The thrill of growing your own ecommerce business can quickly give way to backaches as you personally store and fulfill tens or hundreds of orders per day. And that’s not even mentioning the garage-full of inventory that you can hardly navigate!

On the other end of the spectrum, large businesses can also easily see their logistics overwhelmed by growth. They may need additional warehouse space, or find it challenging to expand their own warehouse, new fulfillment capabilities, or a better footprint across the country to reduce final mile shipping distances.

Both of these types of sellers need the same thing: a third-party logistics (3PL) partner.

In this article, we’ll provide a quick rundown of what a 3PL does before providing an in-depth guide to what you should look for in a 3PL when you need to outsource fulfillment.

What is a Third-party Logistics (3PL) Company?

A third party logistics (3PL) provider, broadly speaking, is a company that handles inventory management, warehousing, and fulfillment for retailers. The industry has undergone a massive transformation over the past two decades as retail growth has shifted online, but the basic principles have remained the same. Logistics management is fundamental to 3PL services, which focus on executing logistical tasks efficiently.

3PLs receive inventory from their customers, and then they safely store it in the manner required to support efficient outbounds. They integrate with their customers’ sales channels, so that when an order comes in, the 3PL fulfills it without intervention from the seller. Within that broad characterization, there’s as much variety in the 3PL industry as there is in retail.

Some 3PLs focus exclusively on retail replenishment, while others take the opposite approach and only work with ecommerce sellers. Some will specialize based on the type of goods fulfilled, as many require special handling or conditions in the warehouse (such as oversized items or refrigeration). Others will focus on creating dense networks in certain regions of the country, while many now compete with Amazon to create robust nationwide networks.

Definition of 3PL

A 3PL, or Third-Party Logistics provider, is a company that offers outsourced logistics services to manage one or more aspects of a business’s supply chain operations. This can include inventory management, warehousing, transportation, and distribution. By partnering with a 3PL provider, businesses can streamline their logistics operations, reduce costs, and improve efficiency. Third party logistics providers bring specialized expertise and technology to the table, allowing businesses to focus on their core competencies while leaving the complexities of logistics operations to the experts. Whether it’s managing inventory, optimizing warehouse space, or coordinating transportation services, a 3PL provider can significantly enhance the overall performance of a supply chain.

Benefits Of Using A 3PL Provider

Using a 3PL provider can bring numerous benefits to a business, including:

• Cost Savings: Third party logistics providers can help businesses reduce their logistics costs by leveraging their expertise, technology, and economies of scale. By outsourcing logistics operations, businesses can avoid the investments required for infrastructure and personnel.
• Improved Efficiency: 3PL providers can help businesses streamline their logistics operations, reducing the time and effort required to manage inventory, transportation, and distribution. With advanced warehouse management software and transportation management systems, 3PLs can optimize every step of the logistics process.
• Increased Scalability: As businesses grow, their logistics needs become more complex. A 3PL provider can help businesses scale their logistics operations quickly and efficiently, without the need for significant investments in infrastructure or personnel. This flexibility allows businesses to adapt to changing market demands with ease.
• Enhanced Customer Service: 3PL providers can help businesses improve their customer service by providing fast, reliable, and flexible logistics solutions. With efficient logistics operations, businesses can ensure timely deliveries and accurate order fulfillment, leading to higher customer satisfaction.
• Access to Specialized Expertise: 3PL providers offer access to specialized expertise and technology, such as warehouse management software and transportation management systems. This allows businesses to benefit from the latest advancements in logistics without having to develop these capabilities in-house.

How Do 3PLs Work?

Generally speaking, a 3PL owns two critical aspects of the ecommerce logistics chain: inventory storage and pick & pack fulfillment. As reverse logistics become more prominent, many 3PLs are also building out the ability to operate “in reverse” to help their clients manage returns.

In this section, we’ll provide a run-down of standard 3PL processes that make the operation hum.

Technical Integration

To start, ecommerce 3PLs need to be able to see orders received by their clients in real time in order to be able to fulfill them quickly. Before the rise of ecommerce, and even in the early days of the ecommerce revolution, speed was not a priority for order fulfillment. Many clients would manually send their 3PLs orders in Excel spreadsheets (or even in Word docs) at the end of each day or week, and then the 3PL would get to work fulfilling the orders.

You don’t need us to tell you that the world works a bit differently these days.

Today, any 3PL set up for ecommerce insists on building a direct integration between their systems and a customers’ sales channels. Without an instantaneous feed of orders from ecommerce channels like Amazon or Shopify, orders wouldn’t be shipped on time, and sellers would be faced with a deluge of unhappy customers asking why their shipments are delayed. The best 3PLs have pre-built integrations with major marketplaces, shopping carts, and ecommerce platforms, so integrations are as simple as a few clicks for their customers. They also have open APIs that support more custom integrations to reflect the diversity of tech stacks that modern sellers have built.

Inventory Receiving

Next in the process is receiving – after all, a 3PL can’t fulfill orders with inventory that it doesn’t have. Sellers can send their inventory via freight directly from their manufacturer to their 3PL, while giving the manufacturer any receiving specifications the 3PL might have. This minimizes the number of intermediary stops for inventory, which reduces cost and the potential for inventory to get stuck inaccessible in the wrong location.

Generally speaking, 3PLs prefer to receive pallets with as few SKUs as possible, prepped for shipping, and pre-labeled. This “platonic ideal” of receiving, though, is rarely fully true, and so many 3PLs offer inventory prep services to get items ready for shipping. This enables the seller to still ship directly from the manufacturer to the 3PL, even if the manufacturer isn’t well versed in how to prepare items for ecommerce.

Long receiving times are a big problem in the eCommerce world – Amazon FBA receiving timelines can vary significantly by shipment type, season, and fulfillment-center workflow, so sellers should review Amazon’s current inbound and peak-readiness guidance rather than assume a fixed receiving window. For instance, many seller complain of Amazon FBA taking 14 days to get inventory that is at their fulfillment centers ready to ship. A two week wait is unacceptable for sellers who could see their best sellers go out of stock while waiting. That’s why Cahoot’s fulfillment services offer an industry-leading receiving SLA.

Inventory Storage

Much of the floorspace in a warehouse is dedicated to inventory storage, but the way in which 3PLs store inventory has changed dramatically thanks to the shift towards ecommerce order fulfillment. A cloud-based warehouse management system (WMS) can enhance visibility and streamline inventory management across multiple fulfillment centers.

