Understanding Amazon’s role in logistics is crucial for ecommerce brands choosing fulfillment partners. With Amazon dominating both marketplace sales and logistics infrastructure, business leaders need clarity on whether Amazon functions as a third-party logistics provider and what that means for their operations.
Quick verdict: Amazon’s role in the 3PL world
Is Amazon a 3PL? Yes. Amazon functions as a 3PL because it offers third-party warehousing, inventory management, pick-pack-ship, and reverse logistics services for outside sellers through Fulfillment by Amazon (FBA) and Multi-Channel Fulfillment (MCF). However, Amazon also owns its marketplace, creating a unique 3PL model that differs from neutral providers.
NOTE: A third-party logistics provider (3PL) is a company that provides outsourced logistics services including warehousing, transportation, inventory management, and order fulfillment.
Does Amazon meet 3PL criteria?
According to the Council of Supply Chain Management Professionals, legitimate 3PLs must offer external companies these core services:
| 3PL Requirement | Amazon FBA/MCF | Details |
|---|---|---|
| Warehousing | ✅ Yes | 200+ fulfillment centers globally |
| Order Fulfillment | ✅ Yes | Complete pick, pack, ship operations |
| Inventory Management | ✅ Yes | Real-time tracking and reporting |
| Transportation | ✅ Yes | Extensive delivery network including Prime |
| Returns Processing | ✅ Yes | Comprehensive reverse logistics |
| Technology Integration | ✅ Yes | APIs and seller dashboard tools |
Amazon meets every requirement, making it a legitimate 3PL provider despite its unique marketplace integration.
Understanding Amazon’s logistics offerings
Amazon provides multiple logistics services that position it as a full-service 3PL, though with characteristics that differ from traditional providers.
Fulfillment by Amazon (FBA) is Amazon’s flagship service where sellers send inventory to Amazon warehouses. Amazon handles storage, picking, packing, shipping, and customer service. FBA inventory automatically qualifies for Prime benefits, giving sellers access to millions of Prime members expecting fast delivery.
Multi-Channel Fulfillment (MCF) extends Amazon’s capabilities beyond the marketplace. Sellers can use Amazon’s network to fulfill orders from their websites, eBay, Walmart, or any sales channel. MCF positions Amazon as a direct competitor to traditional 3PLs, though orders don’t receive Prime branding.
Supply Chain by Amazon and Amazon Warehousing & Distribution (AWD) provide upstream supply chain management. AWD offers bulk storage at lower costs than standard FBA, automatically replenishing FBA inventory when needed.
Amazon vs traditional 3PLs: side-by-side comparison
Understanding how Amazon compares to traditional providers helps you make informed decisions based on your specific constraints and priorities.
Cost structure differences
Amazon’s pricing includes storage fees, fulfillment fees, and various surcharges. Storage costs vary significantly by season, with peak period rates (October-December) often doubling or tripling standard fees. Amazon also adds surcharges for oversized items, peak season handling, and hazardous materials.
Traditional 3PLs typically offer more predictable pricing without seasonal fluctuations. Many provide bundled pricing that can be more cost-effective for certain volume levels, particularly for oversized or heavy items that trigger Amazon’s highest fees. Understanding 3PL pricing structures helps you compare total costs accurately rather than focusing solely on per-unit rates.
Speed and network reach
Amazon’s delivery network consistently outperforms most traditional 3PLs. With same-day and one-day delivery options in major markets, Amazon provides unmatched speed for marketplace orders. Prime eligibility also boosts product visibility in Amazon search results.
Traditional 3PLs may offer specialized services like white-glove delivery or installation that Amazon doesn’t provide, but rarely match Amazon’s speed for standard shipments.
Branding and customization control
Amazon’s standardized processes limit customization options. All packages use Amazon-branded materials unless you pay extra for blank packaging. Custom inserts, special packaging, or branded unboxing experiences aren’t available through standard FBA.
Traditional 3PLs typically offer extensive customization, allowing brands to maintain their identity throughout fulfillment. This includes custom packaging, branded materials, and specialized handling requirements that protect your customer relationships.
PRO TIP: If brand control matters more than speed, traditional 3PLs give you the flexibility Amazon doesn’t offer.
When to choose Amazon vs external 3PL
The decision depends on your business model, product characteristics, and growth strategy rather than abstract preferences. Learning how to choose a 3PL that aligns with your specific needs requires evaluating multiple factors beyond just cost and speed.
Choose Amazon as your primary 3PL if you:
Sell primarily on Amazon marketplace
Have products under 18″ x 14″ x 8″ and under 50 lbs
Can accept standardized packaging
Prioritize Prime eligibility and fast shipping
Want minimal operational complexity
Focus on B2C sales with high order frequency
Choose traditional 3PL providers if you:
Sell across multiple channels equally
Need custom packaging or specialized handling
Want predictable, transparent pricing year-round
Require direct access to your inventory
Sell oversized, heavy, or hazardous products
Focus on B2B or wholesale operations
For businesses shipping big and heavy products, traditional 3PLs often provide more cost-effective solutions and specialized handling capabilities that Amazon’s standard network cannot accommodate efficiently.
WARNING: Don’t choose based on initial setup ease alone. Consider long-term costs, brand control, and inventory access when your business scales.
Hybrid strategies: combining Amazon with traditional 3PLs
Many successful brands use hybrid approaches, leveraging Amazon for certain products while using traditional 3PLs for others. This strategy mitigates risks while maximizing benefits from both models.
Common hybrid use cases include using external 3PLs for oversized items that exceed Amazon’s limits, handling large wholesale orders through traditional providers while using FBA for individual consumer orders, and maintaining custom packaging for premium products through specialized 3PLs.
When implementing hybrid strategies, start with a 70/30 split favoring your primary sales channel, then adjust based on performance data. Analyze each SKU’s performance across channels, consider storage costs and turnover rates, and maintain safety stock across both systems.
Frequently asked questions
What’s the difference between FBA and a third-party 3PL?
FBA includes marketplace benefits like Prime eligibility but offers limited customization. Traditional 3PLs provide more flexibility and branding options but lack direct marketplace integration.
Can I use Amazon fulfillment for non-Amazon sales channels?
Yes, through Multi-Channel Fulfillment (MCF), though costs are higher than FBA rates and Prime benefits don’t apply to external channel orders.
Does Amazon allow custom packaging?
Limited options are available at additional cost. Most FBA shipments use standard Amazon packaging, though blank packaging is available for certain product categories.
What happens if Amazon limits my inventory?
Amazon can impose inventory limits during peak seasons or for certain products, potentially disrupting sales. Traditional 3PLs don’t impose similar restrictions on your inventory levels.
How do I transition from FBA to an external 3PL?
Plan transitions carefully, considering inventory timing and potential service disruptions. Create overlapping service periods to ensure continuity and communicate changes to customers proactively.
Making the right choice for your business
Amazon definitively operates as a 3PL, offering comprehensive logistics services that meet all industry criteria. However, its dual role as marketplace owner and logistics provider creates unique advantages and challenges compared to traditional providers.
The decision isn’t about finding the “best” option—it’s about matching your logistics strategy to your business constraints. Consider Amazon when marketplace presence and Prime benefits drive your growth. Evaluate traditional 3PLs when you need flexibility, custom branding, or specialized services. For many brands, a hybrid approach provides the best balance while mitigating risks from over-dependence on any single logistics partner.
Ready to explore your fulfillment options? Contact Red Stag Fulfillment to discover how we can support your growing business with reliable, scalable logistics solutions tailored to your specific needs.
