What is a 3PL?

Posted by Speed Commerce on November 9, 2020

A lot of companies call themselves a ‘3PL’ (third party logistics) provider, while others just called themselves a fulfillment company, and still others called themselves both. What’s the difference?

No matter what way you slice it, a true direct-to-consumer order fulfillment provider is definitely, absolutely NOT a 3PL. Here’s why:

What is a 3FL?

  • Receives products via containers (mass quantities shipped by road, rail, air, or sea)
  • Ships products via pallets, cartons, or cases
  • Uses warehouse technology to process mass quantity orders
  • Often has its own logistics arm to handle shipments from warehouse to the final destination
  • Typically handles product distribution (to retail stores) instead of product fulfillment (to end consumers)

What is an order fulfillment provider?

  • Receives products via cases or cartons by truck, which are then broken down in the warehouse
  • Ships parcels – individual packages, typically under 150 lbs to end consumers
  • Uses warehouse technology to process ‘eaches’ (individual SKUs or items)
  • Works with regional and parcel carriers to deliver direct to the customer’s doorstep

Can a 3PL perform direct-to-consumer fulfillment? Many say they can – but keep in mind it’s not their specialty. To be honest, we’ve heard from our clients and others in the industry, 3PLs really struggle with individual order fulfillment.

When your technology isn’t designed to handle individual orders, your warehouses aren’t set up to quickly pick and pack at a product level, and your operations aren’t skilled at the nuances of B2C customer service, how can you adequately provide efficiency and attention to detail that direct-to-consumer fulfillment requires? Simply put: you can’t.

This industry confusion (or fibbing, whatever you want to call it) is making online retailers confused, too. We receive RFPs from retailers all the time who say they are searching for a “3PL”, but after reading through the requirements, we quickly realize that all they need is an outsourced fulfillment partner.

Many traditional 3PLs will try to woo an uncertain merchant with shiny things phrases like “multiple distribution channels”, “EDI shipping”, and “freight solutions”, but the bottom line is: if you want a cost-effective, efficient, customized experience from your operations partner AND want your end customers to have the same, an order fulfillment provider is what you need!

If your business needs help with fulfillment of direct-to-consumer orders, Speed Commerce is a full-service outsourced fulfillment provider you can count on.

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