Whether you’re launching a new business or looking to optimize existing operations, third party logistics (3PL) providers offer significant benefits for handling your order fulfillment.
These logistics partners manage the entire supply chain process—receiving inventory, storing products, picking orders, packing boxes, and shipping to customers—freeing you to focus on your core competencies and growing your business.
By partnering with a third party logistics company, you avoid massive capital investments in warehousing, sidestep complex logistics challenges, and leverage established expertise that would take years to develop internally.
This strategic business strategy allows you to direct more resources toward product development, marketing, and sales—the core business functions that drive revenue growth.
TL;DR:
When to consider outsourcing to a 3PL
While 3PLs aren’t the right solution for every business that ships products, they provide significant benefits for most. Here are the key situations when partnering with a 3PL makes strategic sense for your business:
Your operations costs are strangling growth – 3PL providers eliminate fixed warehouse expenses, slash equipment costs, and reduce labor overhead while maintaining or improving customer satisfaction.
You’re trying to scale quickly – Multiple warehouses, international transportation expertise, and flexible resource allocation help you expand geographically or handle increasing demand without massive capital investment.
You have specialty products – 3PLs offer specialized logistics services like kitting, temperature-controlled storage, or custom handling for products with unique requirements.
You’re stretched too thin – Established third party logistics processes fill gaps when you lack proper technology, personnel, or equipment.
You sell through multiple channels – 3PL warehouse management systems coordinate inventory and fulfill orders across many sales channels, preventing stockouts and reducing shipping costs.
Why trust this guide?
For this guide, we consulted five supply chain management professionals with decades of logistics expertise:
Tony Runyan, Chief Client Officer at Red Stag Fulfillment
Ryan Marine, Director of Sales at Red Stag Fulfillment
Justin Loftis, Director of Client Success at Red Stag Fulfillment
Tyler Sellers, Director of Operations at Red Stag Fulfillment
Donovan Sullivan, Operations Manager at NFI
Together, we’ll explain the benefits of a 3PL, including the costs you stand to incur vs. save, how to make the most of your 3PL relationship, and address common concerns about outsourcing logistics.
The financial impact: How 3PLs transform your bottom line
According to a 2024 survey, 90% of Fortune 500 companies use 3PLs for supply chain management, with most citing cost savings as their primary reason for outsourcing logistics functions. Our analysis reveals where these savings come from and how substantial they can be.
READ MORE: How much does it actually cost to outsource to a 3PL? Our 3PL cost guide helps you answer that question.
Eliminate 6-figure warehouse startup costs
When outsourcing logistics to a 3PL, you avoid heavy expenditures on infrastructure that would otherwise require significant capital investment.
Our experts have a lot to say about infrastructure costs.
Warehousing infrastructure is expensive. Would you rather invest in fulfillment operations when specialized companies already have, or allocate that capital toward product development, marketing, and sales?
Justin Loftis
Director of Client Success
Red Stag Fulfillment
Warehouses are expensive. Here in Salt Lake City, $0.70 per square foot is a cheap rate. But if you need a 100,000-square-foot warehouse, you’re spending $70,000 every month to rent a warehouse.
Tyler Sellers
Director of Operations
Red Stag Fulfillment
Here’s what you avoid paying for:
Warehouse lease: $0.40 – $3.00 monthly per square foot per month
Racking systems: $20–$50 per square foot of racked area
Forklifts: $25,000–$50,000 each (new), or $10,000–$25,000 (used)
Packing stations: $500–$3,000+ per station
Conveyor belts: $5,000–$50,000+
Computers: $800–$2,000 per unit
Warehouse Management System (WMS): $2,000–$100,000+ (one-time) or $1,000–$10,000+ monthly
Enterprise Resource Planning (ERP): $10,000–$500,000+ (one-time) or $1,000–$50,000+ monthly
Warehouse lease costs vary based on your monthly order volume and storage requirements. Below are estimated costs for different operation sizes to help you gauge potential expenses.
*These figures represent approximate ranges. Your actual space needs will depend on product dimensions and specific fulfillment requirements.