Warehousing services that focus on B2B replenishment store their inventory efficiently in large bundles – think of a full pallet of goods, or a pallet of goods off of which multiple cases can quickly be picked.

Inventory storage at a warehouse that fulfills ecommerce orders is instead optimized so that orders can easily be picked in “eaches” (or single quantities). The speed with which a warehouse picker can get to items and pull one or more out is vital to operations because they have to repeat the process hundreds of times per day.

Warehouse Fulfillment

Pick and pack fulfillment is the term for the process by which 3PL personnel select the items that a customer ordered and put them in boxes ready to ship. This is the most vital part of the process for ecommerce sellers, because speed and accuracy underpin a positive customer post-purchase experience.

Amazon Prime’s continual push to cut delivery times shorter means that warehouses can’t wait to fulfill orders; each customer that presses “buy” needs to have their item picked, packed, and dropped off with the carrier that same day. Anything less will result in a delivery delay, and delivery delays lead to negative customer reviews.

Next-gen 3PLs like Cahoot have developed intelligent software controls to maximize the speed and accuracy of picking and packing in their warehouses. Cahoot software, for instance, intelligently directs warehouse personnel to maximum speed and efficiency with pick lists of products. The pickers then use barcode scanners to ensure that the right product is picked every single time. In this way, Cahoot achieves both speed and accuracy, ensuring the zero-defect, fast fulfillment that customers demand.

Returns Processing And Reverse Logistics

eCommerce warehouses must be able to handle returns – those that don’t leave their customers unable to provide a critical service to the end customer. Marketplaces again have led the market with super-easy no-fault returns policies, so online merchants of all stripes are under heavy pressure to offer the same on their DTC sites. So, warehouses have to be able to receive returns, assess whether they’re damaged or not, and process them back into available stock whenever possible to minimize loss.

Signs that Your Organization Needs a 3PL Provider

If your business is experiencing any of the following signs, it may be time to consider partnering with a 3PL provider:

• Rapid Growth: If your business is growing rapidly, a 3PL provider can help you scale your logistics operations quickly and efficiently. They can provide the necessary infrastructure and expertise to handle increased order volumes and complex logistics requirements.
• Complex Logistics Needs: If your business has complex logistics needs, such as multiple warehouses, transportation modes, or inventory management requirements, a 3PL provider can help you manage these needs effectively. Their experience and technology can streamline logistics operations, ensuring smooth and efficient processes.
• High Logistics Costs: If your business is experiencing high logistics costs, a 3PL provider can help you reduce these costs by leveraging their expertise, technology, and economies of scale. They can identify inefficiencies and implement cost-saving measures to optimize your logistics operations.
• Limited Logistics Expertise: If your business lacks logistics expertise, a 3PL provider can provide you with access to specialized knowledge and technology. Their experience in managing complex logistics operations can help you overcome challenges and improve overall efficiency.

What Should You Look for in 3PL Companies?

If you’re an ambitious seller looking to boost your growth, you should know that the right 3PL can be a revenue driver, and not just a cost center. The best 3PLs will improve your delivery experience, which makes for happy customers that buy again and again. They can also help you control and reduce shipping costs by leveraging partnerships with various carriers.

Here are the most important things to look for in your 3PL:

Nationwide Warehouses

Even if you’re small now, you can still strategically distribute your inventory to unlock affordable fast shipping. That is, if your 3PL has nationwide USA fulfillment centers. A third party logistics company can enable businesses to expand their operational reach into new sales channels and regions.

A McKinsey study found that a whopping 90% of US online shoppers expect free two- to three-day shipping, and Amazon metrics show that turning on the Prime badge can net 50% growth for a product. If you or your current 3PL only have one or two locations to ship from, though, two-day shipping to customers halfway across the country requires eye-watering expedited shipping rates. That’s where strategic inventory distribution comes into play.

The best 3PLs offer true national fulfillment services by placing inventory in 4+ locations strategically across the country. The benefit to you is that these networks will cover 99%+ of US consumers with 2-day shipping at economy shipping rates. No matter where your customer wants their product shipped, you’ll have inventory nearby. They get their item lightning-fast, and you pay the cheapest possible rate.

User-Friendly Warehouse Management Software

If you can’t get real-time updates on the status of your orders, your inventory levels, and shipping and fulfillment costs, then you’re not working with a cutting-edge 3PL.

Older (and even some of the new) 3PLs can feel like a black box into which sellers send their inventory, and then they have no idea how much of what product they have left due to inconsistent communication.

The best 3PLs, on the other hand, have software that proactively notifies customers with critical information. Unfortunately, things go wrong all the time in the logistics world. It can be as simple as an undeliverable address input by a customer, and as complex as a worldwide shipping crunch. Your 3PL shouldn’t leave it up to you to find issues in fulfillment – for instance, the software should alert you when a customer places an order with an undeliverable address. You can then fix the issue with the address before it turns into a late shipment, and you’ll keep the customer happy.

Top-Tier Reliability

Reviews are your lifeblood, and a happy customer is a repeat customer. You probably can recall poor reviews and lost customers that were due to errors from your 3PL that you couldn’t control!

The best 3PLs almost never make mistakes thanks to the technology they use to ensure accurate and fast picking. Look for an on-time fulfillment rate of 99.9% or higher – anything less signals a 3PL that isn’t built for the rigorous demands of modern eCommerce.

Cahoot achieves zero-defect fulfillment with a mix of top-tier professionals and top-tier software. Our commitment to high standards starts with the warehouses that we accept into our network: we turn away many more than we accept, and we demand that they have a long track record of demanding ecommerce fulfillment environments like executing Seller Fulfilled Prime. Then, they install our rigorous software on top of their already excellent operations, and the result is a 3PL that leads the way with over 99.9% on-time fulfillment and 99.95% order accuracy.

Flexibility and Scalability

It shouldn’t be hard to connect your Amazon account and Shopify store to your 3PL – the best ones have pre-built integrations that will do it with a few clicks.

Ecommerce merchants are pushing into multiple sales channels to maximize growth, and your 3PL should be able to easily integrate with all of them. Their integrations make it easy to switch fulfillment and get up-and-running with the new service in no time.

Scalability goes past just easy integrations, though. Many 3PLs, and especially many of the newer “tech enabled 3PL networks”, are optimizing narrowly for only certain types of products. Certain 3PLs, for instance, specialize in the highly specific needs of merchants who sell and ship food products or electronics, both of which require more care and attention to detail than other goods.

