The point when your order volumes begin to rise consistently is often the same point where terms like 3PL and 4PL start appearing in conversations, pitches, and Google searches. And understandably so. Outsourcing fulfilment can feel like a big step. You’re handing over a critical part of your customer experience, and choosing the wrong model can be expensive, disruptive, and frustrating.
While there’s no right answer when it comes to fulfilment models, it’s crucial to pick one which aligns most closely with your brand’s current operations volume, as well as what your order volumes may look like a year down the line.
So before deciding which fulfilment model is “best”, it’s important to understand what each option actually involves and, just as importantly, who it’s designed for.
In this guide, we’ll break down in-house fulfilment, 3PL, and 4PL and provide insight into how each model works: where it adds value, where it falls short, and how to decide which approach makes sense for your ecommerce brand at your current stage of growth.
In-House fulfilment is a fulfilment model where an ecommerce business manages all order fulfilment operations internally. This includes storing inventory, picking and packing orders, shipping products to customers, handling returns, and managing fulfilment technology using the business’s own warehouse space, staff, and systems.
In-house fulfilment is most commonly used by early-stage ecommerce brands with low or predictable order volumes.
Third-party logistics is an outsourced fulfilment partner that manages warehousing, storage, pick and pack, order fulfilment, shipping, and returns on behalf of an ecommerce or retail brand. Inventory is stored in a 3PL warehouse, and orders are fulfilled using the provider’s warehouse infrastructure, fulfilment technology, and courier networks.
3PL warehouse services are designed to support scaling ecommerce brands by providing flexible, scalable fulfilment without the need to manage operations in-house.
Fourth-party logistics is an outsourced fulfilment partner that manages warehousing, storage, pick and pack, order fulfilment, shipping, and returns on behalf of an ecommerce or retail brand. Inventory is stored in a 3PL warehouse, and orders are fulfilled using the provider’s warehouse infrastructure, fulfilment technology, and courier networks.
3PL warehouse services are designed to support scaling ecommerce brands by providing flexible, scalable fulfilment without the need to manage operations in-house.
For most ecommerce brands, in-house fulfilment is the humble beginning.
Orders are packed by hand, stock is stored wherever space allows, and shipping is managed using the most accessible tools and couriers. This fulfilment model offers complete control over inventory, processes, and customer experience, making it the ideal option for early-stage brands.
At low and consistent order volumes, in-house fulfilment is often the most cost-efficient, and easiest to manage. Minimal set-up and no external dependences – it keeps your operations tight, and your overheads low.
However, as your brand gains some traction, the limitations of in-house fulfilment might start to crawl out of the woodwork.
The main limitation with in-house fulfilment is that your growth is constrained by the amount of space, staff and time you have at your disposal. If you’re brand is regularly hitting a high daily order volume, it might start to feel overwhelming if you’re still trying to pack shipments in your spare bedroom.
Founders and their teams find themselves spending more time patching together temporary fulfilment issues, rather than focusing on growth. Without a significant investment in your infrastructure, accuracy may begin to slip, and shipping is likely to become slower, and less efficient.
A 3PL fulfilment model is designed for ecommerce and retail brands that have outgrown in-house operations but are not looking to build a full logistics function internally.
With a 3PL warehouse, your stock is stored in a purpose-built fulfilment centre, where experienced teams handle the day-to-day work of picking, packing, shipping, and returns. Orders are processed using dedicated warehouse infrastructure and smart fulfilment technology, meaning faster dispatch, fewer errors, and clear, real-time visibility over your inventory – without the overwhelming overhead costs associated with expanding in-house.
One of the biggest advantages of a third-party logistics partner is their ability to help your brand scale. Storage and fulfilment costs are generally usage-based, allowing brands to flex capacity during peak periods without pricey long-term commitments.
While onboarding and system integration requires an initial investment of time, day-to-day control is more hands-off – a trade-off that most ecommerce brands find worthwhile. With fulfilment all taken care of, logistics becomes reliable, predictable, and scalable - allowing your teams to refocus on managing a growing brand, as opposed to operational damage control.
Fourth-party logistics, or 4PL fulfilment, operates at a strategic level rather than a physical one.
Rather than owning physical assets, or warehouse space, a 4PL is essentially an ‘overseer’ of an entire supply chain – this can include overseeing multiple 3PL warehouses, carrier relationships, suppliers, and international distribution networks.
By acting as a single point of accountability for brands, a 4PL can reduce the internal burden of logistics management and helps control costs at scale.
However, this model introduces higher complexity and cost and often reduces visibility into individual fulfilment operations. For most ecommerce brands, a 4PL is unnecessary until logistics complexity becomes significant, such as managing multiple regions, warehouses, or suppliers across borders. However, if you have got your sights set on international expansion or franchising, it’s an important model to keep on your radar.
There’s no universally “right” fulfilment model, only the one that fits your business right now, and won’t hold you back six or twelve months down the line.
In-house fulfilment offers control, but that control comes with growing complexity and hidden costs. A 3PL provides the structure, flexibility, and expertise most scaling ecommerce brands need to grow without logistics becoming the bottleneck – however it’s crucial to do your research and find one which is compatible with your aspirations. And while 4PLs play a valuable role, they’re typically best suited to large, complex supply chains rather than day-to-day ecommerce fulfilment.
The most crucial step to managing your fulfilment is taking an honest look at the strategy you’re using today. If fulfilment is absorbing more time, limiting growth, or creating friction behind the scenes, it may be worth asking whether a different approach could support your brand more effectively. After all, reassessing your fulfilment setup now can help ensure it evolves alongside your business - not in reaction to problems later.
If you're intrigued by the sound of outsourcing your fulfilment to a 3PL partner, GNOC might just be your saving grace. Get in touch with our friendly team, and see how outsourced logistics can take the stress out of your brand.