100 orders per day: 3,500 sq ft = $1.4k – $10.5k per month
1,000 orders per day: 25,000 sq ft = $10k – $75k per month
10,000 orders per day: 350,000 sq ft = $140k – $1.05m per month
20,000 orders per day: 750,000 sq ft = $300k – $2.25m per month
Beyond these initial costs, you also sidestep ongoing expenses like:
Warehouse maintenance and repairs
Equipment insurance
Equipment maintenance
Equipment depreciation
Technology upgrades and support
Convert fixed costs to flexible expenses
With a 3PL, infrastructure costs become variable instead of fixed, meaning you only pay for warehouse space and resources you actually use:
Simply having a warehouse is a huge fixed cost. Using a 3PL converts large amounts of fixed costs to variable costs, which ties your costs more closely to your fulfillment volumes.
Donovan Sullivan
Operations Manager
NFI
This variable cost structure creates several key advantages:
You pay only for the storage space you actually use
Your costs scale down during slow periods
You avoid the “too big/too small” warehouse dilemma
You eliminate the risk of expensive unused capacity
Tony Runyan, Chief Client Officer at Red Stag Fulfillment, adds helpful context:
With your own warehouse, you pay for the entire space regardless of how much you use. If it’s too big, you waste money. If it’s too small, you face the cost of securing additional space. A 3PL lets you pay only for what you use and scale as needed.
Tony Runyan
Chief Client Officer
Red Stag Fulfillment
Access volume-based economies of scale
By distributing fixed costs (facility, equipment, management) across multiple clients, 3PLs achieve economies of scale that individual businesses can’t match. These savings translate to:
Lower per-order processing costs
Reduced packaging expenses through bulk purchasing
More efficient use of labor and equipment resources
Better carrier rates due to combined shipping volume
While all these benefits are valuable, the carrier rate advantage is particularly impactful for your bottom line. Let’s explore these shipping cost reductions in more detail.
Reduce shipping rates
3PLs secure significantly better shipping rates than most businesses can negotiate independently. These savings come from:
Carrier volume discounts: By consolidating shipments from multiple clients, 3PLs ship thousands of packages daily with carriers like UPS, FedEx, and DHL, qualifying for preferential pricing tiers that individual businesses rarely achieve.
Zone skipping: With multiple warehouse locations, 3PLs can ship from the facility closest to your customer, reducing both shipping costs and delivery times. This strategic positioning substantially cuts transportation costs compared to shipping everything from a single location.
Dimensional weight optimization: 3PLs use specialized software to determine the most cost-effective packaging for each order, avoiding the common and expensive mistake of using oversized boxes that trigger dimensional weight surcharges.
Negotiated accessorial fees: Additional shipping services like residential delivery, Saturday delivery, and signature requirements typically cost less through a 3PL’s pre-negotiated rates.
For businesses shipping hundreds or thousands of orders monthly, these cost advantages substantially offset 3PL fulfillment services fees.
Example: Red Stag is one of the few 3PLs that specializes in big, heavy, and bulky fulfillment. Part of that specialization lies in the deep shipping discounts we’ve negotiated on AHS, dimensional weight, and oversized fees that normally destroy margins on large or heavy products.
Eliminate specialized labor costs and headaches
Building an in-house logistics team—even a basic one—requires significant investment in recruiting, training, and retaining qualified personnel:
Warehouse/Operations Manager: $60,000-$90,000+ annually
Shift Supervisors: $40,000-$55,000 annually
Warehouse Associates: $15-$20/hour ($31,200-$41,600 annually)
Seasonal/Temporary Staff: $15-$18/hour plus agency fees
Add in employment taxes (7-10% of wages) and benefits (15-25% of wages), and you’ve got a substantial labor investment on your hands.
But it’s not just salary you need to worry about.
According to 2022 data from the Society for Human Resource Management, the total cost to hire a new employee can be 3-4 times their salary. For a warehouse manager with a $60,000 salary, recruitment and training could cost $180,000 or more. And as Sellers points out, there’s often a lag time between when you hire someone and when you start getting real results out of them, which raises the cost of hiring efficient employees even higher.
It’s not just someone’s salary. A good manager takes at least six months to train to be an effective leader.