The flexible Cahoot peer-to-peer fulfillment network, in contrast, can handle efficient retail replenishment as easily as it handles low-cost fast ecommerce fulfillment. We handle challenging beauty products’ fulfillment as readily as we excel in consumer packaged goods. Unlike others that have built or partnered one type of warehouse over and over across the country, we install our flexible software in warehouses with diverse specialties. The only common thread they have is their excellence. The result is that we scale our customers’ operations no matter their selling channel; for instance, some of our most successful customers are winning growth on Amazon, Shopify, and with retail stores like Nordstrom all at the same time.

Responsive Customer Service

Finally, you should be able to get in touch with your 3PL easily to troubleshoot challenges and come up with fixes. Look for a 3PL that offers you a real person to work with your account, and multiple ways to get in touch with them. If it’s a small issue, live chat will do. Thornier challenges, on the other hand, should be governed by a detailed ticket system. And of course, you need a phone line for critical issues.

Cahoot clients agree that our service team is the lifeblood of our 3PL. Our detailed but user-friendly onboarding process ensures that our merchants are able to smoothly transition from their previous fulfillment solutions, while also enabling us to get to know your business in detail to better fit your needs. With other big 3PLs, you’ll have to re-explain your business and its requirements every time you submit a ticket. With Cahoot, our US-based team takes the time to learn who you are and what you need to succeed, so that if an issue arises, they can get right down to fixing it immediately.

3PL vs. 4PL: What’s the Difference?

A 3PL provider manages a specific aspect of a business’s supply chain operations, such as inventory management or transportation. They focus on optimizing individual components of the supply chain to improve efficiency and reduce costs. On the other hand, a 4PL provider manages the entire supply chain, including multiple 3PL providers. Acting as a single point of contact for all logistics needs, a 4PL provider offers a more comprehensive and integrated logistics solution. They oversee the entire supply chain, from procurement to distribution, ensuring seamless coordination and optimization of all logistics operations. By managing the entire supply chain, a 4PL provider can provide businesses with a holistic approach to supply chain management, enhancing overall performance and efficiency.

Top 3PL Companies

Now that you know what to look for, how do a few of the top players in the industry stack up? We’ve provided a primer to help jump-start your research.

Fulfillment by Amazon (FBA)

FBA, the elephant in the room, is Amazon’s fulfillment solution for 3rd party merchants selling on their marketplace.

Amazon Buy with Prime

You can also use Amazon’s fulfillment network, FBA, to fulfill direct-to-consumer (DTC) orders from your own website. Buy with Prime is an extension of their existing service, Amazon Multi-Channel Fulfillment (MCF).

Walmart Fulfillment Services

Walmart Fulfillment Services (WFS) is Walmart’s fulfillment network for Marketplace sellers. In addition to fulfilling Walmart.com orders, Walmart now offers Multichannel Solutions so eligible WFS sellers can fulfill orders from other ecommerce channels as well.

ShipBob

ShipBob is a 3PL that focuses on serving eCommerce merchants. They have a nationwide network of fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping.

Red Stag Fulfillment

Red Stag Fulfillment is a more traditional 3PL, with only a few locations in the United States. They offer B2B fulfillment in addition to B2C, as they have a wider focus than eCommerce.

Cahoot: The Next Gen 3PL

Cahoot’s fulfillment network is built for eCommerce. We’ll help you delight your customers with a stellar, Amazon-like delivery experience while reducing the amount of time your team spends on operations. We support your growth, no matter where you sell – we have pre-built integrations with major marketplaces and shopping carts and we power efficient B2B fulfillment. Our tailored solutions help streamline supply chains, reduce costs, and improve customer satisfaction.

Our innovative peer-to-peer model offers low-cost, fast fulfillment by design. We’re “peer to peer” because our fulfillment network is made up of ecommerce sellers with excess capacity in their own, excellent operations. We help them fully utilize their capacity by fulfilling for other sellers like you, and as a result, our pricing is typically lower than that of other top providers listed above. Because we only add the best of the best warehouses to our network, we also beat the competition on fulfillment speed and reliability.

If you’d like to find out how Cahoot can help your business, please get in touch with us. We can’t wait to show you how easy operations can be.

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

The Health & Beauty industry is currently the fourth-largest retail category in the US and one of the fastest-growing consumer markets on the planet. Led by the Cosmetics and Skin Care categories, the industry has proven resilient, offering products that consumers just can’t get enough of.

Despite difficulties for brick-and-mortar retailers during the height of the COVID-19 pandemic, the beauty sector has remained resilient. McKinsey reported in 2024 that the global beauty market is expected to reach $590 billion by 2028, with projected annual growth of 6%. According to a McKinsey report, the market for beauty products is expected to reach $580 billion in 2027, up from $430 billion in 2022, with that growth coming almost entirely from the online market. In fact, it’s growing more quickly than the overall ecommerce market, showing great promise as a place where sellers can earn big returns if they get things right.

That being said, getting things right in beauty products fulfillment is no easy task. From climate controls to hazardous goods to high damage rates, cosmetics (and other beauty products) present significant challenges.

In this article, we’ll provide an inside look into what you need to look for in a 3PL warehouse that will support your profitable growth as a Health & Beauty seller.

What is Cosmetics Fulfillment?

Cosmetics fulfillment refers to the process of storing, managing, and shipping beauty and cosmetics products to customers. This critical aspect of the beauty industry encompasses a range of services, including receiving and storing inventory, processing orders, picking and packing products, and shipping them to customers. Effective cosmetics fulfillment is essential for maintaining customer satisfaction and fostering brand loyalty. In an industry where product quality and timely delivery are paramount, a well-executed fulfillment process ensures that beauty and cosmetics products reach customers in perfect condition, enhancing their overall experience and trust in the brand.

Definition of Cosmetics Fulfillment Services

Cosmetics fulfillment services are specialized logistics solutions tailored to meet the unique needs of beauty and cosmetics products. These services typically include:

• Climate-Controlled Storage: Ensuring that products are stored in optimal conditions to maintain their quality and freshness.
• Secure Packaging: Using robust packaging methods to prevent damage and leakage during transit.
• Expedited Shipping: Offering fast shipping options to meet customer expectations for timely delivery.
• Inventory Management: Implementing precise tracking and timely restocking to ensure product availability.
• Order Fulfillment: Efficiently processing and shipping orders to customers.

These services are designed to handle the specific requirements of beauty and cosmetics products, ensuring that they arrive in perfect condition and delight customers.

