Glossary
3PL
Also called: Third-party logistics
A 3PL is a company that stores your stock and ships your orders, so you do not run a warehouse yourself.
You send them pallets. They send your customers parcels.
What they take on
- Receiving your deliveries and putting them away
- Holding the stock
- Picking, packing and shipping each order
- Returns, usually for a fee per parcel
Most connect to Shopify directly, so orders flow out and tracking flows back without anyone rekeying anything.
When it makes sense
When packing orders is eating days you should spend buying and selling. Somewhere north of a hundred orders a day is the usual crossover for a small team, though a bulky product moves that line a long way down.
It also makes sense when you need next-day shipping and cannot staff it.
Where it goes wrong
You lose the ability to walk to the shelf. When a count looks wrong, you can no longer go and look, so your stock accuracy is now their accuracy, reported back to you at whatever interval they choose.
Ask before you sign: how often do they cycle count, what happens when a delivery arrives without an advance shipping notice, and who pays when a pick list sends the wrong size. The answers vary far more than the price does.
Related terms
Putaway
Putaway is moving stock from the receiving area onto the shelf it will be picked from, and recording where it went.
Pick list
A pick list is the sheet or screen that tells someone which products to collect for an order, and where each one is.
Stock accuracy
Stock accuracy is how often the number on screen matches the number on the shelf, counted line by line rather than in total.