Tyler Sellers
Director of Operations
Red Stag Fulfillment
Sellers also highlights expenses related to warehouse worker turnover:
Warehouse labor has a higher average turnover rate compared to other work. You have to weigh the cost of attracting, onboarding, and retaining the people on the floor who will be doing the actual picking and packing.
Tyler Sellers
Director of Operations
Red Stag Fulfillment
Beyond these visible costs, hiring your own warehouse workforce comes with a bunch of additional costs:
Basic warehouse training: $500–$2,000 per employee
Forklift certification: $100–$500 per employee
HR expenses and staff healthcare
Liability insurance
Customer service training
Employee management systems
With a 3PL partnership, these labor challenges become the provider’s responsibility. You gain access to a trained workforce that scales with your needs without the overhead of employment costs or management complexity.
Prevent costly inventory mistakes and losses
Logistics errors like missed delivery windows, inventory mispicks, or damaged products during handling drain resources. A high-quality 3PL with established expertise minimizes these expensive errors.
Inventory shrinkage (lost or damaged inventory) is a common problem at many 3PLs. Average industry shrinkage rates of 1-3% may seem small, but for a business with $1 million in inventory, that’s $10,000-$30,000 in lost product annually.
Quality 3PLs dramatically reduce these losses through:
Implemented inventory tracking systems that prevent misplacement
Professional handling procedures that reduce damage
Security measures that prevent theft
Regular audits that identify and address issues quickly
WARNING: Most 3PLs build shrinkage allowances into their contracts, essentially making inventory loss your problem, not theirs. Red Stag guarantees zero shrinkage—if your inventory is lost or damaged in our care, we’re financially accountable for it.
Stop wasting resources on fulfillment technology
Enterprise-grade fulfillment technology costs hundreds of thousands of dollars to implement and maintain. Partnering with a 3PL gives you access to these systems without the capital investment:
Warehouse Management Systems (WMS)
Order Management Systems (OMS)
Shipping rate optimization software
Transportation management systems
Warehouse management software
Inventory forecasting tools
Barcode scanning and RFID technology
Business intelligence and analytics platforms
These advanced technologies deliver concrete benefits:
Real-time visibility across locations in the entire supply chain
Automated order routing to optimal fulfillment centers
Intelligent picking paths that reduce labor costs
Carrier selection algorithms that minimize transportation costs
Predictive analytics that prevent stockouts and optimize inventory levels
Accelerate growth without the growing pains
The true power of 3PL partnerships extends beyond cost savings to removing logistics barriers that typically constrain business expansion.
Your business might need to scale rapidly due to seasonal demand spikes, new product launches, or expanding market reach. In each scenario, logistics infrastructure typically becomes the limiting factor—unless you have a strategic 3PL partner.
Handle demand fluctuations without the infrastructure burden
3PLs can easily adjust to seasonal spikes, promotional surges, or sudden market changes. This flexibility helps you navigate fluctuations in demand without investing in permanent infrastructure.
If you run a seasonal business but can’t employ someone year-round to run fulfillment, you can use a 3PL as needed throughout the year.
Ryan Marine
Director of Sales
Red Stag Fulfillment
Operational benefits include:
Capacity that expands during peak seasons without fixed costs
No idle resources during slow periods
Ability to launch flash sales or promotions without overwhelming your operations
Protection against unexpected demand surges that could otherwise lead to order fulfillment failures
EXAMPLE: The 2020 pandemic highlighted how much a 3PL can help with fluctuating demand. Many businesses relied on their third party logistics partners to swiftly reroute goods and find additional capacity as supply chain conditions changed.
Strategic market entry advantages
Working with a third party logistics provider dramatically improves your ability to successfully enter new markets:
Faster market penetration: Instead of spending months setting up local operations, you can begin shipping to new regions immediately, capturing market presence before competitors.
Reduced capital requirements: By leveraging a 3PL’s existing infrastructure, you avoid the substantial upfront investment typically required for geographic expansion.
Lower risk testing: With flexible, variable costs instead of fixed infrastructure investments, you can test new markets with minimal financial exposure. If a market doesn’t perform as expected, you can easily adjust your strategy without being locked into long-term commitments.
