A third-party logistics provider (3PL) runs the warehouse and outbound fulfillment for a brand that owns the inventory but doesn’t operate the building itself. The action sequence: receive inbound freight, put it away, store it, ingest orders from the storefront, pick the units, pack the parcel, generate the carrier label, hand it off, and process returns on the way back. DTC brands typically engage a 3PL once in-house fulfillment stops penciling out — directionally a few thousand orders per month, though the threshold tracks SKU count, SKU velocity, and local labor cost rather than a fixed number.
A 3PL is not the storefront (Shopify, BigCommerce, Amazon’s seller-side cart) and not the carrier (UPS, USPS, FedEx, DHL); it sits between them. Fulfillment-by-Amazon is structurally a 3PL but locked to Amazon’s sales channel; brands using FBA inventory to fulfill non-Amazon orders are on the Multi-Channel Fulfillment variant. Dropshipping is not a 3PL relationship at all: the supplier holds and ships the goods, so there’s no brand-owned inventory to warehouse.
A 3PL invoice combines storage (per pallet, bin, or cubic foot per month), inbound receiving, a pick fee per unit, a pack fee per order, outbound shipping at the 3PL’s negotiated carrier rate, and surcharges for kitting, custom packaging, oversized units, and returns processing. The common operator mistake is comparing providers on pick-and-pack alone; storage, inbound, surcharges, and the carrier rate routinely dominate the all-in cost per order. Model the full per-order load against your actual SKU mix before signing.