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Researching third-party vendors is always a challenge—let alone for a service as complicated as fulfillment. Each company uses different measures of success, pricing models, and selling points, which makes it difficult to make a true apples-to-apples comparison for the top 3PL companies.
To make the process easier, we vetted a dozen popular 3PLs, comparing data from each—like how they charge, what services they provide, their technical capabilities, and their customer support model—and putting it all together in common terms.
In this article, you’ll find our top 7 picks, their biggest strengths, and what you need to know to determine if they’re a good fit for your company.
For the majority of ecommerce brands—particularly those in the direct-to-consumer space—outsourcing fulfillment is a pivotal part of their growth strategy. Taking the day-to-day, hands-on work of ecommerce fulfillment out of the equation frees the company’s executives and their teams to focus on strategic initiatives like research and development, marketing, partnerships, and fundraising.
Working with a fulfillment provider also converts would-be fixed costs, like warehouse overhead and employees, to variable costs—so the company only pays for the storage, materials, and labor they need at any given time.
Even those companies that start out self-fulfilling typically move to a 3PL fairly quickly, because as the company scales, so does the complexity of fulfillment—often exponentially. High-growth DTC brands can set themselves up for success by securing a 3PL partner with scalable infrastructure early in the company’s life.
ProTip: Establishing reliable distribution early is one of the 5 guiding principles successful DTC brands follow, according to The New Direct-to-Consumer Playbook, backed by data and insights from 100 DTC companies.
Since ecommerce began its meteoric rise, the logistics industry has changed to match. The established leaders in the space have been slow to adapt, giving rise to new-age fulfillment companies powered by cloud technology, like Deliverr and ShipBob.
But for all their emphasis on modern tech, those new 3PLs still adopted the old fulfillment model: owned infrastructure across the country. In most ways, these companies still function like their predecessors, but with a prettier UX.
The second wave of logistics innovation introduced a new fulfillment model: managed warehouse networks. These networks enable the fulfillment company to be more nimble and accommodating to different fulfillment needs, like value-added services, B2B and DTC order fulfillment, and international expansion.
In addition to the old vs. new (owned vs. network) warehouse model, the top 3PL companies vary in how they model their pricing and support.
The ideal 3PL will look different for every company, but the largest considerations can be broken into four main buckets:
Every 3PL will define its model slightly differently, but for the purpose of our research, we considered whether the company owns its infrastructure or manages a warehouse network (including how many locations are available and in how many countries), how the company manages customer support, and whether the company implements multi-warehousing. Specifically, we sought out whether the company employs load balancing—a method of managing inventory across multiple warehouses in which the 3PL shifts inventory at will, often without the merchant’s knowledge, in order to lower their own operational costs.
This is the 3PL’s bread and butter: how they actually pick and pack orders to get them out the door and on their way to your customers. Since warehouse operations can vary significantly, we looked primarily at these deal-breakers: B2B and DTC order fulfillment, custom fulfillment logic, climate control, and competitive SLAs.
Your 3PL’s software is your primary means of monitoring efficiency and communicating with your warehouses—so it needs to be powerful, intuitive, and dependable. We looked at whether these 3PLs had platforms that could support real-time order tracking, inventory management, direct ecommerce integrations, and EDI.
Quality is worth paying for, but at the end of the day, your fulfillment costs per order can make or break your margins. Since 3PLs tend to use different pricing strategies (and because pricing is so dependent on volume, product size and dimensional weight, and warehouse location), we spent less time looking at average price-per-shipment and more time examining billing transparency. The more you know about your costs, the more you can optimize your operations and increase your revenues.
Based on our research, the top 3PL companies are:
Shipbob was one of the first tech-forward 3PLs to spring up in response to ecommerce growth. Of its 30-plus warehouses, some are owned, while others are subcontracted.
Since ShipBob owns many of its warehouses, operations from location to location will be fairly consistent; however, this also means that there’s significantly less wiggle room when it comes to customizing your brand’s fulfillment specifics.
