Most Amazon sellers start with FBA. It makes sense. Amazon handles storage, packing, shipping, customer service, and Prime eligibility. You send inventory in. Amazon does the rest.
But somewhere along the way, FBA stops being the easy button.
Storage fees climb. Your oversize products get hit with long-term storage charges. Seasonal spikes force you to send inventory early or risk stockouts. You want to bundle products, but FBA won't do it. You need custom packaging for a retail partnership, but FBA ships everything in Amazon boxes.
That's when brands start looking at 3PL.
Third-party logistics providers handle fulfillment outside of Amazon's warehouses. They store your inventory, pick and pack orders, ship to customers, and in many cases, they can get you Seller Fulfilled Prime eligibility.
The question is not whether you need a 3PL. The question is which one.
I have seen brands save six figures a year by moving the right products to 3PL. I have also seen brands lose money, lose Prime status, and lose customer trust because they picked a 3PL that could not handle Amazon's speed requirements.
Your fulfillment partner is not just a warehouse. They are an extension of your brand. If they mess up, your customers blame you. If they are slow, your metrics tank. If they cannot scale with you, you are stuck scrambling during Q4.
Let me walk you through what 3PL actually means, when it makes sense, what to look for, and how to avoid the mistakes I have seen dozens of brands make.
What Is 3PL and Why Do Brands Use It?
Third-party logistics (3PL) means outsourcing your fulfillment to a company that specializes in warehousing, packing, and shipping. Instead of Amazon handling everything, a 3PL partner stores your products in their warehouse and ships orders as they come in.
For Amazon sellers, 3PL usually means Seller Fulfilled Prime (SFP) or Fulfilled by Merchant (FBM). You list the product as Prime-eligible or standard shipping, the customer orders, and your 3PL ships it directly to them.
Why would you do this instead of FBA?
A few reasons.
Cost control. FBA storage fees have climbed every year. Long-term storage fees hit hard if your inventory sits for more than 180 days. Oversize and heavy products get hit with fees that eat into margins. A good 3PL can store the same products for a fraction of the cost.
Flexibility. FBA does not do kitting. They do not do custom packaging. They do not let you bundle products that were not sent in as a bundle. If you need any of that, you need a 3PL.
Multi-channel fulfillment. If you sell on Amazon, Shopify, Walmart, TikTok Shop, and wholesale, you need one place to store everything. A 3PL can fulfill orders across all channels from the same inventory pool. FBA only handles Amazon orders unless you pay extra for Multi-Channel Fulfillment, which is expensive and slow.
Seasonal scaling. Q4 crushes most brands. FBA has receiving limits. If you need to send in a container in October, you might not get it received until November. A 3PL with space can take it all in, prep it, and ship it fast.
Control. With FBA, Amazon controls your inventory. If they lose it, damage it, or destroy it without your permission, you file a claim and hope. With a 3PL, you have direct contact. You can visit the warehouse. You know where your stuff is.
I am not saying FBA is bad. For most products, FBA is the best option. Fast shipping, easy Prime eligibility, higher conversion rates. But for certain products, certain brands, and certain growth stages, 3PL is the smarter move.
FBA Limitations That Drive Brands to 3PL
Let me be specific. Here are the situations where FBA stops making sense.
Storage fees on slow movers. If you have a product that sells 10 units a month but you need to keep 200 units in stock for wholesale orders or backup inventory, FBA will charge you monthly storage plus long-term storage fees after 180 days. I have seen brands pay $4,000 a month in storage fees on inventory that generated $6,000 in revenue. The margins disappear.
A 3PL charges a flat monthly rate per pallet or per cubic foot. Predictable. Lower. No surprise fees.
Oversize and heavy products. FBA fees on oversize items are brutal. If your product is over 20 pounds or over 18 inches in any dimension, you are paying premium fees for storage and fulfillment. I worked with a furniture brand that was paying $15 per unit in FBA fees. We moved them to 3PL and cut fulfillment costs to $6 per unit. Same Prime eligibility. Same delivery speed.
Kitting and bundling. Amazon does not let you create bundles inside FBA unless you send them in as pre-bundled units. If you want to test a new bundle, you have to create it before sending it in. If it does not sell, you are stuck with it.
A 3PL can assemble bundles on demand. You send in individual products, and they kit them as orders come in. This is huge for testing gift sets, subscription boxes, or seasonal bundles.
Custom packaging. FBA ships everything in Amazon boxes. If you have a retail partnership, a corporate gifting program, or a DTC brand where unboxing matters, FBA will not work. A 3PL can do custom inserts, branded boxes, handwritten notes, whatever you need.
Seasonal spikes. Q4 is chaos for FBA. Receiving delays. Storage limits. Stockouts. If you need to send in a massive restock in September or October, FBA might not take it. A 3PL with capacity can receive it all, prep it, and ship it the same week.