Local market knowledge: Established 3PLs understand regional delivery expectations and customer demands, helping you adapt your fulfillment approach to meet local expectations.
At Red Stag Fulfillment, we’ve seen this firsthand. When a long-term client suddenly needed to expand West Coast operations, our Salt Lake City team added over 150,000 square feet of purpose-built space in just four weeks—much faster and more cost-effectively than it would have taken the client to lease their own building, purchase equipment, hire people, and get operations off the ground.
Cross-border shipping advantages
Shipping internationally creates a minefield of customs regulations, import taxes, documentation requirements, and carrier restrictions that devastate unprepared businesses.
Some 3PLs—especially global operations—can help with international shipping requirements in the following ways:
Carrier network breadth: 3PLs maintain relationships with multiple international and regional carriers, allowing them to select the optimal transportation routes for each destination. This carrier diversity helps optimize for both cost and delivery speed.
Documentation expertise: International shipments require precise documentation to clear customs efficiently. A 3PL with cross-border experience knows exactly which documents are needed for each country and how to prepare them correctly.
Regulatory guidance: Shipping regulations vary dramatically between countries and change frequently. Your 3PL can guide you through the complex web of international transportation procedures, including:
Required documentation for each country
Product-specific import restrictions
Tax and duty implications
Packaging and labeling requirements
Carrier-specific guidelines
PRO TIP: While not all 3PLs handle customs directly, quality providers will connect you with trusted customs brokers who specialize in cross-border compliance.
Focus your mental energy on growing your business
One immediate but often overlooked benefit of using a 3PL is reclaiming the mental bandwidth currently consumed by logistics fire-fighting. Sellers makes the tradeoff clear:
In-house fulfillment often takes you away from what you’re good at—selling the product. Most business owners are good at creating, marketing, and selling products. It’s rare for an entrepreneur to be able to run and scale a fulfillment operation without putting sales at risk.
Tyler Sellers
Director of Operations
Red Stag Fulfillment
By outsourcing logistics functions to specialists, you:
Eliminate constant warehouse management distractions
Stop worrying about staffing and training issues
Free yourself from shipping carrier negotiations
Reduce stress from customer service escalations related to shipping
Redirect your focus to core competencies like product development, marketing, and sales
This mental shift alone can dramatically accelerate growth by allowing leadership to concentrate on strategic initiatives instead of operational headaches.
Achieve operational efficiency you can’t match in-house
As Sullivan explains, 3PLs have supply chain processes in place to maximize their own operational efficiency, which directly benefits you:
As with any business, 3PL providers are inherently motivated to be as efficient as possible. This allows them to fulfill more orders at a lower cost, and it gives you the benefit of shorter fulfillment times.
Donovan Sullivan
Operations Manager
NFI
3PLs pass these operational efficiencies to clients through multiple channels:
Access specialized logistics professionals
3PLs employ professional logistics teams that focus exclusively on fulfillment operations. Unlike businesses where employees juggle multiple responsibilities, 3PL staff work within established chain processes specifically designed for efficient order fulfillment. As Runyan puts it:
People get degrees and specializations specifically to do logistics. If you want to run an efficient warehouse, you’re either going to have to hire an expert or become one yourself.
Tony Runyan
Chief Client Officer
Red Stag Fulfillment
When you partner with a 3PL, you gain several key workforce advantages:
Established training programs: 3PLs have refined their onboarding and training processes to quickly bring workers up to speed and maintain quality standards.
Experienced management: Supervisors and managers who have handled thousands of orders across multiple clients bring valuable expertise to your fulfillment.
Cross-trained workforce: Workers can be deployed flexibly across different logistics functions as needed.
Unlike building an in-house team from scratch, a 3PL provides immediate access to a workforce already trained in efficient fulfillment processes. You avoid the learning curve, management challenges, and fixed overhead of maintaining your own fulfillment staff.
Benefit from purpose-built warehouse design
3PLs design their facilities specifically for efficient order fulfillment:
Strategic inventory placement with fast-moving items in easily accessible locations
Zoned picking areas that minimize travel time
Purpose-built packing stations equipped with right-sized packaging materials
Dedicated areas for specialized services like kitting or custom packaging
This specialized design dramatically reduces the time required to process each order compared to improvised warehouse spaces.
