What is 3PL logistics, and when does a seller need one?
A third-party logistics provider holds your stock and runs the operation around every order — receiving, storage, confirmation, pick and pack, delivery or collection, cash on delivery and returns. This page covers the scope, the commercial model and the point at which self-fulfilment stops paying.
Published 2023-06-14 · Reviewed 2026-08-31
The short definition
Third-party logistics (3PL) is an arrangement where an external operator holds your inventory and executes fulfilment on your behalf. You keep the storefront, the pricing, the catalogue and the customer relationship. The provider keeps the stock, prepares the orders, moves them, collects the money where payment happens at delivery, and takes the returns back in. It is an operating relationship governed by a service schedule, not a per-parcel transport purchase.
What sits with the provider, and what stays with you
Most disputes in a fulfilment relationship come from an unstated boundary. This is where the line normally falls.
The 3PL handles
- Receiving and counting stock into the warehouse
- Storage of your inventory, confirmed by product type and volume
- Order confirmation with the buyer before dispatch
- Pick, pack and quality check against the order
- Dispatch to door delivery or to a collection point
- Cash on delivery collection and reconciliation against your order list
- Failed attempts, uncollected parcels and returns intake
- Reporting you can trace from a payout line back to a parcel
You keep
- Buying and importing your stock
- Customs clearance — MFT is not a freight forwarder and receives goods after clearance
- Your pricing, marketing and customer acquisition
- Your refund, exchange and cancellation policy
- Your storefront, catalogue and order data
A 3PL is not a courier service
Courier work is one leg of fulfilment. Buying the leg and calling it fulfilment is what leaves cash on delivery unreconciled.
- A courier moves a parcel
- It collects from wherever you keep stock and delivers to an address. It does not hold your inventory, does not confirm the order with the buyer beforehand, and does not reconcile cash back to your order list.
- A 3PL runs the operation around the parcel
- Stock sits with the provider, orders are released and picked from that stock, confirmation happens before dispatch, and the money and the returns come back through the same record.
- Why the distinction matters in COD markets
- When most orders are paid at the door, the cost of a failed delivery is yours. Confirmation before dispatch, attempt handling and daily reconciliation are the controls that decide whether COD is profitable — and none of them are courier functions.
What a 3PL actually charges for
Activity-based, not a single flat fee. Which lines apply to you, and at what rate, is confirmed in your service schedule.
| Charge line | What it covers |
|---|---|
| Receiving | Charged on intake of a delivery of stock into the warehouse. |
| Storage | Charged for holding inventory, where storage is offered for your product type and volume. |
| Pick and pack | Charged per order prepared, with packaging treated separately where it applies. |
| Confirmation | Pre-dispatch contact with the buyer, where the corridor supports it. |
| Delivery or collection | Charged per parcel, by destination corridor and service type. |
| COD collection | Charged on collected value or per collected order, agreed commercially. |
| Returns | Charged on intake and inspection of refused, uncollected or returned parcels. |
Rates are quoted against your product type, destinations and monthly volume. See the cost estimator on the pricing page to model a shape before you request a quote.
Signals you have outgrown self-fulfilment
- You are entering a market where you have no warehouse, staff or rider relationships
- Most of your orders are cash on delivery and reconciliation is eating your week
- Volume swings enough that fixed warehouse cost is a risk rather than an efficiency
- You want to sell into more than one city, or more than one country
- Failed deliveries and returns are happening but nobody owns the follow-up
- You need to launch faster than you could hire, lease and fit out a facility
What to have ready before onboarding
- A contracting entity and the person accountable for the account
- Product list with SKUs, quantities, declared values and any handling requirements
- Confirmation that stock has cleared customs and is ready for warehouse receipt
- Registrations or permits for regulated categories
- Selling prices and the COD amount per order
- Destination cities and a monthly order forecast
- Your returns, cancellation and exchange policy
- Settlement and beneficiary details
3PL logistics: common questions
Definitions and scope. The operational sequence is covered on the fulfilment process guide.
Tell us the products and the towns, and we will tell you what runs.
An operator comes back with the storage, delivery, COD and collection options available on your routes — and what still needs confirming.