expect rapid growth or seasonal spikes, negotiate tiered pricing. A 10-20% discount on large order runs can make a big difference once you hit, say, 5,000 orders per month.

Scalability & Flexibility

• Minimum Commitments: Some 3PLs insist on a £2,000 minimum monthly spend. If your volumes fall short, you still pay the minimum. Choose a provider with low minimums or a truly on-demand model if you’re uncertain of growth.
• Seasonal Surge Capacity: Confirm the provider can bring in extra staff or add temporary shifts around peak events—Black Friday, Christmas, Valentine’s Day—without sacrificing accuracy.

Reputation & Track Record

• Client References: Ask for real case studies from businesses similar to yours. Speak to those clients directly to learn about accuracy rates, responsiveness to issues and overall reliability.
• Performance Metrics: Look for published KPIs: order accuracy (95–99% is typical for strong providers), average order cycle time (24 hours or less), inventory shrinkage (under 2%) and on-time delivery percentage (ideally 98%+).

Geographic Reach

• Domestic versus International: If you plan to sell only within the UK, a single central warehouse may suffice. For EU expansion, you need a provider with warehouses in continental Europe and customs brokerage expertise.
• Cross-Dock Options: If you import goods from overseas, cross-dock facilities let inbound containers be broken down and re-shipped quickly, reducing storage time and improving cash flow.

Technology & Reporting

• User Portal & API: You need a portal that shows live inventory, order status, returns and key metrics. APIs should allow you to pull data automatically into your own dashboards or ERP.
• Custom Reports: If you want insight into SKU velocity, return reasons, pick times or carrier performance, verify that the 3PL can provide custom reports on demand.

Customer Service & Communication

• Dedicated Account Manager: A single point of contact who understands your business, monitors performance and proactively suggests improvements is invaluable.
• Issue Escalation: Ask how they handle delays, lost shipments or system outages. Service Level Agreements (SLAs) should outline response times and compensation for missed targets.

Facility & Security

• Warehouse Conditions: Is the facility temperature-controlled if you need it? Are there separate zones for different product types?
• Security Measures: CCTV, access control, cycle counts and cycle counting procedures (blind counts, physical inventories) reduce the risk of shrinkage.
• Insurance & Liability: Confirm that the 3PL’s insurance covers the full value of your inventory, including any peak-season spikes in stock value.
  
  

When you’ve shortlisted a few providers, schedule facility tours—either in person or virtually. Seeing operations firsthand reveals much more than any sales deck or brochure. Watch how staff pick orders, how packing stations are organised, and how quickly staff respond to exceptions. Those practical observations will help you gauge whether the provider is a good fit for your needs.

Interested? Check out our resource about fulfilment 3PL. 

Common Misconceptions About Third Party Logistics

Despite 3PL’s popularity, some myths linger. Let’s clear them up:

• “3PL Is Only for Big Companies.” Many providers cater to start-ups and SMEs. Flexible pricing means you can start with a single pallet or a few hundred orders per month. You don’t need multi-million pound volumes to qualify.
• “I’ll Lose Control Over My Brand.” You set packaging guidelines, quality standards and shipping rules. A good 3PL treats your brand as an extension of their own: they use your boxes, include your promotional inserts and follow your instructions on how to handle fragile items.
• “It’s Too Expensive.” If you factor in warehouse rent, full-time staff, equipment depreciation and software licences, in-house logistics can cost far more—especially at low volumes. 3PLs leverage scale to negotiate better carrier rates, which can translate into lower shipping costs for you.
• “Switching to a 3PL Is Disruptive.” Many providers have streamlined onboarding processes. They’ll run a pilot phase—processing a small batch of orders—to ensure accuracy. Once you’re confident, you shift your entire volume over. Most brands find the transition smoother than expected.
• “I Can Only Use One Warehouse.” You can spread inventory across multiple 3PL locations. Orders route automatically to the warehouse closest to the customer. That cuts transit times and costs, making “3PL near me” effectively “3PL everywhere my customers are.”

About Bezos

Alt text: The logo of Bezos. 

Bezos was founded to remove fulfilment headaches and give growing online retailers the freedom to focus on what really matters—building their brand and serving customers. Today, it offers customisable e-commerce logistics solutions across 16 countries (including the UK, Germany, the Netherlands and the US) through a network of 63 fulfilment centres.

Why Bezos Matters

• Rapid Onboarding: From the moment you create your account, the team works to get your products live in under a week. Once stock arrives at any Bezos facility, it’s live for sale within 48 hours—no prolonged waiting periods.
• Real-Time Visibility: Their bespoke Seller Portal syncs with over 30 sales channels (Shopify, WooCommerce, Amazon, eBay, Etsy, Wayfair and more). Inventory levels update automatically; order status and tracking details are available at a glance. Instead of wondering where a parcel is, you see exactly which warehouse it’s in and when it’s out for delivery.
• Dedicated Support: Every client gets a named account manager. You’ll never find yourself speaking to an anonymous helpdesk. Whether you have a last-minute promotional push, need to adjust pick-and-pack instructions or simply want advice on expanding into new territories, your account manager is there to coordinate with warehouses and carriers on your behalf.
• Cost Efficiencies: By pooling volumes across thousands of sellers, Bezos secures shipping rates that translate into savings of up to £1–£2 per order in the UK and as much as 80 percent off international freight. Over time, those savings add up—especially as you scale.
• Flexibility & Scale: Seasonal peaks require more staff, additional packing stations and extra storage. Instead of scrambling to hire and lease extra space, you tap into Bezos existing teams and facilities. When demand drops, you pay only for what you use. That agility means no more warehouse waste or idle labour costs.

Ready to Offload Fulfilment Headaches?

If you’re tired of juggling warehouse leases, packing staff and courier contracts, Bezos stands ready to welcome your brand. With deep e-commerce expertise, bespoke technology and a reputation for personal service, they handle logistics so you can focus on growing your business. Get a quote today! 

Conclusion

Outsourcing fulfilment lets you focus on growth instead of managing warehouses, staff and carriers. A 3PL provides flexible storage, faster delivery, expert handling and clear costs, adapting as your business scales. With 3PL logistics handled, you gain the time and resources to enhance products, marketing and customer service—turning fulfilment into a true advantage.

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Ready to simplify fulfilment and scale your business? Get a quote today!

FAQ

What is meant by 3rd party logistics?

Third-party logistics (3PL) means outsourcing warehousing, order picking, packing and shipping to an external specialist. Instead of running your own warehouse and delivery network, you send stock to a 3PL provider, and they handle storage, fulfilment and carrier relationships on your behalf.

What is 3PL with an example?

3PL stands for third-party logistics. For example, a British clothing brand might ship its garments to a warehouse in Birmingham run by a 3PL; when a customer orders online, the 3PL picks and packs the garments, attaches the labels and ships them out—freeing the brand to focus on design and marketing rather than day-to-day fulfilment.

How do I know if I need a 3PL?

If you’re spending excessive time or money on warehousing, staff shortages cause regular shipping delays, or you can’t scale fulfilment during peak seasons, a 3PL can help. When you’d rather focus on product development and marketing instead of juggling inventory, outsourcing to a specialist makes sense.

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