Leverage continuous process improvement
3PLs constantly refine their logistics operations based on performance data and industry developments:
Regular analysis of fulfillment metrics to identify bottlenecks
Implementation of best practices across all client accounts
Standardized procedures that evolve based on results
Adaptation to seasonal demands and market changes
These efficiency improvements would require significant in-house logistics expertise to develop independently.
Access enterprise-grade technology
3PLs deploy logistics technologies that many businesses can’t justify purchasing independently. These systems deliver tangible benefits:
Real-time visibility: Access enterprise-grade systems showing exact inventory levels by SKU and location, order status updates in real-time, shipping confirmation with tracking links, and historical performance data for forecasting.
Seamless integration: Rather than building custom connections between your shopping cart and warehouse, 3PLs offer pre-built integrations with major marketplaces and platforms like Shopify, Amazon, and TikTok Shop. Orders flow automatically without manual data entry.
Automated decision-making: 3PL systems make sophisticated fulfillment decisions without human intervention—selecting optimal shipping carriers, choosing efficient pick paths, identifying the right warehouse location, and flagging potential inventory issues.
Data-driven inventory management: Enterprise WMS platforms track crucial metrics like inventory turnover rates, storage location efficiency, seasonal demand patterns, order processing times, and error rates.
This technology transforms into actionable insights for reducing costs and improving customer satisfaction—insights most businesses lack without specialized systems.
Access specialized capabilities without building them yourself
Not all products can be treated the same way. Your unique inventory might require special handling, storage conditions, or preparation before shipping to customers.
Handle complex products with specialized expertise
As Sullivan explains, certain product types demand specialized expertise:
If your product is highly specialized or requires specialized storage/handling, you may want to consider restricting your search to a 3PL that has the expertise for your goods. Items that are especially heavy, bulky, fragile, or sensitive to temperature and humidity may all necessitate working with experts in that kind of product.
Donovan Sullivan
Operations Manager
NFI
Without specialized handling, you risk damaged inventory, unhappy customers, regulatory violations, and wasted resources. A 3PL with experience in your product category already has the equipment, facilities, training, and processes in place to handle your specific challenges.
Deliver high-value specialized services
Today’s complex ecommerce operations require more than basic warehousing. Specialized fulfillment services help you manage unique product requirements, meet marketplace demands, and create better customer experiences without building these capabilities yourself.
Ecommerce fulfillment expertise
Modern ecommerce demands specialized fulfillment capabilities beyond basic pick-pack-ship operations. Leading 3PLs have developed technical expertise and operational systems that transform fulfillment from a cost center into a strategic asset.
Here are just a few of the fulfillment superpowers that leading 3PLs can bring to your business:
High SKU management: Ecommerce businesses often carry hundreds or thousands of different products (SKUs). Specialized 3PLs have systems designed to accurately track and manage extensive product catalogs without confusion or errors.
Direct system integration: Advanced 3PLs offer seamless connections between your ecommerce platform and their warehouse management system (WMS). When a customer places an order on your website, it automatically flows to the 3PL’s system for immediate processing—no manual order entry required.
Batch fulfillment optimization: For high-volume ecommerce operations, 3PLs can group similar orders together for more efficient picking and packing, reducing costs while maintaining speed.
Large and heavy product fulfillment: Oversized items require specialized equipment, trained staff, and custom shipping solutions. 3PLs (like Red Stag Fulfillment) that specialize in big, heavy, and bulky fulfillment invest in heavy-duty racking, forklifts, pallet jacks, and carrier relationships specifically for large items.
Marketplace fulfillment support
Selling through Amazon and other marketplaces comes with strict requirements that can be challenging to navigate:
Amazon FBA Prep: If you use Fulfillment by Amazon alongside direct sales channels, a 3PL can prepare your inventory according to Amazon’s exacting standards—proper labeling, packaging, bundling, and shipment preparation. This preparation prevents rejections, delays, and penalty fees.
Seller Fulfilled Prime (SFP): For businesses wanting to maintain inventory control while still offering Prime benefits to customers, a 3PL can help you meet Amazon’s rigorous SFP requirements for fast shipping and high accuracy.
