3PL (Third Party Logistics) is a cooperation model in which a business delegates its logistics tasks to a third party. A business that uses 3PL services frees itself from all logistics functions and outsources them. The 3PL operator undertakes the obligations of:
- storage of goods;
- compliance with delivery dates;
- packaging of orders;
- delivery of cargo to the destination point;
- preparation of shipping documents;
- cargo insurance;
3PL should not be confused with dropshipping. In dropshipping, the seller does not own the goods, and in 3PL, he simply passes the management of logistics to a third party. The principle behind 3PL is that a company, such as an online store, ships its goods to a third party. When the store receives the order, it hands it over to the logistics operator. The 3PL company begins processing and bundling the order, according to terms agreed upon in advance with the store. For example, it uses their branded packaging. After that, the operator sends the goods to the online store customers.
3PL greatly simplifies the work of the company, which uses this model. Businesses no longer have to worry about creating supply chains because others are handling that task. All the business focuses on is marketing and sales.