Inventory glossary

What is Third-party logistics?

Third-party logistics, often called 3PL, is a company you pay to store your inventory and handle picking, packing and shipping orders on your behalf.

If you use a 3PL, your inventory sits in their warehouse, not your own stockroom. This affects how fast you can react to a stockout, because you are relying on the 3PL to receive and process your incoming stock before it becomes sellable.

Small store owners should track the 3PL's own receiving and processing time separately from supplier lead time. If your supplier takes two weeks and the 3PL takes three more days to check stock in, your real order-by date needs to account for both.

Example

A candle store ships 300 orders a month. Instead of packing boxes themselves, they send 1,000 units to a 3PL warehouse. The 3PL stores the candles, picks and packs each order as it comes in, and ships it to the customer. The store pays the 3PL a storage fee plus a per-order pick and pack fee.

Common mistakes

  • Assuming a 3PL removes the need to track inventory levels and plan reorders yourself.
  • Not accounting for the 3PL's own receiving time when setting order-by dates with suppliers.
  • Underestimating storage and per-order fees when pricing products.

Third-party logistics and SteadyShelf

SteadyShelf does not manage 3PL operations like picking or shipping, but it can still forecast demand and time purchase orders to the 3PL warehouse based on your sales data and supplier lead times.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Receiving · Lead time · Multi-location inventory · Inbound shipment · Order fulfillment

Full inventory glossary

FAQ

Does SteadyShelf manage my 3PL warehouse?

No. SteadyShelf forecasts demand, tells you when to reorder, builds purchase orders and tracks receiving into Shopify. It does not manage warehouse operations, picking, packing or shipping to customers.

Can SteadyShelf still forecast reorders if I use a 3PL?

Yes, if your 3PL reports accurate stock levels back to Shopify, SteadyShelf can use that on hand data to forecast sales and time your next purchase order.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

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