There are over 10,000 3PLs in the United States alone. Finding the right partner can be overwhelming for brands.

Doss Co-founder and CEO Wiley Jones sat down with Matt Hertz, founder of Third Person, to discuss the critical process of selecting a 3PL (third-party logistics) provider. With 15+ years in e-commerce operations, Matt led logistics at Rent the Runway and Birchbox before founding Second Marathon consultancy. Having guided hundreds of brands through 3PL selection, he built Third Person to streamline what he calls "the marriage-level decision" of finding the right fulfillment partner. Here are the key insights from this conversation about how to get it right the first time.

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The 3PL Relationship: More Marriage Than Transaction

Matt emphasizes that the brand-3PL relationship is far more significant than most realize:

"The relationship between a brand and a 3PL is like a marriage. Unfortunately, brands think of it as very much like a transactional relationship."

This perspective shift is crucial, as selecting the wrong partner can significantly impact a brand's ability to deliver on customer expectations and scale operations. Yet many brands approach this decision with insufficient preparation, often simply "Googling 'best warehouse near me'" rather than conducting a comprehensive evaluation.

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Focusing on the Right Selection Criteria

According to Matt, the most common mistakes brands make when selecting a 3PL partner are:

Location Proximity: "If you have to visit your 3PL at high frequency, you probably have an issue. This relationship is not good."

Price Optimization: Selecting solely based on price is like "Googling 'cheapest doctor in Nashville'" for a major surgery.

Instead, brands should prioritize:

Cultural Fit and Communication: The intangible "feel" of working with a partner who understands your business

Technological Capabilities: The 3PL's ability to integrate with your sales channels and systems

Operational Competence: Their track record of delivering on commitments

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The Critical Role of Technology

Technology has become a decisive factor in what makes a 3PL competitive for high-growth brands:

"The 3PLs that are really starting to win a lot of business amongst emerging high-growth brands are those who have really strong integration and technology," Matt explains.

Modern brands expect 3PLs to seamlessly connect with:

• E-commerce platforms like Shopify
• B2B retail partners via EDI
• ERP systems like Doss
• Modern shipping carriers beyond UPS and FedEx

Matt shared examples of brands leaving 3PLs specifically due to tech limitations: "The brand is literally on the verge of leaving because the integration time and cost was excessive."

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The Natural 3PL Lifecycle

According to data Matt cited, approximately 47% of Shopify brands are looking for a new 3PL at any given moment. This isn't necessarily due to poor service but often reflects natural business evolution:

"The relationship is probably more similar to the school system. The place where you learned the ABCs and 1-2-3s is probably not the same institution that gave you a college degree."

Brands typically outgrow their 3PL partners when:

• Order volume increases substantially (5,000 → 50,000 monthly orders)
• Sales channels expand (DTC → Amazon, Costco, Target)
• SKU count multiplies (dozens → thousands)
• New product types require different handling capabilities

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Industry-Specific Considerations

While most 3PLs can handle basic operations, specialized requirements significantly narrow your options:

• Cold Chain: For perishables and temperature-sensitive products
• Alcohol Distribution: For wine clubs, breweries, or spirits
• Customization: For products requiring engraving or personalization
• Hazardous Materials: For products with specific regulations
• International Distribution: For global brands

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Building a Successful Long-Term Partnership

To maintain a thriving relationship with your 3PL:

Treat them as an extension of your team: "They're not a box vendor or someone selling you something that's transactional."

Communicate regularly: Share marketing promotions, visit facilities, and maintain open communication.

Consolidate partnerships when possible: "The moment you have two different 3PLs, you have two different portals, two different account managers, two different invoices. Everything is duplicated."

Avoid 4PL arrangements when possible: Direct relationships with operators provide better visibility and control across the entire value chain.

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Future of 3PL Partnerships

The 3PL industry is entering a turbulent period, with consolidation and technological advancement reshaping the landscape. Matt noted that while some predict significant attrition (with the claim that "a thousand 3PLs are going to go out of business over the next three years"), he points out this represents only about 3% annual attrition in a highly fragmented market.

Several key trends are emerging:

Technology as a differentiator: Forward-thinking 3PLs are investing heavily in integration capabilities, modern WMS systems, and API-driven architectures that enable them to seamlessly connect with brands' existing tech stacks.

Specialization vs. scale: The market is bifurcating between large, multi-location providers with comprehensive offerings and specialized boutique 3PLs that excel in specific niches or regions. Matt emphasized there's plenty of room for both: "I work with small 3PLs doing 5-10 million in revenue that are running really great, profitable, happy businesses... growing maybe 10% year over year."

Shifting selection priorities: Brands are increasingly valuing technological compatibility and cultural fit over pure price considerations or physical proximity.

As Wiley noted, this evolution parallels what's happening in the ERP space: "You still have verticalized players crushing it for specific industries and use cases... But there's still an even larger market for horizontal providers delivering amazing solutions regardless of business type."

For brands, this evolution means more options than ever to find 3PL partners that truly fit their operational needs – provided they approach selection strategically, focusing on long-term partnership potential rather than short-term convenience.

Doss integrates all your third-party data into one single source of truth, from sales orders to EDI and WMS. Want to see how? Book a live demo with us.