Importance of Efficient Fulfillment in the Beauty Industry

Efficient fulfillment is crucial in the beauty industry, as it directly impacts customer satisfaction and brand loyalty. Beauty brands that can deliver high-quality products quickly and efficiently are more likely to build trust and loyalty with their customers. In contrast, delayed or damaged shipments can lead to negative reviews and lost sales. By prioritizing efficient fulfillment, beauty brands can enhance their reputation, increase customer satisfaction, and foster long-term brand loyalty.

Benefits of Outsourcing Cosmetics Fulfillment

Outsourcing cosmetics fulfillment can bring numerous benefits to beauty brands, including:

• Cost Savings: Outsourcing fulfillment can help reduce labor and overhead costs associated with managing inventory and shipping products.
• Increased Efficiency: Specialized fulfillment providers can process orders and ship products more quickly and accurately than in-house teams.
• Scalability: Outsourcing fulfillment allows beauty brands to scale their business more easily, without having to invest in additional infrastructure and personnel.

By leveraging the expertise of specialized fulfillment providers, beauty brands can focus on their core business activities, such as product development and marketing, while ensuring that their logistics operations are handled efficiently and cost-effectively.

Scalable Services to Support Business Growth

Scalable fulfillment services are designed to support business growth by providing flexible and adaptable solutions that can adjust to changing demands. These services typically include:

• Flexible Inventory Management: Accommodating fluctuating demand to ensure product availability.
• Adjustable Shipping Options: Meeting changing customer expectations with a variety of shipping choices.
• Real-Time Tracking and Reporting: Monitoring inventory levels and shipping status to maintain transparency and control.
• Customized Packaging and Labeling: Enhancing brand image and customer experience with tailored packaging solutions.
• Reverse Logistics Handling: Facilitating a seamless returns process to minimize waste and optimize the consumer experience.

By outsourcing cosmetics fulfillment to a specialized provider, beauty brands can focus on their core business and leave the logistics to the experts. This can help improve customer satisfaction, increase brand loyalty, and drive business growth.

What You Need From Your Cosmetics 3PL

While there are many similarities between fulfilling online orders for Health & Beauty products and general consumer packaged goods, beauty products have special needs that many 3PL warehouses aren’t equipped to handle.

In this section, we’ll break down the added requirements that 3PLs need to excel in providing excellent beauty product order fulfillment.

Climate Controls For Beauty Product Fulfillment

One of the most important considerations when choosing an order fulfillment company is the type of climate conditions that your products will require. Certain types of cosmetics become damaged when they are stored in conditions that are too hot, cold, wet, or dry. Lipstick, some blushes, mascaras, cream-based shadows, and more can all melt when exposed to warm temperatures. Once these products reach a certain temperature, their consistency begins to change and may render the products unusable altogether.

Unfortunately, many 3PLs maintain warehouses at warmer temperatures in order to save money on air conditioning – which makes them too warm for cosmetics. And product loss in the warehouse isn’t even your biggest concern (though it’s enough to destroy an ecommerce business on its own). Even worse, your outsourced warehouse team likely won’t realize that products are damaged before they ship them out. That leads to a mass of customers all receiving damaged products at once, and when they take to social media to complain it will create a lasting negative impression of your brand.

Therefore, it’s critical that any 3PL warehouse that you choose is equipped to handle, store, and ship cosmetics in optimal climate conditions so that your customers are able to receive the very best version of your product.

A good rule of thumb is to ask your 3PL company whether they guarantee their warehouses at or close to room temperature. Since most cosmetics are designed to be stored in cool, dry conditions in a user’s vanity, they’re usually safe at 72 degrees. That being said, know your product! If it requires more precise heat regulation, then you need to be even more careful up-front with your 3PL.

Cahoot has a wide variety of temperature-controlled warehouses, perfect for storing sensitive goods such as cosmetics.

Hazardous Goods Storage & Handling

Certain beauty products also have special requirements when it comes to safety and proper handling. In particular, some fragrance products may require special handling because alcohol-based formulations can meet DOT flammable-liquid criteria, including Class 3 classification, depending on flash point, composition, packaging, and transportation mode.

Many 3PL warehouses avoid goods in hazard categories, as they either don’t want to take on extra risk or don’t have proper certifications for handling dangerous goods. Make sure that you’re up-front with the order fulfillment partners about the hazard classes that your goods fall into, or you risk wasting precious time and money sending them inventory that they legally can’t take.

We know that it can be hard to find a warehouse that not only accepts hazard class goods, but is built specifically for them. Cahoot ecommerce order fulfillment has intentionally curated warehouses with different specialties, including handling dangerous goods. We can go above and beyond to enable sellers with goods that have special handling needs.

Careful Packaging for Safe Shipping

One metric defines online seller profitability more than any other: customer lifetime value. With digital advertising becoming increasingly expensive, most sellers lose money on new customers. They’re only able to earn a positive bottom line through long-time repeat customers.

In Health & Beauty – perhaps more so than in any other industry – a fantastic post-purchase customer experience is critical to building repeat rates. Unfortunately, it’s more difficult to safely ship glass and fragile bottles than it is to ship other goods. So, the industry that most needs to minimize damage rates often has the hardest time doing so.

Unfortunately, many 3PLs that claim they can handle cosmetics and other beauty products treat them like any other good when it comes time to package them for shipping. This is insufficient: fragile items need extra time and care during packing.

Cahoot uses a combination of intelligent packing software and responsive customer service to get packaging right for the toughest goods to ship. We optimize for two things: we keep the package as small as possible to minimize shipping cost while also getting damage rates as close to 0% as possible. In this way, you save money on shipping while also ensuring that your customers are delighted when they open up their products every time.

Responsive Customer Service

Though responsive customer service is important for all online sellers, it’s especially important for a cosmetics 3PL given the above additional needs. As we’ve seen, Beauty & Health products have more unique shipping and handling needs, so you need to be able to get in touch with your 3PL’s customer service team quickly to feel confident that they know how to excel with your products.

Look for a 3PL company that offers you a real person to work with your account and multiple ways to get in touch with them. If it’s a small issue, live chat will do. Thornier challenges, on the other hand, should be governed by a detailed ticket system. And, of course, you need a phone line for critical issues.

Cahoot clients love our easy-to-reach and proactive customer service team. Our team is based in the USA, and they take the time to get to know your ecommerce business, so you don’t have to start at square one with a new person every time you submit a ticket. The close relationship we forge with our sellers is foundational to our ability to go above and beyond as a cosmetics 3PL.

