Operations: fulfilment, packaging & compliance
A third-party logistics provider is a warehouse that holds your inventory and ships it on your instruction. For an Amazon seller the question is never whether a 3PL is better than FBA, because they are built for different jobs. FBA is superb at sending one unit to one consumer with a Prime badge attached. It is poor at sending forty cases on a pallet to a distribution centre with a purchase order number and a scannable label on every carton.
The moment you take a wholesale order, you need somewhere that can do the second thing. This article covers when that moment arrives, what to require from a provider, and what it costs.
What a 3PL does that FBA does not
Four things, and every one of them shows up the first time a retailer orders from you.
Ships pallets. Case picking, pallet building, stretch wrapping, and booking freight on a truck rather than a parcel carrier. FBA's multi-channel service ships parcels; it is not a pallet operation.
Prints retail labels. Carton labels with the serialised container codes a retailer scans, pallet placards, and the retailer-specific label formats set out in their routing guide. These are unrelated to the labels an Amazon fulfilment centre uses.
Sends the paperwork. Advance shipping notices, bills of lading, packing lists formatted the way a distribution centre expects. A good provider does this as part of the shipment rather than as a separate project, which is covered from the retailer's side in asn advanced shipping notice.
Holds reserve stock. Bulk inventory that is not committed to a marketplace, that you can allocate to whichever channel needs it, and that is not accruing long-term storage charges under someone else's rules.
There is also a defensive reason. Inventory sitting only in a marketplace network is inventory you do not fully control, subject to that network's limits, fees and removal timelines. A brand whose entire stock position lives in one place has an operational concentration risk on top of the revenue concentration risk described in amazon only brand risks.
When you actually need one
Not on day one of wholesale. The sequence most brands follow is sensible.
The first few wholesale orders can ship from your garage, your office, or through the marketplace's own multi-channel fulfilment if the order is small and parcel-shaped. That works up to a point and the point is well defined: when an order needs a pallet, when a retailer sends you a routing guide, or when you are spending more than a few hours a week on fulfilment admin.
A useful trigger list. You have one account ordering monthly in cases. A retailer has asked for an ASN or given you a routing guide. You are paying long-term storage on slow-moving stock in a marketplace network. You need product in a format or a pack that the marketplace cannot produce, such as retail-ready cases or bundled sets. Or you are importing full containers and need somewhere to deconsolidate before deciding where the stock goes.
Any two of those together means the warehouse is overdue.
What to require from a provider
Ask these before price, because price is meaningless if the capability is missing.
Retail experience by name. Not "we do retail" but "we ship to these three retailers weekly". A provider who already sends pallets into the distribution centres you are targeting knows the routing guides and the deduction traps.
EDI or ASN capability. Whether they generate the message and the labels themselves, or expect you to. If they expect you to, you need your own service and the two must agree on the pack structure.
Marketplace replenishment. Can they prep and ship inbound shipments to your marketplace fulfilment centres, including the prep requirements: polybagging, suffocation warnings, case labels, expiry formats. This is what lets one warehouse feed both channels.
Lot and expiry tracking. Essential for food, supplements and cosmetics, and quietly useful for everyone, because lot codes are what let you trace diverted stock back to an account.
Kitting and assembly. Building bundles, gift sets and retail-ready displays. Wholesale and gifting orders frequently need this and marketplace fulfilment cannot do it.
A system you can see. Real-time inventory, order status and a way to push orders in without emailing a spreadsheet. If their answer to integration is an email address, factor in the hours.
What it costs, in the shapes it comes in
Pricing is unbundled, which makes comparison hard until you translate it into cost per order.
| Charge | Typical basis | What drives it |
|---|---|---|
| Receiving | Per pallet or per hour | How your inbound arrives |
| Storage | Per pallet per month | How fast you turn stock |
| Pick and pack | Per order plus per line | Order profile |
| Case pick | Per case | Wholesale volume |
| Labelling and kitting | Per unit or per hour | Retail requirements |
| Freight | Pass-through plus margin | Weight, lanes, carrier rates |
The trap is comparing a low pick fee against a high storage fee without knowing your own turn rate. Build a model with your actual numbers: how many pallets you hold, how many wholesale orders a month, average cases per order, and how much inbound you receive. Then ask two or three providers to quote against that model rather than against their own rate card.
A rough sense of scale for a brand shipping ten wholesale orders a month averaging twenty cases: receiving and storage on a handful of pallets, case picking, labelling and paperwork typically land somewhere in the low hundreds of dollars a month plus freight. Against wholesale orders worth several thousand dollars each, that is a small line. Against two orders a month it is not, which is the real argument for waiting until the volume is there.
Running FBA and a 3PL together
Most brands end up with the same architecture: bulk inventory at the 3PL, a working quantity in the marketplace network, and the 3PL replenishing it.
That has three advantages. You buy in full container or full production run quantities without worrying about marketplace storage limits. You decide channel allocation after the goods have landed rather than at the factory. And an unexpected wholesale order does not require pulling units out of a fulfilment centre, which is slow and expensive.
It has one real cost, which is double handling on marketplace units: they are received once at the 3PL and again at the fulfilment centre. That is usually cheaper than long-term storage and removal fees on a large position, but it is a genuine trade and worth modelling rather than assuming.
The middle option, using the marketplace's own multi-channel fulfilment to ship wholesale orders, is workable for small parcel-shaped orders and breaks down at pallet scale. The boundaries are covered in amazon multi channel fulfillment.
The cash-flow effect nobody mentions
Moving to a 3PL changes when you pay for things, and it changes it in the wrong direction for a brand already stretching into wholesale terms.
Marketplace fees come out of your payouts, so you never write a cheque. A 3PL invoices monthly and expects payment on terms, while your wholesale customers pay you at net thirty or later. So you are paying storage and handling on stock that has already shipped and not yet been paid for.
This is survivable and it is a real planning item. Model the gap before you sign, particularly if you are committing to minimum monthly volumes. The broader timing picture for a brand moving off fortnightly marketplace payouts is in amazon seller cash flow.
Choosing between them without wasting a quarter
Shortlist three providers, at most. One large national operator, one mid-sized regional one, and one that specialises in your category. The specialist often wins on the things that matter and loses on price.
Visit if you can, or ask for a video walkthrough of the floor. You learn more from seeing how they stage outbound pallets than from any capability document.
Ask for two references from brands of roughly your size, and ask those references one specific question: what happens when something goes wrong. Every warehouse makes mistakes. The difference is whether they find them, tell you, and fix them, or whether you discover them through a retailer deduction three weeks later.
Then start with one channel. Move your wholesale fulfilment first, keep the marketplace as it is, and only consolidate once the wholesale side has run cleanly for a quarter.
If you are still deciding whether wholesale volume justifies any of this, start by seeing who would stock the product: paste your Amazon listing into WholesalePilot and the preview shows the distributors and retail buyer types that plausibly carry your category.
Questions Amazon sellers ask about 3PLs
Can a 3PL send stock into FBA for me? Most can, and it is one of the main reasons to use one. Confirm they know the prep requirements for your category before you rely on it.
Will using a 3PL hurt my Prime badge? Your marketplace units still ship from the marketplace network, so nothing changes there. Fulfilling marketplace orders from a 3PL is a different arrangement with its own performance requirements.
Do I need one to ship to a distributor? Not for a first pallet, which a freight broker and a willing helper can handle. You need one when it becomes monthly and when labels and paperwork start being graded.
How long does onboarding take? A few weeks for a simple setup, longer where retailer connections and integrations are involved. Start it before you need it, not after the purchase order arrives.