As one of the pioneers of tech-enabled 3PLs, ShipBob has a robust platform for its users to track incoming inventory and outgoing orders. Many of the company’s integrations with leading ecommerce platforms like Shopify are direct, though some are only through middleware or API.
ShipBob supports real-time order tracking and simple inventory management with customizable reorder notifications. However, merchants are responsible for buying and managing their own EDI software—and they’re required to use SPS Commerce.
ShipBob’s pricing structure follows the all-in-one model, which is often appealing for its simplicity, but can disguise important price fluctuations and make it harder for merchants to understand their real costs on a per-order basis.
Want to compare Airhouse vs. ShipBob?
While smaller than ShipBob, ShipMonk still offers room for successful ecommerce brands to grow into—all of which are owned by the company.
ShipMonk’s ownership of its warehouses means customers can expect consistency from location to location; but it may also limit the amount of customization each merchant can expect.
ShipMonk users regularly cite the company’s technology and easy-to-navigate interface as one of their favorite parts of their fulfillment service. The company offers a direct integration with Shopify, but connects to other ecommerce platforms through middleware or API.
ShipMonk offers the standard table stakes of real-time order tracking and inventory management, but users can’t set email notifications for when stock is running low. Merchants also must provide their own EDI software, which can be integrated with ShipMonk’s WMS platform through middleware.
Following an all-in-one pricing structure, ShipMonk delivers its invoices as aggregate totals for shipping, receiving, storage, and projects over the entire billing period.
It should be noted that ShipMonk has a minimum monthly fee, which is the greater of monthly storage fees or the result of a formula based on monthly average order volume. At its lowest, this fee is $250 per month; but companies with higher volume could be held to a higher minimum.
Want to compare Airhouse vs. ShipMonk?
ShipHero has invested heavily in its software—so much so that its business is divided between providing fulfillment services to ecommerce companies and providing software to other 3PLs.
ShipHero owns and operates its warehouses and uses a “no shipping zone” delivery method in which orders are sent via freight to the warehouse nearest their destination before being handed over to a carrier.
ShipHero’s technology is used by both its owned warehouses and some 3PLs who license the software from ShipHero. Technology glitches are often cited on review sites, but the company is also credited for making routine improvements.
ShipHero offers direct integrations to some ecommerce platforms, while others are connected using middleware or API. The software also offers real-time order tracking, inventory management, and EDI software through SPS Commerce.
ShipHero follows an all-in-one pricing structure and delivers its invoices as aggregate totals per outgoing order, receiving, project, and storage fee.
Want to compare Airhouse vs. ShipHero?
Red Stag Fulfillment is a more traditional 3PL than ShipBob, ShipHero, or ShipMonk. The company’s focus is primarily on logistics and operations within its two owned and operated warehouses. Red Stag specializes in moving large and/or hazardous goods.
Red Stag specializes in moving large and/or hazardous goods. While it only has two warehouses, they’re strategically located to optimize delivery efficiency across the country.
Red Stag’s primary focus is on logistics and inventory movement as opposed to technology. Its software is more rudimentary than most modern 3PLs, but is still more accessible than more traditional 3PLs that require all communication to be handled via email.
The Red Stag platform can track orders and inventory levels in real time, but merchants cannot set low stock notifications or notify the warehouse of incoming inventory through the platform. There is a direct integration with Shopify, but other ecommerce platforms are connected via middleware or API. Red Stag does not provide EDI software to its customers, but merchants that use SPS Commerce may integrate with Red Stag through middleware.
Red Stag uses a hybrid of the all-in-one and a la carte model, but will only deliver itemized invoices upon request, and for a fee.
Want to compare Airhouse vs. Red Stag?
Locally owned, independent 3PLs are a common starting point for DTC brands’ fulfillment needs because they’re close to home and offer a more personal experience. Since these mom-and-pop 3PLs are run by their owners and typically operate just one warehouse, they can often provide quality service for small brands; but scaling ecommerce companies tend to outgrow them quickly.