Cahoot: The Best Cosmetics 3PL

Cahoot’s order fulfillment service network is built for the rigors of modern ecommerce. We’ll help you level the playing field with marketplaces and delight your customers with a stellar, Amazon-like delivery experience – no matter where you sell. We have pre-built integrations with major marketplaces, shopping carts, and ecommerce platforms to fuel your multi-channel growth.

Our innovative peer-to-peer model sets us apart by enabling us to offer low-cost, fast fulfillment by design. We recruit top-tier ecommerce merchants with their own warehouses to join our network as order fulfillment partners, and then our intelligent shipping software and control team keeps the whole system connected and running efficiently. Since we’re unlocking excess fulfillment capacity that was lying idle, we’re able to offer lower costs.

Critically for Health & Beauty sellers with the special handling needs we outlined above, we have a wide variety of merchants fulfilling for others as part of our network. Unlike other 3PLs that are building cookie-cutter warehouses designed to store easy-to-fulfill goods, we have specialists in temperature-controlled fulfillment, hazmat, and more. Our flexibility is part of what distinguishes us and makes us the best choice for sellers seeking a reliable cosmetics 3PL.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how beauty products order fulfillment was meant to be.

Frequently Asked Questions

How much do cosmetics and beauty fulfillment services cost?

Costs for cosmetics fulfillment vary, and depend on a number of factors. Package size and the specific packaging and storage requirements of a given product will influence fulfillment costs, whether fulfillment is handled in-house or utilizing 3PL services. Pricing for 3PLs will also depend on factors like order volume and the capacity and policies of the 3PL in question. For detailed, custom pricing options, it is best to engage directly with 3PLs to determine what solutions and savings they can provide.

What kinds of regulations govern cosmetics products in the United States?

Under MoCRA, responsible persons must report serious adverse events to FDA within 15 business days, and FDA now has mandatory recall authority for certain noncompliant cosmetic products. While cosmetics products do not require approval from the Food and Drug Administration (FDA), they are regulated by that body. Ingredients, labeling, effective dates, and product warning labels are all regulated by the FDA. For information about regulations that may impact your products, consult the FDA website.

What factors should I consider when picking a 3PL partner for my cosmetics fulfillment?

Finding the best fulfillment partner for you requires balancing general and cosmetic-specific needs for your product. Pricing, specialized storage and packaging solutions, order volume, and available locations for fulfillment centers are all important considerations. To find out if Cahoot can help you optimize your fulfillment strategy, speak to a representative about our custom fulfillment solutions.

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

The best ecommerce brands and Sellers are constantly looking for new sales channels to expand their footprint. Most people think of Macy’s and its sister brand Bloomingdale’s as retailers that are heavily focused on their brick-and-mortar stores and trail well behind the likes of Amazon in ecommerce. Therefore, they are likely not the first names that come to a merchant’s mind when they consider expanding beyond Amazon. However, in recent years, Macy’s has begun to catch on to the surge in ecommerce and realizes that it represents an opportunity through which it can boost sales and revive stalling growth.

In Macy’s FY23 customer highlights, the company reported 41.2 million active customers and 30.1 million active Star Rewards member accounts. In 2022, Macy’s reported around 45 million active shoppers, of which 29.1 million were Star Rewards members – a sizable audience for an online seller to target. In a bid to increase the product mix that it offers, the company launched its online third-party marketplace in late 2022. Unlike Amazon’s marketplace, where nearly anyone can start selling, Macy’s platform is curated. Macy’s platform facilitates ecommerce opportunities for vendors by allowing them to manage their inventory effectively and optimize their fulfillment processes. This could be done to ensure they serve their customers with the brands and products they think will most appeal to them. If you’re reading this, it probably means you’ve been selected by them to feature your assortment – congratulations!

One of the key benefits of this 3rd Party Marketplace is its Vendor Direct Program – which allows merchants to receive orders that customers place on Macy’s website, and fulfill those orders on their own. This offers significant advantages for a couple of reasons.

Understanding 3PL and Macy’s Fulfillment Needs

What Is Third-Party Logistics (3PL)?

Third-party logistics (3PL) refers to the outsourcing of various logistics and supply chain functions to an external service provider. This can include services such as warehousing, transportation, inventory management, and order fulfillment. By leveraging the expertise and infrastructure of a 3PL provider, Macy’s vendors can delegate critical components like warehousing and order fulfillment, allowing them to focus on their core business. In essence, third-party logistics providers take on the heavy lifting of logistics, enabling Macy’s vendors to concentrate on what they do best – creating and selling great products.

Benefits of Outsourcing Macy’s Order Fulfillment

Outsourcing Macy’s order fulfillment can bring numerous benefits, including improved operational efficiency, increased customer satisfaction, and cost savings. By partnering with a 3PL provider, Macy’s vendors can tap into their expertise and technology, ensuring seamless integration with the Macy’s platform and efficient order processing. This means that orders are processed quickly and accurately, reducing the likelihood of errors and delays. Additionally, 3PL providers offer flexible and scalable fulfillment services, allowing Macy’s vendors to adapt to changing market demands and customer preferences. This flexibility is crucial in today’s fast-paced retail environment, where customer expectations are constantly shifting. By outsourcing fulfillment services, Macy’s vendors can ensure that they are always ready to meet these expectations, leading to higher customer satisfaction and loyalty.

Why is The Macy’s Vendor Direct Program Great For Sellers?

Simplified Inventory Management

As Macy’s allows Sellers to fulfill their orders independently, you do not need to send some of your inventory to a Macy’s warehouse. This is a welcome relief for Sellers who might already have sent some inventory to Fulfilled By Amazon (FBA) or Walmart Fulfillment Services (WFS), and are overwhelmed by keeping track of all these different marketplace-specific order fulfillment solutions. Macy’s allows you to manage your order fulfillment entirely on your own, just like you might be doing for your Shopify storefront, for example. This ensures that you don’t have to work with another logistics solution that is specific to a single sales channel.

Whatever The Logistics Setup, Everyone Has a Fair Chance

Amazon’s A10 algorithm for search rankings, as well as the Buy Box algorithm, both assign high preference to listings that are fulfilled by the company’s in-house FBA logistics network. Additionally, when delays or issues occur with FBA, Amazon faces no penalties – whereas Sellers fulfilling their own orders face severe penalties if they or the carriers they rely on make a mistake, including having their product listings suspended. With Macy’s, there is no such competing network that stacks the odds against you – everyone competes equally, and the brands with the best products who achieve the highest order fulfillment excellence will win.

