What Is Third-Party Logistics (3PL), and How Does It Work?

Third-party logistics (3PL) means outsourcing the physical side of selling to another company: storing your stock, packing your orders, delivering them and handling returns. The “third party” is the logistics company that sits between you (the seller) and your customer.

What a 3PL does

Most 3PLs offer some or all of these services:

• Warehousing: storing your products on shelves in their facility.
• Receiving: counting and checking stock when it arrives.
• Inventory management: tracking how much of each product you have, and where.
• Pick and pack: finding the items in each order and packing them for delivery.
• Delivery: getting the parcel to your customer, locally or nationwide.
• Returns: bringing back rejected or failed deliveries and restocking them.

When a 3PL does all of these for online orders, it is usually called ecommerce fulfilment.

How it works, step by step

1. You send your stock to the 3PL. Often the 3PL collects it from you or your supplier.
2. They count it in. Each product is checked, shelved and recorded, so you can see it in a dashboard.
3. You connect your sales channels. Orders from your website or marketplace flow to the 3PL automatically. Social media orders can be added manually.
4. A customer orders. The 3PL picks the item, packs it and labels it.
5. They deliver it. Ideally from the warehouse nearest the customer.
6. You restock. When stock runs low, you send more.

1PL, 2PL, 3PL, 4PL: what’s the difference?

For most Nigerian ecommerce sellers, the real choice is between doing it yourself with riders (1PL/2PL) and using a 3PL.

Who uses a 3PL?

• Online sellers who have outgrown packing from home.
• Brands that want to deliver quickly in several cities without opening stores in each.
• Businesses with seasonal spikes that don’t want to hire for the peak.
• FMCG and retail brands supplying shops and distributors in bulk (B2B fulfilment).

Benefits and trade-offs

Benefits: no warehouse rent or packing staff, faster delivery from hubs near your customers, costs that rise and fall with your sales, and better stock visibility.

Trade-offs: you don’t physically see every parcel, you depend on your provider’s processes, and very low-volume sellers may find doing it themselves cheaper for now. See in-house vs third-party fulfilment for a full comparison.

How 3PL pricing works

Most 3PLs charge for storage (space used), pick and pack (per order or item) and delivery (by distance and size). Some add fees for receiving, packaging or returns. For a full breakdown, read how much ecommerce fulfilment costs in Nigeria.

How to choose a 3PL in Nigeria

1. Hub locations: do they have warehouses near your customers?
2. Delivery speed: what is realistic within the hub city and to other states?
3. Integrations: do they connect to where you sell?
4. Visibility: can you see stock and order status in real time?
5. Flexibility: are there long contracts or minimum volumes?
6. Returns: how are they handled?

Movnn as your 3PL

Movnn is a fulfilment and logistics provider with 10+ hubs across Nigeria, including Lagos, Abuja, Port Harcourt and Kano. We store your products, pick, pack and deliver every order, same day in our hub cities, and handle returns. We connect to Shopify, Bumpa, Catlog, Amazon and custom websites, and work with sellers from 1 SKU to 100,000.