Fulfilled by Merchant (FBM): When you handle your own Amazon fulfillment, a 3PL can ensure you maintain the performance metrics necessary to protect your seller account status.
Product customization services
Many products require special preparation before they’re ready for customers:
Kitting: Combining multiple individual items into a single packaged unit enhances the customer experience and increases perceived value. A specialized 3PL can assemble these kits efficiently at scale.
Bundling: Creating promotional product combinations or subscription boxes requires careful coordination. 3PLs with bundling expertise ensure all components are correctly included in each shipment.
Light assembly: Some products need final assembly before shipping. From furniture to electronics, 3PLs can handle these tasks to ensure customers receive ready-to-use items.
Custom packaging: Branded unboxing experiences create lasting impressions. The right 3PL can implement custom packaging solutions that elevate your brand while protecting your products.
Simplify omnichannel and marketplace fulfillment
An omnichannel sales strategy creates inventory management complexities that most businesses struggle to handle internally:
Marketplace compliance: Each marketplace (Amazon, Walmart, etc.) has specific packaging, labeling, and shipping requirements. 3PLs with marketplace expertise ensure your shipments meet these standards.
Inventory synchronization: A quality 3PL’s systems maintain accurate inventory across all sales channels to prevent overselling and stockouts.
Channel-specific packaging: Different sales channels often require different packaging approaches. 3PLs can implement these varying requirements within a single fulfillment operation.
Minimize business risk
Supply chains inherently involve operational risks—from regulatory compliance issues to natural disasters affecting operations. A professional 3PL absorbs and manages many of these risks.
Reduce risk through comprehensive protection
A professional 3PL acts as a protective buffer, absorbing and managing many common supply chain risks that would otherwise fall directly on your business:
Regulatory compliance expertise
Staying compliant with constantly changing regulations is a full-time job in itself. 3PLs employ experts who dedicate their careers to understanding and implementing regulatory requirements across multiple areas:
Transportation regulations (DOT, FMCSA, etc.)
International trade laws and tariff schedules
FDA requirements for food, supplements, and medical products
OSHA workplace safety standards
Environmental regulations
Import/export documentation
By leveraging a 3PL’s compliance expertise, you significantly reduce your exposure to non-compliance penalties, shipment seizures, customs delays, and expensive legal issues.
Comprehensive contingency planning
When disruptions occur—and they will—3PLs have established backup plans ready to deploy:
Multiple carrier relationships provide alternatives when primary shipping routes are compromised
Distributed warehouse networks offer redundancy if one location is affected by weather or other disasters
Established protocols for handling supply chain disruptions minimize downtime
Experience managing through previous disruptions creates institutional knowledge that benefits all clients
During events like the 2020 pandemic, companies with 3PL partnerships generally weathered the supply chain chaos better than those handling logistics internally, as 3PLs could quickly pivot to alternative solutions when primary options failed.
Quality assurance systems
Well-established 3PLs implement rigorous quality control processes that reduce error rates and protect your inventory:
Many follow ISO 9001 or other quality management standards
Systematic approaches to inventory handling minimize damage and loss
Regular audits and performance tracking identify and address issues before they escalate
Staff training programs ensure consistent adherence to quality procedures
These quality assurance systems translate directly into fewer mistakes, less inventory damage, and higher customer satisfaction for your business.
Contractual risk management
A formal 3PL agreement provides contractual protection that you wouldn’t have when handling logistics internally:
Service level agreements (SLAs) establish clear performance expectations
Defined liability terms clarify who is responsible when things go wrong
Insurance requirements ensure adequate coverage for your inventory
Specific remedies for non-performance give you recourse if service falls short
While these contractual protections may seem like a minor benefit, they become invaluable when problems occur. Having clearly defined responsibilities and remedies can mean the difference between a minor hiccup and a major financial loss for your business.
Meet complex retailer requirements without the headaches
When distributing to big box retailers like Target or Home Depot, you must follow detailed requirements for:
Product labeling and barcoding
Packaging specifications (box dimensions, material types, etc.)