While all this offers Sellers and their businesses operational and strategic advantages, the program still has high expectations from participating brands. Your choice of a 3rd Party Logistics Provider is a crucial factor in determining your success, and there are a few key factors to consider.

What Should You Look For in Macy’s Fulfillment Services?

Full Compliance With Macy’s Vendor Direct Fulfillment (VDF) Tech Stack

Macy’s requires vendors to support its approved order/document workflows through CommerceHub or direct EDI, depending on the setup. Within 1 hour of a purchase order being made, Sellers must push acknowledgment to Macy’s via this integration. Also, the order must be shipped within 2 business days, and merchants must push confirmation that the order was fulfilled to Macy’s via this connection (with carrier tracking information). Your Macy’s 3PL fulfillment partner must be able to work with this configuration and ensure your orders are shipped on time. Collaborating with third-party logistics (3PL) providers allows you to streamline operations and improve customer satisfaction for Macy’s orders.

Flexibility to Work With Macy’s Carrier Accounts

Macy’s will provide you with a UPS account which must be used exclusively for fulfilling VDF orders. Your 3PL partner must be able to have the flexibility and agility in both their software and operations which supports Sellers bringing their own accounts.

Ultrafast Shipping

Macy’s requires that 98.5% of orders are shipped (leave the warehouse) in under 2 business days. However, the consumer expectation today is for fast, free shipping across every channel. Whether you operate from a single warehouse that you own or lease, or work with a traditional 3PL that only has 1 or 2 fulfillment centers, covering the entire country from a limited number of locations becomes extremely challenging. Additionally, under Macy’s current VDF standards, Sellers can only pick from UPS SurePost or Ground services to fulfill orders. Imagine if your 3PL only has a California fulfillment center, but you have to ship orders to New York – customers will have to wait 4-5 business days to get their order in the era of ultrafast same or next-day delivery. With a platform like Cahoot, you can leverage a network of strategically located warehouses to place your inventory closer to your end customers and shorten delivery speeds.

Adherence to Macy’s Packing Requirements

The little things are often the most important; merchants are required to place a Macy’s branded packing slip inside every carton shipped to customers. You need a fulfillment partner that is fully aware of all these requirements and will sweat the details to ensure you are compliant with all aspects of the VDF program.

Responsive and Reliable Customer Support

As part of the VDF program, Macy’s audits and reviews the performance of Sellers in the program – any mistakes or errors that your 3PL commits directly affect your brand reputation, the Macy’s customer experience, and your ability to remain an approved vendor. It becomes essential to have a customer support team that is responsive and ready to quickly resolve any issues that you may run into.

Experience Working With Macy’s Sellers

As we mentioned before, Macy’s marketplace is curated – meaning that it’s exclusive and there are not a large number of brands or Sellers approved to participate, unlike Amazon. This therefore means there are a limited number of order fulfillment services out there that have experience working with merchants who are part of Macy Vendor Direct. Make sure to identify a company that has demonstrable social proof of its track record supporting Macy’s merchants. Here’s what one of our customers, Glo International, had to say about their experience shipping Macy’s orders with Cahoot:

The Role of Logistics in Customer Satisfaction

Effective logistics and fulfillment processes are the central components to achieving success in the Macy’s marketplace. When customers place an order, they expect it to be delivered accurately and on time. Any delays or errors in the fulfillment process can lead to dissatisfaction and potentially harm the brand’s reputation and ability to continue in the VDF program. By working with a reliable 3PL provider, Macy’s vendors can ensure that their warehousing and order fulfillment processes are optimized for speed and accuracy, prioritizing early shipment and delivery wherever possible (what cahoot calls ‘preponing’, the opposite of postponing). A well-executed logistics strategy will not only meet but exceed your customer’s expectations, leading to repeat business and greater lifetime customer value.

Top Macy’s 3PL Companies

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels, such as Macy’s, whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels. Ecommerce Sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels.

ShipBob

ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for ecommerce, they have an easy-to-use shipping software platform and a large set of pre-built integrations.

Cahoot: The Best Macy’s 3PL

Cahoot’s order fulfillment network is built for the future of ecommerce. Our network of warehouses is strategically located at different locations in the US, enabling Macy’s merchants to offer ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs (including the ones that the typical Amazon fulfillment center may struggle to process) – small, lightweight, seasonal, slow-moving, heavy, and oversized.

We are also fully compliant with the Macy’s technology and packing requirements – and provide you the flexibility to use the Macy’s UPS account provided to you without any hidden fees. Lastly, our US-based customer service team is always available if something needs to be addressed, ensuring that sales are uninterrupted and that you enjoy a successful partnership with Macy’s.

		Traditional 3PL
Compliant with Macy VDF Tech Stack
Flexibility to use Macy’s UPS account
Ultrafast nationwide shipping
Great Customer Support

Cahoot is committed to helping Macy’s Sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

Summary

Macy’s Vendor Direct (often called Macy’s Marketplace) is Macy’s curated third-party marketplace. Launched in Fall 2022 (powered by Mirakl), it allows external sellers to list on Macy’s website and ship directly to customers. Macy’s has aggressively grown this channel to fill assortment gaps without inventory risk. At launch (Sep 2022), the marketplace gave customers access to 400 brands across 20 categories, many new to Macy’s. A Mirakl case study notes that Macy’s “added 2,000+ brands” via the new marketplace, with digital marketplace sales spiking 145% quarter-over-quarter in FY 2023. Macy’s continues to treat marketplace as part of its broader owned-plus-licensed-plus-marketplace growth strategy (the effort continues under its “A Bold New Chapter” strategy). In mid-2023, Macy’s also opened a Bloomingdale’s Marketplace (a circuit of Macy’s higher-end brand), which onboarded ~120 sellers by year-end. The company continues to invest: expanding the marketplace assortment and even integrating some products into stores, demonstrating that its marketplace has become a major growth vector.

Macy’s marketplace is invite-only/approval-only. Sellers must be vetted for brand fit and logistical readiness. The program is similar to Nordstrom’s drop-ship (Macy’s calls it Vendor Direct Fulfillment), but uses a marketplace billing model: Macy’s pays sellers after the sale (minus commission). Notably, Macy’s includes marketplace items in its Star Rewards loyalty program, incentivizing customers to buy. Sellers get access to Macy’s marketing and promotional events once active.

