If you are a brand selling a product, at some point, you’ve had to figure out how you are going to store inventory and ship it to your customers. If you’re an established company, the odds are, you’ve faced this question multiple times as your business has grown and evolved. So, what’s better? Keeping everything in-house or partnering with a 3PL? And if you do partner with a 3PL, should you use a cross-border solution? The answer is, of course, that it depends on the brand and its goals. Let’s break it down.

Before jumping in, it’s important to understand the context in which the decision is being made. Every brand I have worked with is looking to optimize some combination of the following four goals: Lowering cost, improving service, ensuring capacity for the upcoming peak season, and having the ability to scale with long-term growth. So, the first step is to understand your priorities. Which of those four is the most important? What’s the second and how far below the first does it fall? Only with this done can we assess which option is the right fit or identify when it is time to change directions.

With our priorities set, we can begin to review our options. First, let’s consider in-house fulfillment. If keeping costs low for the long term is your utmost priority, then this option must be seriously considered, but it comes with a significant risk. What if you make the wrong investments? When done right, running fulfillment in-house allows a brand to have full control of service quality, peak capacity, and long-term scalability, all while having full control of the costs involved. But building out a logistics wing to your business requires significant upfront expenses and an entirely different set of expertise than developing, marketing, and selling a product.

Brands that want to succeed with this route must hire the right people, invest in the right equipment, and store their products in the right locations, and they must do so consistently in order to maintain an efficient operation. While any mistakes made along the way are reversable, they are costly. Many brands turn to in-house fulfillment looking to cut costs, only to find themselves with a bloated warehousing spend dragging the company down. In fact, this is common enough that some 3PLs’ growth and acquisition strategy is centered around finding warehouses for sale by brands that have invested heavily in a facility they can no longer afford to operate.

To avoid this, building the right logistics team is crucial. When brands build out the right warehousing support for their business, there isn’t a 3PL out there who can beat the cost of in-house fulfillment while meeting desired service expectations.

But on the Other Hand…

So, what about 3PLs? Especially if you’re looking to keep costs down, is there really a situation where working with a third-party provider is better? The short answer is often yes. A 3PL handles warehousing, fulfillment, and shipping for other businesses, allowing them to focus on core operations like product development and marketing. 3PLs come with a variety of advantages that could make them the right choice for your business:

· First, 3PLs take on all the risks associated with owning and operating warehouse space, allowing brands to avoid those costs, the risk associated with making the wrong decisions along the way, and focus on their core business.

· Second, the opportunity to leverage expertise, technology, and economies of scale in the warehouse that is out of reach for a brand individually. Put simply, if you’re working with a 3PL that is a good fit for your brand, then they have likely helped brands similar to your own. That means you don’t have to figure out how best to store and fulfill your product, as the 3PL has already done it for you. Rather than figure out the solutions on your own, you’ll have access to experienced experts on day one.

· Finally, and perhaps more importantly for cost-minded readers in the e-commerce space, 3PLs are aggregators of parcel volume. They often have access to shipping rate discounts that brands cannot achieve on their own. This translates to real and significant cost reductions compared to negotiating your own parcel contracts.

However, working with a 3PL doesn’t come without its risks. A 3PL relationship is not a typical vendor relationship. It is a partnership, and an intimate one at that. A brand can do everything right to ensure a positive customer experience, but if the 3PL fails to get the product out on time, then that customer’s experience will be a negative one despite all of everyone’s best efforts. So, making sure you are partnering with a 3PL you can rely on is just as critical as the cost savings they may provide.

When it comes to making sure you’re picking the right partner, the good news is also the bad news. That news being there are around one thousand 3PLs, all with unique offerings, for a brand to choose from. This means that there is definitely a 3PL out there that perfectly matches your brand’s needs and priorities in this partnership, but it also means that finding said 3PL can be incredibly cumbersome. Adding to this complexity is that the 3PL market is inherently opaque. 3PLs don’t publicly publish their rates and it is difficult to verify if they truly offer the services they claim until you’re already working with them.

I commonly work with brands that are unhappy with their current partnership and have decided to take their business elsewhere. To avoid this and ensure success, it helps to work with companies that assist brands in finding and vetting 3PLs during the RFP process. Because once you find the right partner, a 3PL will hasten your company’s growth by leveraging their expertise to keep your customers happy and your costs low.

Help Across Borders

Finally, let’s talk about cross-border fulfillment. This is something you could technically do in-house, but I strongly recommend against it unless you have significant expertise already. So, I will focus on the 3PL aspect of this solution. Cross-border fulfillment is when a 3PL is located just across the border from the US, but most or all its outbound shipments are for US customers.

Historically, these 3PLs were also able to leverage their location to take full advantage of the de minimis exemption, allowing brands to leverage the Temu/Shein fulfillment model to lower costs. Additionally, cross-border 3PLs offer many of the same advantages and disadvantages as a traditional 3PL, but their location means their fulfillment pricing is usually a little cheaper and delivery times a little slower. Before the closing of the de minimis exemption for China (which may have changed by the time this article is published) e-commerce brands were flocking to cross-border providers as the fulfilment cost savings plus the tax avoidance made the solution a no-brainer for cost minded brands.

However, interest has reduced now that brands that manufacture in China can no longer leverage this exemption. That said, there are still use cases for this solution. The first and most obvious is if your brand manufactures outside of China where the de minimis exemption is still in effect. You can take advantage of the lower cost of space and labor that cross border 3PLs offer, while also avoiding duties and tariffs for all orders below the $800 threshold.

However, if you are unable to extricate yourself from Chinese manufacturing, cross-border solutions do still offer one other unique advantage in the form of duty and tax deferral. If cash flow is an issue, then being able to delay D&T on your product until the inventory has been sold to your customer is a major advantage. If either of these scenarios applies to you, or you’re willing to trade delivery times for lower fulfillment costs, then cross-border 3PLs are worth the time to consider.

At the end of the day, there’s no universal right answer, just the right answer for your brand, your goals, and your current stage of growth. There is no one-size-fits-all, but understanding the trade-offs of each option empowers you to make a decision that aligns with your cost structure, customer experience expectations, and growth trajectory. Whether you decide to build internally for maximum control, partner with a 3PL for scalability and expertise, or explore cross-border fulfillment for strategic cost savings, the key to your decision is clarity of what matters most to your business, and on the capabilities of the partners you trust to help get your product to your customers. Make the right call here, and it’ll pay dividends across your entire business.

Majeed Peffley is Senior Fulfillment Analyst at Shipware, where he develops RFPs, sources 3PLs, and negotiates pricing and contract terms for brands looking for a 3PL.

This article originally appeared in the September/October, 2025 issue.