Local 3PLs are usually focused on a specific type of fulfillment logistics—DTC. Since they’re a common starting point for small brands, they don’t move many wholesale orders, leaving them without much experience in the nuance of B2B fulfillment.
Most mom-and-pop 3PLs have been in business for decades, meaning they follow the old fulfillment model (owned) and have little to offer in the way of technical capabilities. These warehouses usually license WMS software from a third party, so it’s slow to update. Plus, the tech is designed to be warehouse-facing—not merchant-facing.
As a result, merchants that use independent 3PLs can’t track orders or inventory levels in real time, and all communication about incoming freight, missing or on-hold orders, and other operational changes has to be conducted over email.
These 3PLs aren’t directly integrated with ecommerce stores. Some are connected through API or middleware, while others require the merchant to send batches of order information from their online store to the warehouse manually. EDI software is not available.
Independent 3PLs usually deliver invoices by email in large spreadsheets, with separate files for order preparation, shipping, receiving, and other fees. Itemization for each charge is minimal, or invoices only show aggregate total for billing period.
It should also be noted that these 3PLs typically pass on the licensing fee for their software to their customers in the form of a small monthly account fee.
Want to compare Airhouse vs. local 3PLs?
Enterprise 3PLs are experts in logistical efficiency. These companies own and operate dozens of warehouses around the globe and service some of the world’s biggest companies. As a result, they often have high order minimums, assume their customers have robust in-house operations teams, and place less emphasis on technology in favor of prioritizing logistics.
Major 3PL networks like these handle a ton of volume in both DTC and B2B orders. They’re efficient and reliable, which makes them great for large companies; but even for companies bringing in tens of millions in revenue each year, enterprise 3PLs can be too robust. Enterprise 3PLs follow rigid protocols to maintain their efficiency, which leaves little room for customization. These warehouses are typically too big (and too busy) to take on ecommerce projects like kitting, and provide less hands-on consultation to their customers.
Enterprise 3PLs use proprietary technology, but unlike tech-forward 3PLs, it’s designed with only the warehouses in mind. The tech lacks customer-centric features, so merchants usually need to reconcile data from the WMS with their own management software to track orders and inventory. These 3PLs do provide EDI software.
Enterprise 3PLs have direct integrations with most major ecommerce platforms, but like the WMS, those integrations were designed with the warehouse, not the customer, in mind. That means that making changes to the online store—whether the merchant uses a pre-built option like Shopify or a custom-built checkout system—typically won’t push changes through to the WMS automatically.
These 3PLs deliver invoices by email in large spreadsheets. Fees per order are not itemized. Shipping fees are either delivered as a total per shipment (if coming from the warehouse) or itemized by surcharge (if the customer uses their own shipping account—common among companies of this size).
Want to compare Airhouse vs. enterprise 3PLs?
Airhouse follows a unique managed warehouse network model. All Airhouse warehouses undergo a rigorous, 25-step vetting process, and only those that pass (about 20%) are added to the network. This frees the company to expand quickly, provide a broad range of fulfillment services without sacrificing quality, and invest in technology that puts merchants in control.
The Airhouse network includes warehouses that specialize in various forms of fulfillment and have varying infrastructure, which makes it more likely that merchants can access the services they need and customize their SOPs to meet their brand’s needs.
As one of the newer 3PLs on this list, Airhouse’s software is less robust than some older competitors; but customers have noted that it’s constantly being updated and that the team is very responsive to feature requests from customers.
Airhouse’s platform supports real-time order and inventory tracking, inventory management, and custom low-stock notifications. The company’s ecommerce integrations are direct, and EDI software is provided to merchants.
Airhouse delivers monthly invoices that are itemized per order with line items for every charge, from the base order fee to picks, packaging, shipping label, and carrier surcharges.
Airhouse is an all-in-one fulfillment solution unlike any other. Schedule a call with our fulfillment experts today to see what Airhouse can do for your brand.