Table 1. Summary of the Macy’s Vendor Direct Program Requirements

Invitation and Onboarding Process

Macy’s invites vendors through merchant outreach. There is no public signup form; interested sellers typically contact the Macy’s merchant team or go through a partner (e.g., an ecommerce consultant). Once engaged, Macy’s provides the Vendor Direct Fulfillment (VDF) Agreement and technical specs. Onboarding involves setting up EDI/CommerceHub for receiving orders (Macy’s sends 850 POs) and sending ASNs (856) and invoices (810). Vendors must configure Macy’s UPS account (to bill Macy’s prepaid account) and submit W-9/tax info. Mirakl is used for catalog management; vendors upload product data with Macy’s taxonomy and await SKU approval. Initial authorization is granular by category; most sellers start with a few core categories. In practice, onboarding took a few months for initial sellers: a Deloitte report noted that at launch, Macy’s marketplace offered 400 brands in 20 categories (including eight new-to-Macy’s categories). After system setup and trial orders (Macy’s often does sample orders), the vendor goes live and begins shipping real customer orders.

Common Fulfillment Pitfalls

Even established vendors can struggle with Macy’s strict requirements. Common errors include late shipments and poor PO/invoice handling. For example, if a vendor does not ship (or cancels) within 2 days, Macy’s sends a late notice and may cancel the order if unaddressed. Some vendors incur expense offsets by accidentally using a non-Macy’s UPS account. Another frequent mistake is improper labeling: every carton must contain Macy’s-branded packing slips with both order and shipment numbers; failure to include these details complicates tracking and delays payment. Returns also cause issues: vendors sometimes forget to confirm returns within 2 days, delaying customer refunds.

Support Tip: Use a partner or software with built-in Macy’s compliance, such as Cahoot. A CommerceHub or Mirakl integration will automatically generate correct packing slips and transmit PO/ASN. Establish a daily routine to check Macy’s order portal and email alerts (Macy’s sends automated notices if any EDI response is missing). Maintain inventory accuracy to avoid cancellations, and process returns quickly.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Macy’s order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in a 3PL that can help you with fulfillment, check out some of our other articles:

1. How to Choose the Best 3PL for Your Shopify Store
2. How to Choose the Best 3PL for Wayfair
3. How to Choose the Best 3PL for Target Plus
4. How to Choose the Best 3PL for the Nordstrom Direct Drop Ship Program

Frequently Asked Questions

What carrier does Macy’s use for shipping?

Macy’s says it uses UPS, USPS, DoorDash, and other regional carriers as required, including FedEx, VEHO, Lasership, OnTrac, DHL, and DoorDash’s Parcel service.

What is 3PL in retail?

3PL stands for third-party logistics, also known as order fulfillment. A 3PL warehouse provides a full range of ecommerce fulfillment services, including storage, order processing, shipping, and receiving. Many 3PL warehouses provide value-added services such as returns processing, cross docking, or kitting.

How many distribution centers does Macy’s have?

Macy’s currently operates 25 fulfillment centers across the U.S and continues to invest in its fulfillment and supply-chain network, including large automated facilities that support omnichannel and digital operations. In September 2023, the retailer opened a new 908,000-square-foot distribution center in Tomball, Texas, before leasing a 272,000-square-foot facility in Lathrop, Calif. in January 2024.

What is Macy’s biggest competitor?

The main competitors of Macy’s include Dillard’s (DDS), Nordstrom (JWN), Kohl’s (KSS), JC Penney, Burlington Stores (BURL), and Target (TGT).

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.

Nordstrom is one of the most iconic department stores in the US. Nordstrom has over 9 million shoppers each year. For most people, the first thing that comes to mind when they think of Nordstrom are its brick and mortar stores. The company serves American customers through its over 350 locations. Most ecommerce sellers might therefore ignore the retailer in pursuit of players with a larger digital presence, such as Amazon or Walmart. However, online is becoming an increasingly important part of Nordstrom’s operations – according to Statista, each year since 2020 over 35%+ of Nordstrom’s annual sales were driven through digital channels.

Nordstrom’s Direct Drop Ship program is a way for sellers to access this large segment of shoppers. Through the program, sellers can feature their product assortment on Nordstrom’s website. When customers place orders on Nordstrom, merchants must pick, pack and ship the products either from their own warehouse, or through a 3rd Party Logistics Provider (3PL) to the customer.

Before we dive into how and why you can find this 3PL partner, it’s worth asking an important question – why is the program worth doing?

Why is the Direct Drop Ship Program Great?

Nordstrom’s Direct Drop Ship Program has several powerful benefits for participating sellers:

Invite-only Marketplace Where You Can Grow Sales

Nordstrom’s Direct Drop Ship program is currently invite only – like the 3rd party marketplaces at Macy’s and Target. Nordstrom may be doing this to simplify the product assortment customers see, making it easier for them to find things they really like. For sellers, this is great because it provides access to Nordstrom customers with much less competition compared to a sales channel like Amazon, where nearly anyone can sell.

Nordstrom Provides Full Assistance With EDI Integration

Nordstrom requires transmission of information between themselves and their sellers through Electronic Data Interchange (EDI). The company does this through a CommerceHub platform called DropShip Commerce (DSCO). Whenever purchase orders are received, Nordstrom will transmit the information via EDI to the seller. Similarly, sellers must pass updates from their side (acknowledgements of Purchase Orders, Advance Shipment Notifications with tracking information etc.) through the DSCO platform.

Some retailers require the seller to take care of configuring this technology on their dropshipping programs. Nordstrom provides both the platform and assistance in integrating it with their systems.

Nordstrom Covers All Shipping Costs

One of the great advantages of the program is that shipping fees are paid for by Nordstrom. While other elements of order fulfillment, such as packaging and storage fees are still the responsibility of the seller, shipping labels are a significant cost that Nordstrom takes off their shoulders.

Sellers must make sure that they use the UPS billing account that Nordstrom provides them – so long as merchants comply with this, they will be reimbursed shipping costs across a variety of services – including Ground, 3 Day Select, 2nd Day Air and Next Day Air Saver.

Understanding Nordstrom’s Requirements

Nordstrom has specific requirements for its trading partners, including EDI compliance, timely order fulfillment, and accurate inventory management. To ensure a smooth partnership, it’s essential to understand these requirements and implement them effectively.

