Handling logistics in-house can give some businesses a competitive edge. However, as operations scale, the process becomes more complex, time-consuming and costly. In-house logistics requires significant capital investments, including labor, facility maintenance, hardware, software, facility insurance and more. Further, operational costs can rise unpredictably, causing financial strain when sales fluctuate.
Industry-leading 3PL providers have the expertise, infrastructure and technology investments to manage logistics. Consider outsourcing to the right 3PL provider to gain a competitive advantage and deliver better business outcomes.
Is in-house fulfillment always the best option?
Although many businesses start with in-house fulfillment, outsourcing to a 3PL can ensure consistent pick, pack and shipping costs, even during demand shifts. Companies struggling with seasonal demand fluctuations, workforce management, high inventory holding costs or market expansion may find that partnering with a 3PL offers greater flexibility and cost savings.
Here are some key indicators that it’s time to outsource:- rising operational expenses
- warehouse space limitations
- difficulty meeting customer expectations for fast, accurate deliveries.
As a general rule, unless your brand offers exceptional supply chain and logistics management and optimization abilities, partnering with a 3PL is a wise choice when your business shows signs of consistent growth and expansion.
Comparing in-house fulfillment & 3PL outsourcing
| Challenge |
In-house fulfillment | Benefits of 3PL outsourcing |
| Inventory storage |
It requires significant capital investment and long-term leasing commitments. Brands often start with 30-40% warehouse utilization, leading to inefficiencies and wasted costs. Balancing growth potential with space efficiency is a constant challenge. |
A 3PL provides flexible, scalable storage, allowing brands to adjust space based on demand. It can help businesses avoid long-term lease risks and eliminate the cost burden of underutilized warehouse space. |
| Cost allocation |
Brands often underestimate hidden costs, including warehouse internet, utilities, software and supplies (tape, labels, void fill, carrier pickups). Payroll and employee-related costs (benefits, worker’s comp, taxes) are significant financial burdens. |
3PL providers bundle logistics costs, offering a clear, predictable pricing structure. Brands can benefit from included supplies, technology and operational expertise, reducing overhead and administrative workload. |
| Equipment & technology |
It requires purchasing expensive warehouse equipment, such as racking, forklifts, tape machines, packing stations, scales and shipping software. |
A 3PL already has the necessary infrastructure and technology in place, eliminating upfront equipment investments. Brands gain access to this technology without capital expenditure. |
| Retaining staff |
Hiring and retaining reliable warehouse staff is challenging, especially in tight labor markets. Training employees whilst managing other aspects of the business can increase stress and operational complexity. |
3PLs hire, train and manage fulfillment staff, ensuring access to experienced and trained teams. This is especially true and valuable when demand fluctuates during peak season. |
| Picking, packing & shipping |
Requires internal order processing, payment verification and fulfillment management. Brands must optimize inventory picking and packing to avoid delays and errors. |
A 3PL streamlines order fulfillment using advanced warehouse management systems (WMS) to improve order accuracy and speed. |
| Customization |
Differentiating the unboxing experience is essential for brand loyalty. Brands managing their own fulfillment must design and execute unique packaging strategies that stand out from generic marketplace shipments (like Amazon). |
A 3PL can provide branded packaging, kitting and custom inserts, improving the customer experience. |
| Tracking & inventory management |
It may involve manual stock monitoring to avoid overstocking or stockouts, leading to lost sales and increased costs. |
3PLs, like Cart.com, use proprietary real-time inventory tracking and automated reordering systems to ensure optimal stock levels. |
| Returns processing |
Handling reverse logistics in-house can be resource-intensive, requiring dedicated staff for inspection, restocking and refunds. |
A 3PL can manage returns more efficiently, helping ensure faster processing, lower costs and improved customer satisfaction. |
3PLs improve logistics efficiency
Working with an expert 3PL has many benefits, including:
- Optimize your operations and improve logistics efficiency
- Receive expert customer service
- Access fulfillment warehouse networks, tools, technology
- Years of experience
The right provider can help you easily scale without the challenges of maintaining physical infrastructure, retaining and training staff, purchasing, updating and supporting technology. Further, it can improve delivery speed, reduce fulfillment errors and provide access to more cost-effective shipping rates.
However, partnering with a 3PL provider does come with a degree of risk, and we will discuss the potential challenges of outsourcing below.
Potential challenges of outsourcing
While a 3PL provider can help you take your business to the next level, not all providers are created equal. Here are common challenges when outsourcing to a 3PL that isn’t the right fit for your business:
- Limited or inadequate customer service
- Communication lapses
- Reduced visibility into operations and billing
- Hidden fees and charges
- Loss of inventory
- Data security
- Damage to brand reputation
The right 3PL provider for your business can face challenges head-on and address them swiftly. Before choosing a provider at random, you’ll want to be sure that they can provide excellent customer service and support teams, upfront pricing structures, government-grade security, and full visibility and control over warehouse, inventory and shipping management systems.
Partner with Cart.com
Cart.com is a leader in the industry, providing logistics solutions that enable B2C and B2B companies to dominate omnichannel commerce, from product discovery to order delivery. When you partner with Cart, you’ll gain access to our nationwide fulfillment network, advanced, proprietary management systems and teams of qualified experts who are invested in you and your customers’ success.
Whether your company is experiencing rapid growth, expanding into new markets or simply seeking ways to optimize logistics operations, outsourcing to Cart is a strategic move that can drive long-term success.
Is outsourcing to a 3PL the right choice for your business or brand? Contact Cart.com today. We’ll answer any questions you have and provide additional insights into solving common logistical challenges, enabling you to scale with growth confidently.
Subscribe to our emails for the latest industry insights!
By entering your email, you agree to receive marketing emails from Cart.com
