3PL (Third-Party Logistics)
Definition
An outside company that stores your inventory and picks, packs and ships your orders for you. You pay for storage, receiving, each order shipped and often a monthly minimum.
Want a deeper explanation?
A 3PL lets you grow without signing a warehouse lease or hiring a shipping team. The trade-off is that your fulfillment cost becomes a list of small fees: receiving, storage, picks, packaging, kitting and returns, and they add up fast.
For your books, 3PL invoices should be split so outbound fulfillment sits in selling costs and inbound receiving can be part of landed cost. Watch for: invoices booked as one lump "warehouse" expense, which hides your true cost per order.
Example
A brand moving from its garage to a 3PL pays $0.75 per pallet per day for storage, $3.10 to pick and pack each order, plus shipping. At 2,000 orders a month that is about $6,200 in pick-and-pack alone.