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How does a 3PL make money?


If you are wondering how a 3PL makes money, it ends here. 3PL companies providing cost-effective end-to-end supply chain logistics services to many sectors make money easily. The global logistics market is growing at a CAGR of 6.5% to reach 12,975.64 from 7641.2 billion dollars during 2020 to 2027. The 3PL or third-party logistics contribute a major chunk of the logistics market to grow even at a better CAGR of 7.6%. And depending on the frequency and complexity of the logistical needs, the 3PL services make more or less money. They charge either account retainer fees or per-project fees, and for one-time manufacturing run for products, 3PLs charge consultancy fees. Also, there are many modes of making money for the 3PLs, like providing value-added services. 

So, check out how 3PL companies make money in this fast-developing digitalized and globalized business world to deliver goods safely and on time to boost businesses. 

How do 3PL companies work?

Before diving into the ways of how a 3PL makes money, it is essential to know their needs and how they work to help businesses. Small companies up to a certain business level manage their logistics with their in-house team. If it is a manufacturing company, they procure raw materials from their vendors and distribute the finished products to their customers. As the business grows, they need speedy logistical service to deliver raw materials and deliver finished goods on time quickly. Hence, they seek the help of 3PL companies to relieve the tedious supply chain management to focus more on their core competencies to develop their business. In the case of eCommerce companies, when their business increases for more than 20 or 30 deliveries per day they need 3PL services. Big companies expanding business to new areas need 3PL services to fulfill their supply chain management effectively. Hence, by servicing all kinds of companies irrespective of their size, 3PL makes money in the following ways. 

10 top ways that the best 3PL companies make money

  1. Being a one-stop solution for all logistical needs of any business to offer them all under one roof, the 3PL makes money. 
  2. The asset-based 3PL leverages the advancing technologies to save money on fuel costs by assuring more control over the supply chain management.
  3. By offering a wide range of logistical services to all types of businesses depending on their needs, 3PL companies effectively make money by fulfilling all of them.
  4. With a wide network of contacts, many vendors can get discounts and offers to save costs on fuel, spare parts, and others.
  5. Offering value-added services like storing packaging and others can not only satisfy the customer needs but also make additional revenue.
  6. The increase of ecommerce business to over 4.2 trillion dollars in sales in 2020 directly increases the revenue of the 3PL companies.
  7. By owning many trucks and equipment, the best 3PL reduces the cost of hiring them for logistical needs to maximize profits.
  8. With tech-enabled solutions for freight, we need to reduce manual help costs to reduce labor costs and increase profits.
  9. With warehousing services for short and long term storage of goods managed by an effective WMS or warehouse managing system increases revenue.
  10. Expedites the reverse logistics to increase not only customer satisfaction but also improve the profit margin 

Only the best 3PL companies with warehousing services, own trucks & equipment, an expert team of logistical professionals, and leveraging advanced technology make more money by offering effective supply chain management solutions with value-added services from all the above ways.

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