Multi-channel brands. If you are running Shopify, Amazon, Walmart, and TikTok Shop, FBA only handles Amazon. You either need separate inventory for each channel (expensive and risky) or you use a 3PL that integrates with all of them.
What to Look for in an Amazon 3PL Partner
Not all 3PLs are built the same. Some are great at B2B wholesale fulfillment but terrible at Amazon's speed requirements. Some are cheap but slow. Some are fast but cannot scale.
Here is what matters.
Seller Fulfilled Prime (SFP) eligibility. If you want Prime on your listings without using FBA, your 3PL needs to be SFP-approved. That means they can consistently hit Amazon's delivery speed and on-time performance requirements. Not all 3PLs can do this. Ask for proof. Check their SFP approval status. If they are not approved, you lose Prime, and your conversion rate drops.
Location. Speed is everything. If your 3PL is on the West Coast and most of your customers are on the East Coast, you will miss two-day delivery windows. Look for central US locations. Kansas City, Dallas, Chicago. These let you reach 90% of the US in two days via ground shipping.
Marknology's warehouse is in Kansas City. We can hit both coasts in two days. That is why we can do SFP without expensive air shipping.
Integration with your tools. Your 3PL should integrate with Seller Central, Shopify, ShipStation, and whatever else you use. If they are manually entering orders, you will have errors. Automation matters.
Kitting and custom packaging capabilities. If you need bundling, custom inserts, or branded packaging, make sure they can do it. Some 3PLs only do basic pick-and-pack. Ask for examples.
Transparent pricing. 3PL pricing can be confusing. Receiving fees, storage fees, pick fees, pack fees, shipping fees, kitting fees. Get a full breakdown. Compare it to your current FBA costs on a per-unit basis. Factor in the value of flexibility and control.
Scalability. If you are doing 100 orders a day now but expect 500 orders a day in Q4, make sure they have the space and staff to handle it. Some 3PLs max out at 200 orders a day and cannot scale past that.
Communication. You should be able to text, call, or email your 3PL contact and get a response the same day. If they are slow to respond during onboarding, they will be slow when you have an urgent issue.
Marknology's 20,000 Sq Ft Kansas City Warehouse
We built our warehouse because we got tired of seeing clients get burned by 3PLs that could not keep up with Amazon's requirements.
We have 20,000 square feet in Kansas City. Central US location. Two-day ground shipping to most of the country. Seller Fulfilled Prime approved.
We handle everything from receiving containers to kitting bundles to shipping DTC and Amazon orders from the same inventory pool.
Here is what that looks like in practice.
A supplement brand we work with was paying $18,000 a month in FBA fees. Oversize bottles. Slow movers. High storage costs. We moved half their catalog to our warehouse, kept their top sellers in FBA, and cut their monthly fulfillment costs to $11,000. Same Prime eligibility on the products we fulfill. Faster restocking. More control.
Another client needed custom gift sets for a corporate partnership. FBA would not do it. We kitted the sets in our warehouse, shipped them with branded inserts and custom boxes, and the client landed a $200,000 contract.
We also handle DTC orders for brands that sell on Shopify and Amazon. One inventory pool. Orders route automatically based on where they come from. No duplicate inventory. No manual work.
That is what a 3PL should do. Remove friction. Save money. Let you focus on growing the business instead of managing logistics.
Seller Fulfilled Prime Through 3PL
Seller Fulfilled Prime (SFP) is one of the most underrated tools on Amazon. It lets you keep Prime eligibility without sending inventory to FBA.
The requirements are strict. You need to ship 99% of orders on time. You need to deliver within two days for Prime customers. You need to use tracked shipping. If you drop below the thresholds, Amazon revokes your SFP status.
Most sellers cannot do this on their own. Packing and shipping 50 orders a day with two-day delivery is doable. Packing and shipping 200 orders a day is not. That is where a 3PL comes in.
A good 3PL can hit SFP requirements consistently. They have the systems, the staff, and the shipping discounts to make it work. You get Prime eligibility without FBA fees.
The cost comparison is significant. FBA charges fulfillment fees per unit plus storage fees. SFP through a 3PL charges pick, pack, and shipping fees, but storage is cheaper and you avoid long-term storage penalties.
For products over two pounds, SFP is almost always cheaper than FBA. For oversize products, it is not even close.
The catch is that you need a 3PL that can actually do it. Many 3PLs claim they can handle SFP but fail when volume increases. Ask for references. Check their on-time performance metrics. Make sure they have backup carriers in case one fails.
Cost Comparison: FBA vs 3PL for Different Product Types
Let me break down the math.
Small, fast-moving products (under 1 pound, 100+ sales per month): FBA usually wins. The fulfillment fees are low, storage is manageable, and Prime conversion is high. Unless you are doing multi-channel fulfillment, stick with FBA.
Medium products (1-5 pounds, 20-100 sales per month): This is where it gets competitive. FBA fees range from $4 to $7 per unit depending on size. 3PL fees range from $3 to $5 per unit. Add in storage savings and 3PL often wins, especially if you need kitting or custom packaging.
