Should you run your eCommerce fulfilment or outsource to a 3PL?

Summary

• In-house fulfilment may make sense if your fulfilment process is simple, you manufacture your own products, your volumes sit at either extreme, or you are building infrastructure for multiple brands
• Outsourcing to a 3PL may make sense if you want to stay focused on your brand, are scaling fast, or don’t have the capital for warehouse infrastructure
• The right fit depends less on SKU count or order volume and more on the complexity of your pick and pack process
• The true cost of running your own warehouse goes far beyond rent: fit out, equipment, WMS, staffing, H&S, etc, all add up
• Switching to a 3PL is more straightforward than most brands expect: a well-managed transition typically takes a matter of weeks
• There is no universally right answer, the best choice depends on your products, your stage and your goals

Should you do your fulfilment in house or via 3PL?

Most eCommerce brands eventually face this crucial decision: do we handle fulfilment ourselves, or do we hand it over to a Third-Party Logistics provider (3PL)? It certainly isn’t a simple question: get it wrong either way and it may well affect your margins, delivery times and sanity..! On the other hand, a Forrester study has shown that eCommerce businesses that switch to a 3PL see an average 28% decrease in fulfilment costs per order.

While there is no universal right choice, there are signals that may point you in one direction or the other. We hope this article helps you make the right call for your business.

You should do fulfilment in house if…

Some brands may benefit from running their own warehouse and distribution centre. If any of the following apply to you, in-house fulfilment could be the right call.

Your volumes sit at either extreme. A 3PL works best in the middle ground i.e. consistent, growing order volume with a focused SKU range. If your volumes are too low to justify a 3PL’s minimum commitments, in house may be more cost effective. And paradoxically, if your volumes are extremely high, it may be worth modelling whether owning your own space makes financial sense.

Your product requires specialist handling that most 3PLs can’t accommodate. Temperature-controlled storage (most food and some beverage brands), hazardous materials, glass bottles, or highly bespoke packaging and assembly.

You manufacture your own products. If production and dispatch happen in the same facility, building fulfilment in house can make sense operationally.

You are building infrastructure for multiple brands. If your long-term plan is to build a foundation that could support five, ten, or twenty brands under one roof over time, owning the operation may be the natural choice.

You should outsource fulfilment to a 3PL if…

For brands focused on growing product and customer base, outsourcing warehousing and distribution to a 3PL may be the better choice. If any of the following apply to you, partnering
with a 3PL could be the right call.

Your SKU count is focused but your order volume is growing. A low SKU to high order ratio is the clearest signal that a 3PL will work well for you. The ratio matters more than either number in isolation.

You sell through multiple channels i.e. DTC, retail, marketplace. A good 3PL will handle all of it from one place.

Your products are standard SKUs. Lightweight, non hazardous, straightforward pick and pack. No dangerous goods, no heavy items, no highly bespoke orders.

Your stock arrives palletised. All established 3PLs require palletised stock. If your supplier already delivers on pallets, you’re set. If not, factor in the cost of that conversion before comparing prices.

You are growing fast. Speed matters; a good 3PL can have you up and running in weeks instead of months.

You want to stay focused on your brand. Warehouse management is a full-time operation and every hour spent on it is an hour not spent on product, marketing or customers.

You don’t have the capital to tie up in infrastructure. The true cost of setting up a warehouse is significant (more on that below).

Costs of running your own warehouse vs via a 3PL

Warehousing is, as one may put it, “a bottomless pit of costs” which is why so many fulfilment houses fail. On the other hand, for the right business at the right stage, owning your operation can not only be viable but also become a competitive advantage.

What does switching to a 3PL look like?

Switching from in house to a 3PL can feel like a big (and scary) leap. In our experience, the transition is almost always more straightforward than brands expect. How quickly it progresses depends largely on how quickly you can provide what we need to get started. We have completed transitions in as little as two weeks, though four to six weeks is more typical.

We have over 36 years of experience helping brands across health and wellness, beauty, skincare, pet care, outdoor and specialist sports, as well as businesses entering the UK market for the first time, make this transition. Here is what it typically looks like.

Which option is right for you?

Not sure which way to go? Work through these questions:

*Why do we ask about your pick and pack complexity? Because it is one of the biggest factors in whether a 3PL will work well for you. There is no right or wrong number of SKUs or order volumes to work with a 3PL, it all depends on the products, packaging and complexity of your pick and pack process. We appreciate it’s not a simple question to answer, so here are a few examples:

Simple = strong 3PL fit	Complex = discuss with us first
250 SKUs with 2–3 small items per order, packed using standard boxes in a small number of sizes	250 SKUs with products of varying sizes, varying packaging requirements and a mix of B2B and consumer orders
250 orders of pre-boxed items where stock arrives ready to dispatch and only requires a shipping label	250 orders of specialist items picked from 100+ SKUs, requiring bespoke presentation

Still not sure which model fits your business?

Every business is different: some of the UK’s fastest-growing eCommerce brands have built their own warehouses and never looked back, others have outsourced from day one and scaled to tens of millions without ever touching a pallet truck… The “right” model is the one that works for your business, at your stage, with your products and your goals. If you are still hesitating between building fulfilment in house versus working with a 3PL, talk to us. We will give you an honest view of whether outsourcing is the right fit for your business.