Shipping documentation
Delivery timeframes and appointment scheduling
EDI (Electronic Data Interchange) integration
Pallet configuration and shipping container requirements
RFID tagging (for certain retailers)
Product information management
Violations of these requirements can result in chargebacks (financial penalties), refused shipments, or even account suspensions that can devastate your business overnight.
A quality 3PL helps you navigate these complex challenges through:
Specialized knowledge: 3PLs work with multiple clients across various platforms and retailers, giving them detailed knowledge of each marketplace’s unique requirements.
Established processes: They have tested systems in place specifically designed to meet the compliance standards of major retailers and marketplaces.
Relationship leverage: When issues arise, 3PLs can tap into their established relationships with retailer representatives to resolve problems faster than you could independently.
Accurate documentation: 3PLs ensure all paperwork, labeling, and electronic communications meet the exact specifications required by each retailer or marketplace.
Technology integration: Many 3PLs offer direct integration with marketplace platforms to ensure order information flows seamlessly and all requirements are met.
Build a more sustainable supply chain
Environmental sustainability has become increasingly important for businesses of all sizes. Consumers, investors, and regulatory bodies are demanding more eco-friendly practices throughout the entire supply chain. However, implementing sustainable logistics operations requires significant investment, specialized knowledge, and infrastructure changes.
A 3PL partnership allows you to enhance your environmental credentials without the substantial capital investment typically required:
Resource optimization and sharing
A 3PL partnership allows you to decrease your environmental footprint without the substantial capital investment typically required. By sharing resources across multiple clients, 3PLs create efficiency that individual businesses can’t achieve alone:
Shared transportation: By consolidating shipments from multiple clients, 3PLs maximize truck capacity utilization, reducing the total number of vehicles on the road. This shared model can substantially reduce carbon emissions.
Optimized routes: Advanced routing technology minimizes fuel consumption and emissions by plotting the most efficient delivery paths.
Energy-efficient facilities: Many 3PLs have already invested in facilities with energy-efficient lighting, heating, and cooling systems, solar panels, and water conservation measures.
Waste reduction: Professional 3PLs implement systematic recycling programs and packaging optimization to reduce landfill waste.
Advanced sustainable practices
Beyond basic resource sharing, leading 3PLs invest in innovative sustainability technologies and programs that would be cost-prohibitive for most individual businesses. These advanced practices help you meet increasingly strict environmental standards:
Right-sized packaging: 3PLs use dimensional weight technology and packaging expertise to reduce material waste and shipping costs simultaneously.
Reusable shipping materials: Some 3PLs have implemented reusable shipping containers and packaging recovery programs that would be difficult for individual businesses to manage.
Alternative fuels: Leading 3PLs are transitioning to electric vehicles or alternative fuel fleets—a significant investment that few individual companies can afford.
Carbon offset programs: Many 3PLs participate in carbon offset initiatives to counterbalance emissions, offering this benefit to their clients.
Building your sustainable brand image
Beyond the operational benefits, a partnership with a sustainability-focused 3PL can enhance your brand reputation:
Green certifications: Many 3PLs maintain industry certifications like ISO 14001 (environmental management), SmartWay Transport Partnership, or LEED certifications for their facilities. Your business can leverage these credentials in your sustainability reporting.
Quantifiable results: Professional 3PLs can provide detailed data on emissions reductions, recycling rates, and other sustainability metrics that you can share with environmentally conscious customers and investors.
Continuous improvement: As sustainability technologies advance, 3PLs typically adopt these innovations faster than individual businesses, keeping your supply chain at the cutting edge of environmental practices.
When selecting a 3PL, inquire about their sustainability initiatives and how these can be integrated into your own environmental strategy. The right partner won’t just help you meet current sustainability expectations—they’ll position you to exceed them as environmental standards continue to evolve.
When a 3PL might not be right for you
Despite the compelling benefits outlined above, outsourcing logistics isn’t always the optimal solution for every business. Transparent evaluation of your specific situation is essential.