Oversize and heavy products (over 5 pounds or over 18 inches): 3PL wins. FBA charges $9 to $15+ per unit for oversize fulfillment. A 3PL can do it for $5 to $8. Storage fees are also 3x lower.
Slow-moving products (under 20 sales per month): 3PL wins. FBA storage fees accumulate. Long-term storage fees hit after 180 days. A 3PL charges flat monthly storage, so slow movers do not kill your margins.
Multi-channel products (selling on Amazon, Shopify, Walmart, etc.): 3PL wins. FBA Multi-Channel Fulfillment is expensive and slow. A 3PL can fulfill from one inventory pool across all channels.
The best strategy for most brands is hybrid. Keep your top 20% of SKUs in FBA for maximum conversion. Move oversize, slow movers, and multi-channel products to 3PL. This gives you the best of both worlds.
DTC + Amazon Under One Roof
One of the biggest advantages of a 3PL is multi-channel fulfillment.
If you are running a Shopify store and an Amazon store, you probably have inventory split between FBA and your DTC warehouse. That means you are carrying duplicate inventory. If you run low on Amazon, you cannot easily shift stock from Shopify. If you run low on Shopify, you cannot pull from FBA without paying extra fees.
A 3PL solves this. One inventory pool. Orders from Amazon, Shopify, Walmart, TikTok Shop, or wholesale all pull from the same stock. This reduces the amount of inventory you need to carry, lowers stockout risk, and simplifies forecasting.
We do this for multiple clients. They send inventory to our warehouse. We integrate with Seller Central and Shopify. Orders route automatically. Amazon orders ship with SFP. Shopify orders ship with branded packaging. Same inventory. No duplicate stock.
This also opens up retail and wholesale opportunities. If a retailer wants to place a 500-unit order, you can fulfill it from the same warehouse without disrupting your Amazon or DTC sales.
Kitting, Bundling, and Custom Packaging Capabilities
Amazon does not do kitting. If you want to create a bundle, you have to assemble it before sending it to FBA. If the bundle does not sell, you are stuck with it. If you want to test five different bundle variations, you need to create and send in all five.
A 3PL can kit on demand. You send in individual products. As orders come in, the 3PL assembles the bundle and ships it. This is huge for testing, seasonal promotions, and subscription boxes.
We do this for a skincare brand. They sell individual serums on Amazon and Shopify. During Q4, they offer a holiday gift set with three serums, a branded box, and a handwritten card. We assemble these as orders come in. No upfront kitting costs. No wasted inventory if the bundle does not sell.
Custom packaging is the other big advantage. FBA ships everything in Amazon boxes. If you are building a DTC brand, that unboxing experience matters. If you have a retail partnership, they do not want Amazon branding on the box.
A 3PL can do branded boxes, tissue paper, inserts, thank-you cards, whatever you need. It costs more per unit, but for high-ticket products or corporate gifting, it is worth it.
FAQ
Is 3PL cheaper than FBA?
It depends on the product. For oversize, heavy, or slow-moving products, 3PL is almost always cheaper. For small, fast-moving items, FBA is often cheaper. The best strategy is hybrid: FBA for top sellers, 3PL for the rest.
Can I still get Prime with 3PL?
Yes, if your 3PL is Seller Fulfilled Prime (SFP) approved. SFP lets you offer Prime shipping without using FBA. The requirements are strict, so make sure your 3PL can consistently hit Amazon's delivery and performance standards.
How much does 3PL cost?
Pricing varies by 3PL. Expect to pay $3 to $8 per order for pick, pack, and shipping, plus monthly storage fees (usually $10 to $50 per pallet or $0.50 to $1.50 per cubic foot). Get a full breakdown and compare it to your current FBA costs.
Can a 3PL handle multi-channel fulfillment?
Yes. A good 3PL integrates with Amazon, Shopify, Walmart, TikTok Shop, and other platforms. This lets you fulfill orders from one inventory pool instead of splitting stock across multiple warehouses.
What if my 3PL messes up?
Your 3PL is an extension of your brand. If they ship late, damage products, or lose inventory, it affects your metrics and customer trust. Vet your 3PL carefully. Ask for references. Start with a small test before moving all your inventory.
Do I need to visit the 3PL warehouse?
Not required, but recommended. Seeing the warehouse in person gives you confidence that they can handle your products and volume. It also builds a relationship with the team, which matters when you have urgent requests.
Your fulfillment partner is not just a warehouse. They are part of your operation. If they are slow, your business slows down. If they cannot scale, you hit a ceiling. If they mess up, your customers leave reviews blaming you.
Pick the right partner. Vet them hard. Start small. Scale when you trust them.
And if you are tired of FBA fees eating into your margins, maybe it is time to look at a 3PL that actually understands Amazon.
Ready to grow your Amazon business?
Marknology has managed over $2 billion in Amazon revenue for 300+ brands since 2015. See what we do or get in touch.