What is a 3PL? A plain definition, what it does in a day, and what it costs.

A 3PL, short for third-party logistics company, is a business that keeps your inventory in its own warehouse and ships your customers' orders for you. It receives your stock, puts it on shelves, picks and packs each order as it arrives from your store or marketplace, hands the parcel to a carrier, and takes the returns back when they come. You keep the brand, the store and the customer, and the 3PL runs the warehouse.

What a 3PL does in a day

Picture one building with a dock at one end, racks through the middle and pack benches by the carrier door. Here are the jobs along that line, in the order a unit meets them.

1. 01Receiving is the first job. A truck drops your cartons at the dock, and the team counts them against your packing list and scans each unit onto a shelf. A SKU (stock keeping unit) is one product in one size and color, a bin is the shelf position it lives in, and scanning each unit into its bin as it's put away is called scan-to-stock.
2. 02Storage is the time your stock spends on those shelves, measured in space. A pallet is the wooden platform a forklift lifts, stacked with cartons, and a cubic foot is the room inside a box one foot on each side.
3. 03Picking is the walk to the right bin for the units on an order. The picker scans each unit against the order before it goes in the box, so a wrong size or shade stops the pick there.
4. 04Packing is choosing the carton or mailer, adding dunnage (the paper or air pillows that stop things moving) and any insert you've asked for, and printing the label. Your packing rules live in the WMS, the warehouse management system, the software that runs the building and talks to your store.
5. 05Shipping is the handoff to the carrier, the company that drives the parcel to your customer. The cutoff is the time of day an order has to be in to ship that day, and the SLA (service level agreement) is how many business days the 3PL commits to between the order arriving and the parcel leaving. Tracking then syncs back to your store.
6. 06Returns come back to the same dock. The team opens each parcel, grades it against your rules (sealed and sellable, opened, damaged), restocks what can sell again, sets the rest aside, and tells your store so the refund can go out.
7. 07Reporting is what you see from your desk: inventory by SKU, orders by status, SLA by day, what's coming back and why.

Many 3PLs add kitting (building bundles so they pick as one SKU), relabeling, Amazon FBA prep (labeling and packing stock to Amazon's inbound rules), wholesale orders to retailers and freight booking for inbound shipments, each usually a line of its own on the bill.

What a 3PL doesn't do

A 3PL doesn't make your product. The factory, or a co-packer that makes it under your label, does that, and the 3PL meets the goods at the dock. It doesn't run your store either: your theme, your prices, your marketing and your customer emails stay with you, and the 3PL sees an order only once it's paid.

A 3PL doesn't carry your freight across the ocean. Getting a container from a factory overseas to the warehouse is a freight forwarder's job, and getting a parcel from the dock to a doorstep is a carrier's. The stock on its shelves stays yours, counted by SKU, and it leaves with you if you leave. And it doesn't decide your rules for you: packing standards, a signature threshold on high-value orders, what happens to a returned item. You set those, and a good 3PL writes them into the WMS and follows them on every order.

How a 3PL is billed, with YNK's rates as the worked example

A 3PL bill is a short list of lines, and each line has a unit. Handling is the pick, pack and ship of one order, billed per order or per item. Storage is billed per cubic foot, per pallet position or per bin, by the month. Returns are billed per parcel received, receiving by the hour, packaging as it's used, and postage per shipment by carrier, service, weight and destination. Some 3PLs add a setup fee, a software fee or a peak surcharge on top, and our guide to 3PL pricing goes through every line and where the extras hide.

Here are our published rates. At YNK, handling is $3.00 per order for pick, pack and ship, one fee per order as the baseline however many units are in it. Storage is $0.65 per cubic foot per month on the space you use. Returns are $3.00 per parcel. Receiving is billed hourly, packaging and supplies as used, and special-project labor like relabeling is $35 an hour, only when you ask for it. Postage is billed semi-monthly per shipment, at extremely competitive carrier rates. There's no setup fee, the integrations and the dashboard are included, and there are no seasonal or peak surcharges on handling or storage. These are estimates, confirmed in your quote once we've seen your volume and what you ship.

Say you ship 1,000 orders a month, hold 400 cubic feet of stock and get 30 returns. Handling is 1,000 orders at $3.00, which is $3,000. Storage is 400 cubic feet at $0.65, which is $260. Returns are 30 parcels at $3.00, which is $90. That comes to $3,350 before postage, receiving hours and packaging, and it's the same number in December as in June: when Nominal, a jewelry brand we ship for, called a last-minute sale that brought in 10,000+ orders in one weekend, every order shipped within SLA at the rates in its agreement. The full rate card has every line.

