Amazon Third Party Logistics: Pros and Cons in 2025

What is Amazon 3PL, and How Does It Work?

As part of the e-commerce supply chain, Amazon has turned up third-party logistics services into one of its priorities. It adds up to the challenges of being an Amazon 3P seller: stocking, keeping, and shipping. With good strategies, 3PL providers manage these to ensure that sellers concentrate on growing their businesses. 

When compared to Fulfillment by Amazon, which runs the entire processing under controls of Amazon, with 3PL, one can have warehouses, order fulfillment, and shipping done for you while providing a better scope for flexibility and cost savings.

Pros of Using a 3PL Provider for Your Amazon Business

1. Lower Storage and Fulfillment Costs

In fact, in recent years, the FBA storage cost has been hiked, especially in peak seasons. A 3PL may help in saving costs through lesser storage fees and different pricing schedules, which can be much more cost-effective with respect to inventory management.

With 3PL, one has access to a very wide distribution network; hence they can store goods much closer to customers. This significantly reduces shipping costs and efforts while also improving delivery time, hence encouraging customer satisfaction and sales conversion rates.

To maximize cost savings, sellers should also implement smart repricing strategies that align with their fulfillment model, ensuring competitive pricing while maintaining healthy profit margins.

2. Multi-Channel Fulfillment

A key strength of the 3PL is that it is multi-channel; not limited to Amazon alone. If you are selling through Walmart, Shopify or eBay, you can acquire a 3PL provider to manage all your orders from just one inventory.

Therefore, management of the stock is simpler, and it helps towards the lessening of overselling risk, which is usually a common problem for companies operating several fulfillment channels through manual intervention.

To stay competitive across multiple platforms, sellers should optimize their listings with Amazon SEO best practices that improve search visibility and drive organic traffic.

3. Greater Inventory Control

With FBA, there is stringent inventory control by Amazon, including long-term storage fees and removal orders. A 3PL will give you full control over the way you manage your inventory, doing away with unnecessary additional charges and yet again stock-outs.

Most of the 3PL providers have real-time inventory tracking, and thus you can easily check your stock levels and readjust according to your strategy.

4. Faster Shipping Options

Most 3PLs maintain multiple warehouse sites spread across the U.S. As such, they can ship products faster for customers. Some even have made available 2-day shipping solutions that complement Amazon’s Seller Fulfilled Prime (SFP) program.

So far, as emphasized by Amazon, a 3PL that is capable of matching Prime speed delivery can serve as a huge competitive advantage.

Even without the Prime badge, sellers can drive traffic through effective Amazon advertising, boosting conversions and offsetting the impact of longer delivery times.

5. Avoid FBA Restrictions and Delays

During peak seasons, Amazon typically implements storage restrictions that make sending in new stock very difficult for sellers. A 3PL provider gets past this restriction and therefore allows you to store and distribute your inventory without worrying about it.

FBA becomes quite unpredictable due to its frequent changing policies by Amazon, working with a 3PL provider would be much more flexible to comply with the necessary changes.

6. Better Customer Service and Returns Management

Handling returns through FBA can be expensive and inefficient. Many 3PL providers offer a smoother return process with better tracking, allowing you to maintain high customer satisfaction.

They can also process returns more efficiently, reducing the likelihood of lost inventory or unnecessary fees.

Cons of Using a 3PL Provider for Amazon Sales

1. Complex Setup Process

Switching from FBA to a 3PL requires time and effort. You’ll need to integrate the provider’s system with Amazon’s Seller Central, set up shipping automation, and establish clear communication for order fulfillment.

The onboarding process may involve signing contracts, configuring software, and training your team to use the 3PL’s platform. This transition period can take weeks or even months, depending on the complexity of your business.

2. Higher Upfront Costs

While 3PL services often save money in the long run, they may have higher initial costs. You’ll need to pay for storage, pick-and-pack services, and shipping fees upfront, unlike FBA, where fees are deducted per sale.

However, these costs may be offset by lower long-term expenses, especially if your business scales efficiently with 3PL services.

3. Need for Strong Inventory Management

Since Amazon does not manage the fulfillment process, you must ensure your 3PL provider keeps accurate stock levels. If inventory data is not updated correctly, it can lead to stockouts or over-ordering.

4. Lack of Amazon Branding Benefits

Amazon’s FBA program offers benefits like the Prime badge, which boosts conversions. While Seller Fulfilled Prime (SFP) is an option, qualifying for it requires strict adherence to shipping performance metrics.

Without the Prime badge, customers may prefer FBA sellers over your listings, potentially impacting sales. To counter this, ensure your 3PL provider offers fast and reliable shipping.

To offset the absence of the Prime badge, sellers must focus on alternative strategies like Amazon advertising to enhance visibility and conversion rates. 

5. Risk of Poor Service from 3PL Providers

Not all 3PL providers offer the same level of service. A poorly managed provider can result in delayed shipments, lost inventory, and negative customer reviews. Researching and choosing a reliable 3PL partner is crucial.

Look for providers with strong reviews, a proven track record, and experience working with Amazon 3P sellers. Many high-revenue sellers outsource account management to experts to avoid fulfillment and operational risks. 

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How to Choose the Right 3PL for Your Amazon Business

There are a few important questions to ask if you are thinking of hiring a 3PL. Consider the following: 

• Experience with Amazon sellers: The provider must fully understand Amazon’s fulfillment requirements.
• Warehouse locations: Their network should be maximally dispersed to allow very fast shipping of your orders.
• Integration with Amazon. Choose a provider that syncs with Amazon Seller Central. 
• Scalability: Your 3PL should be able to grow along with your business. 
• Pricing transparency: Watch out for hidden charges from storage to picking to packing.

Conclusion: 3PL- Is it an Option for Your Amazon Business in 2025?

3PL providers can help in cutting down fulfillment costs, getting new channels away from Amazon, and enhancing logistical flexibility on the one hand, and sometimes complicate starting up and putting things in place in terms of administration and finance on the other. If having more control over your fulfillment process and reducing dependence on FBA is one of your company’s goals, then moving toward a 3PL will become a major strategic opportunity. 

AMZDudes tailors a host of solutions to maximize sales and efficiency in Amazon operations for 3P sellers. Whether it be Amazon ads or account management or wholesale strategies, we have customized solutions for you. Whether you need a guide to transition into a 3PL or optimize your Amazon fulfilment strategy, get in touch with AMZDudes!