Early-stage businesses with simple products
Many startups and early-stage businesses find that their order volume is too low to justify 3PL costs or meet minimum requirements:
Most 3PL providers have monthly minimums for orders, storage space, or total fees
At low volumes, the per-order cost of a 3PL may be significantly higher than handling fulfillment yourself
The infrastructure investment might not make financial sense until you reach a certain scale
You shouldn’t use a 3PL if your product is super simple to pack out. If it’s a single SKU and it ships in its manufacturer’s packaging, you likely don’t need a 3PL.
Tyler Sellers
Director of Operations
Red Stag Fulfillment
If you’re shipping a small number of straightforward products that don’t require special handling, in-house fulfillment might be more cost-effective until your volume increases.
Products requiring unusual handling or control
Some businesses need a level of operational control that standard 3PL relationships don’t typically provide:
Products requiring specialized handling that most 3PLs don’t offer
Highly regulated products with compliance requirements beyond standard 3PL capabilities
Custom manufacturing or assembly that happens immediately before shipping
Government or institutional contracts with unique fulfillment specifications
In these cases, you might need to maintain in-house logistics operations—at least for these specialized aspects of your business.
When customer interaction is your core differentiator
For some businesses, the fulfillment process represents a critical touchpoint with customers:
Your brand experience heavily depends on personalized packing and presentation
You want staff who handle your products to have deep product knowledge for quality control
You rely on direct communication about orders, exchanges, and returns to build customer relationships
The unboxing experience requires handwritten notes or highly customized elements
If these elements are fundamental to your business model and competitive advantage, you might hesitate to outsource this customer touchpoint.
When should you consider a hybrid approach?
Sometimes, the best solution isn’t all-or-nothing. Consider these hybrid approaches:
Partial outsourcing: Keep fulfillment of your core products in-house while outsourcing seasonal items or promotions to a 3PL
Geographic division: Handle fulfillment locally while partnering with a 3PL for orders outside your region
Channel separation: Manage direct-to-consumer fulfillment yourself while using a 3PL for marketplace or wholesale orders
PRO TIP: If you sell specialized products that require unique handling, don’t rule out 3PLs entirely. Instead, focus your search on specialized providers that cater to your specific product type.
You can start your search with our list of the best 3PL companies, which has a variety of 3PLs suited for different product types.
Finding the right 3PL partner
Maximizing the benefits outlined in this guide requires selecting the right third party logistics 3PL for your specific needs. When evaluating potential partners, prioritize these critical aspects:
Specialization: Choose a 3PL with proven experience handling products similar to yours. Generic 3PLs often struggle with specialized requirements.
Error rate: Verify their track record with concrete metrics. High order accuracy and ensuring timely order fulfillment rates are essential.
Technology: Their systems should integrate seamlessly with yours for operational continuity and provide the supply chain visibility you need.
Service: Evaluate their communication. If they’re slow to respond during the sales process, expect worse service later.
Location: Strategically placed warehouses reduce costs and allow 3PLs to efficiently deliver to your customers.
Service level guarantees: Look for a 3PL that stands behind their promises with financial guarantees, not just verbal assurances.
We’ve actually seen a few clients leave and come back. They say, ‘Wow, we did this to save money, but then we went somewhere else and it hurt us.
Justin Loftis
Director of Client Success
Red Stag Fulfillment
Remember that the cheapest 3PL isn’t necessarily the best. While cost savings matter, they must be balanced against service quality and reliability.
READ MORE: Don’t pick the wrong 3PL. Our guide to choosing a 3PL covers the critical selection criteria that protect your business from costly mistakes.
Transform your logistics from a liability into a competitive advantage
The right 3PL partnership doesn’t just reduce costs and headaches—it transforms your entire supply chain operations into a strategic advantage that accelerates growth.
Red Stag Fulfillment guarantees 100% order accuracy and 0% inventory shrinkage. Our specialized logistics services for heavy, bulky, and high-value products have helped hundreds of companies overcome logistics challenges that were restricting their growth.
However, we recognize we’re not the ideal fit for everyone. If we determine we’re not the right match, we’ll help refer you to a party logistics provider better suited to your needs.
Are logistics problems holding your business back? Let’s talk about how we can help you overcome these complex challenges and enable business growth. Our fulfillment experts will analyze your specific needs and provide transparent guidance—even if that means recommending a different solution.
Ready to start a conversation? Contact our team today.