3PL versus 4PL, fulfillment center, warehouse, freight forwarder, carrier and Amazon FBA

A fulfillment center is the building an ecommerce 3PL runs, laid out for picking single orders, so when someone says fulfillment center they almost always mean a 3PL. A plain warehouse stores pallets and ships cases out when you ask, with no pick and pack of individual orders, which suits wholesale stock or a reserve ahead of a season.

A 4PL, or fourth-party logistics provider, sits a level up. It manages your whole supply chain for you, choosing and overseeing the 3PLs, forwarders and carriers, and it usually owns no warehouse. You'd use one with several warehouses in several countries and nobody on your team to manage the vendors.

A freight forwarder moves goods between the factory and the warehouse: it books space on ships, planes and trucks, prepares the customs paperwork and delivers the shipment to the 3PL's dock. A carrier moves the parcel from that dock to your customer's door, which means the parcel networks like UPS, FedEx and USPS, and the freight lines for pallets.

Amazon FBA, Fulfillment by Amazon, is Amazon acting as the 3PL for your Amazon orders. You ship stock into Amazon's network and, as Amazon's FBA page puts it, Amazon stores, picks, packs, ships and delivers the products to customers and handles customer service and returns, and FBA products are eligible for free two-day shipping through Prime, as of October 2026. The same page lists the fee lines in the table below. FBA serves your Amazon listings, a 3PL ships every channel from one stock, and many brands run both, with the 3PL topping up FBA from the stock it holds.

Who should use a 3PL, and from what volume?

A 3PL starts to make sense the month the hands and the room stop being free. A founder packing a couple of hundred orders a month from a spare room is often cheaper than any 3PL, because the labor and the space cost nothing on paper. That changes the month you hire a packer, rent space for stock, keep two inventory counts by hand for two channels, or watch a sale turn into a backlog you dig out of for days.

We've sat on both sides of that table. YNK began as the in-house fulfillment of Veiled, the founders' own fashion brand, and Veiled still ships from this building, six pieces an order at a 99.995% order success rate. Our rate card works well from about 300 orders a month. Below that, run the comparison anyway, because the answer might still be in-house for now: in-house fulfillment versus a 3PL prices every line of shipping it yourself, your own hours and the error cost included, next to our rates.

How an engagement starts at YNK: intake, proposal, inbound, cutover

At most 3PLs the sequence is the same: you send data, they send a quote, you agree terms, you ship stock in, they map your catalog and connect your store, and on a day you choose, the cutover, orders start flowing to the new building.

1. 01Start with the 3PL intake, a form that takes about ten minutes and asks for your monthly orders by channel, your SKU list with sizes and weights, your packing and shipping rules, a rough inbound plan (when stock will arrive and how) and your last three months of shipments, so we can model your real order profile.
2. 02Someone from the team replies within one business day, and the proposal follows within five, with your exact rates on every line, the cutoff and SLA, the cutover plan and the terms, which are set per brand. We walk you through the agreement before you sign.
3. 03Send your inventory to 465 Mola Blvd, Dock 10, Elmwood Park, NJ 07407, one SKU per carton, with carton labels and a packing list. Receiving is scan-to-stock and billed by the hour, so a labeled inbound takes fewer hours than a mixed pallet with no packing list.
4. 04While the stock is on its way, we map your SKUs, shipping rules and packaging standards into ShipStation, the WMS the whole building runs on, and connect Shopify, Amazon and TikTok Shop, which draw on one inventory pool.
5. 05We test on real orders before anything points at our building, then you cut over on the day you picked, while your current 3PL keeps shipping until then. Most brands are live in under two weeks, and Found left its previous 3PL and was shipping from here in one weekend.
6. 06From the first day, orders in by 12pm ET ship the same business day, and later ones within one business day, or two to three in peak. Every unit is scanned against the order before it goes in the box, which is how pick and pack error stays under 0.3% across more than 1.2 million orders a year. You get an account manager, the dashboard we run our own brands on, and a weekly review of orders, SLA and inventory.

The building is in Elmwood Park, New Jersey, about 15 miles from Manhattan, with a team of 50+ people. The full picture is on the 3PL services page.

Questions founders ask about 3PLs