Fulfillment

3PL

Third-Party Logistics — an external warehouse that stores, picks, packs, and ships your inventory for a per-unit fee. The step between dropshipping and running your own warehouse.

A 3PL is an external fulfillment warehouse that stores, picks, packs, and ships your inventory for a per-unit fee. Examples: ShipBob, Shipmonk, Shipstation-partnered fulfillment centers, Deliverr/Flexport, and many smaller regional 3PLs.

The 3PL step usually makes sense at $30K-$50K/month in revenue, when dropship shipping times become a real retention problem and the savings from bulk inventory purchase cover the warehousing fees. Typical per-order cost is $3-$7 depending on product dimensions, which is usually cheaper than AliExpress or agent-fulfilled dropshipping once you factor in supplier disputes, lost packages, and support burden.

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Related terms in Fulfillment
AliExpress
Alibaba's B2C marketplace of Chinese sellers — the default starting supplier for most new dropshippers. Low MOQs, low prices, long shipping times.
Chargeback
A payment reversal initiated by the customer via their bank. Each chargeback is a full refund plus a $15-$25 fee — and too many will get your payment processor shut down.
CJ Dropshipping
A dropshipping agent that sources, stocks, and ships products — typically from China with US or EU warehouse options. Faster and more branded than raw AliExpress.
Dispute
A contested transaction filed through a payment platform (often PayPal). Similar to a chargeback but usually resolvable without a fee if you respond with tracking proof.
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