eCommerce

What is a 3PL? Types of 3PLs & differences between 3PL, 4PL and 5PL

Mariluz Sampalo

Mariluz Sampalo

Aug 1, 2022

3PL solutions help eCommerce businesses carry out supply chain tasks

Inside this article

  • iconWhat is a 3PL solution?
  • iconWhat are the four types of 3PL solutions?
  • iconSoftware for logistics
  • icon3PL, 4PL and 5PL: Understand the difference between them
  • iconConclusion
  • If you’re looking for an external logistics provider, chances are you’ll encounter the terms 3PL, 4PL and 5PL. This article will focus on the most common logistics companies nowadays, which are 3PL solutions.

    Let’s take a look at what exactly 3PL means, the different types of 3PL platforms and how they differ from other logistics providers like 4PLs and 5PLs.

    What is a 3PL solution?

    3PL stands for third-party logistics. The term is used to talk about outsourcing one or more activities included in the order fulfillment process. 3PL solutions will take over inventory management, warehousing, and fulfillment.

    3pl have an special impact on warehouse operations

    Generally speaking, a 3PL platform is used by an online store or any other business that needs to process a considerable number of orders to make their warehouse operations more efficient.

    3PLs use advanced tools and infrastructure to help businesses fulfill more orders.

    What are the four types of 3PL solutions?

    1. Standard 3PL Provider

    Standard 3PL providers can be used to pick and pack goods. Although quite simple in their functioning, their cost tends to be lower than custom-made solutions or other types of 3PL companies.

    2. 3PL Service Developers

    3PL service developers include more features than standard 3PL providers.

    The issue of managing goods in facilities such as warehouses is easier with 3PL service developers. However, if you want to take full control of warehouse activities, you’ll need a 3PL customer adapter or a 3PL customer developer.

    3. 3PL Customer Adapters

    3PL customer adapters are capable of completely managing all the warehouses and logistics of a company. The online store can therefore outsource all of its logistic operations and focus on other tasks, like the production of goods, sales analysis and forecast, marketing strategies or customer support.

    This solution is more expensive than the previous types of 3PLs, but it also provides more functionality. This has a clear impact on the time needed to process orders, which directly increases the profitability of the online store.

    4. 3PL Customer Developers

    3PL customer developers are the type of 3PL provider that covers the largest share of a company’s logistics.

    3PL customer developers can seem like a costly solution, but their ability to integrate with other software systems makes them an ideal option for big online stores and companies with relatively complex systems.

    They can monitor warehouses and logistics and provide regular and updated data to constantly improve business processes and performance.

    Software for logistics

    There are many software companies for logistics that can be used by an online store. However, if you’re still not ready to let go of the control that comes with processing your orders in-house, Outvio is the perfect software solution for your business.

    Outvio is the eCommerce infrastructure designed and created to give you control of all your post-checkout operations from order processing to shipping, tracking, customer service, returns and even remarketing strategies.

    Use it to streamline your warehouse operations, like the picking and packing of products; automate the selection of courier and shipping methods with Outvio’s smart rules; get notified every time a shipping issue affects one parcel and customize your tracking and return portals to provide a better shopping experience that not only saves you time and money but converts one-time purchases into repeat customers with cross-selling strategies.

    Sign up today and start using Outvio to take your post-checkout operations to the next level!

    3PL, 4PL and 5PL: Understand the difference between them

    3PLs

    3PLs are companies focused on providing physical help with the fulfillment and handling of products and online orders.

    3PLs are businesses that have technology, vehicles, tools and employees to process orders, pick and pack products and ship parcels, among other things related to logistics activities.

    4PLs

    While some 3PLs can also provide work as 4PL providers, 4PLs are typically understood as platforms that provide a software solution, rather than a service that physically processes orders for the online store.

    4PLs may not have vehicles or storage facilities themselves, but they can function as a consultant on how to improve operations to increase productivity and profitability.

    5PLs

    5PL providers take care of all the elements of the supply chain of an organization, regardless of the number of facilities they work with and other specifications that may apply to wider supply networks.

    5PLs plan, organize and implement logistics solutions, using technology to make an eCommerce business more efficient. The main difference between a 4PL and a 5PL is the scope of work they have, with 5PLs being a better fit for the largest eCommerce players.

    This infographic shows the difference between these and other logistics agents.

    difference between 1pl 2pl 3pl 4pl and 5 pl

    Conclusion

    3PL platforms are the perfect tool for online stores focused on growth since, by outsourcing certain tasks, companies can invest their time in other parts of the business, such as customer service, marketing campaigns or product development.

    Outvio can be fully integrated with your online store and your 3PL to give you full control over your warehouse and logistics operations. It can even take over some of the fundamentals of 3PLs, such as picking and packing.

    Connect Outvio to your 3PL and CMS and optimize your logistics activities today!