Trading Partner Requirements

As a trading partner with Nordstrom, you’ll need to meet certain requirements, such as:

• Timely Order Fulfillment: Nordstrom expects its trading partners to fulfill orders promptly and accurately, ensuring that customers receive their products on time. Meeting these expectations is crucial for maintaining customer satisfaction and upholding Nordstrom’s reputation for reliability.
• Accurate Inventory Management: Trading partners must maintain accurate inventory levels to prevent stockouts and overstocking. Proper inventory management helps ensure that products are always available for purchase, which is vital for keeping customers happy and maintaining a smooth supply chain.
• EDI Compliance: Nordstrom requires its trading partners to be EDI-capable, which involves exchanging electronic documents, such as purchase orders and invoices, in a standardized format. This ensures seamless communication and data exchange between Nordstrom and its partners, reducing errors and improving efficiency.

Integration Options

To integrate with Nordstrom’s systems, you’ll need to consider the following options:

Integrate with Ecommerce Platforms

Nordstrom requires its trading partners to integrate with its ecommerce platform, which involves connecting your online store to Nordstrom’s system. This integration enables you to:

• Receive Purchase Orders Electronically: By integrating with Nordstrom’s ecommerce platform, you can receive purchase orders directly into your system, streamlining the order processing workflow and reducing manual data entry.
• Send Shipment Notifications and Tracking Information: Integration allows you to send shipment notifications and tracking information to Nordstrom automatically. This ensures that customers are kept informed about the status of their orders, enhancing their shopping experience.
• Update Inventory Levels in Real-Time: Real-time inventory updates help you maintain accurate stock levels, preventing overselling and stockouts. This integration ensures that Nordstrom always has up-to-date information about your inventory, which is crucial for maintaining a smooth supply chain.

By integrating with Nordstrom’s ecommerce platform, you can improve the efficiency of your order fulfillment process and ensure that you meet Nordstrom’s requirements. This seamless connection helps you provide a better customer experience and maintain a strong partnership with Nordstrom.

What Should You Look for in a Nordstrom 3PL?

Due to Nordstrom’s stringent requirements, many sellers find it simpler and more profitable to rely on an established 3PL that is already familiar with and comfortable meeting Nordstrom’s requirements. This way sellers can reap the benefits of participating in Nordstrom’s Direct Drop Ship program without having to completely retool their inventory storage and order workflows.

Maintain a Fulfillment Rate of 98%

Nordstrom requires that sellers keep cancellations extremely low – 98% of orders must be fulfilled before the defined due date on the DSCO system.

Traditional 3PLs that operate with a single warehouse location may not be ideal – in the event of any disruption at that location (extreme weather, carrier services disruption etc.), your ability to ship products on time to customers will be impacted.

Additionally, traditional 3PLs may be limited to basic spreadsheets or worse, manual bookkeeping to keep track of your inventory. If you run out of stock and purchase orders continue flowing in, you will be forced to cancel them, affecting your fulfillment rate metrics. Cahoot’s software intelligently decrements the count of inventory as it leaves our warehouses and provides color-coded alerts to you on a dashboard so that you always replenish products in time to keep your sales going.

Ability to Ship 97% of Orders On-Time

Nordstrom defines its shipping SLAs based on whether the order requires Standard or Expedited Shipping.

Achieving this high level of performance comes down to ensuring that your fulfillment partner has excellent pick/pack and order fulfillment practices to get every order out within time.

Make sure to conduct extensive research into the standards at your 3PL’s warehouse. On Cahoot’s order fulfillment network, warehouses must pass a 44-point checklist to be eligible to fulfill orders for our sellers.

Have an Existing UPS Account, and Experience Working With the Carrier

Nordstrom requires that sellers ship all Nordstrom orders on their own UPS account, which is connected to your, or your 3PL’s UPS account. In order to meet Nordstrom’s fulfillment metrics, your 3PL must have experience working with UPS to ensure that daily pickups and carrier scans are conducted in a timely fashion, thereby streamlining your Nordstrom order fulfillment.

Help You Meet Nordstrom’s Eco-Friendly Packaging Standards

In Nordstrom’s words, they ‘strive to be an environmentally friendly company’. They also encourage sellers to avoid excess packaging.

With many traditional 3PLs, you may find that items often ship in boxes larger than the SKU actually needs. The problem is that most traditional 3PLs have a very limited configuration of boxes of standard sizes. Items are simply thrown into the next available box, without taking care to identify if it is truly the most optimal one.

The problem worsens with Multi-Line, Multi-Quantity (MLMQ) Orders. These orders can often be unnecessarily split into multiple boxes. With Cahoot’s MLMQ automation features, our system learns from SKU and box dimension data, as well as past data to intelligently identify the most optimal box for every order.

This ensures that you save costs across every order, while also meeting Nordstrom’s (and the customer’s) expectation for more environmentally responsible, sustainable packaging.

Fully Compliant With Nordstrom Packing Slip Requirements

Nordstrom requires every shipment sent to customers to have a branded packing slip, as well as a return label (Nordstrom bears all shipping costs).

This is an example of what a Nordstrom packing slip looks like:

This is what a Nordstrom return label looks like:

Your 3PL fulfillment partner must ensure strict compliance with retailer SLAs, including same-day or next-business-day shipping, accurate inventory synchronization, and timely shipment confirmations, as failure to meet these requirements can result in order cancellations or removal from Nordstrom’s Direct Drop Ship program. For example, Nordstrom may cancel orders entirely if they are not shipped within one business day, making fulfillment speed and accuracy critical to maintaining program eligibility.

Fully Compliant with Nordstrom EDI Technology

The 3PL must be able to work with the Direct Drop Ship Program’s tech stack (DSCO platform) and ensure that you comply with all the requirements around data transmission to Nordstrom.

Benefits of Working with a 3PL

Working with a third-party logistics (3PL) provider can help you meet Nordstrom’s requirements and improve your overall business operations. Some benefits of working with a 3PL include:

• Improved Order Fulfillment: 3PLs specialize in order fulfillment and can help you meet Nordstrom’s timely fulfillment requirements. Their expertise in logistics ensures that orders are processed and shipped efficiently, reducing the risk of delays and errors.
• Enhanced Inventory Management: 3PLs can help you manage your inventory levels more effectively, reducing the risk of stockouts and overstocking. With advanced inventory management systems, 3PLs provide real-time visibility into your stock levels, helping you make informed decisions about replenishment and stock allocation.
• Increased Efficiency: 3PLs can streamline your logistics operations, freeing up time and resources for you to focus on growing your business. By outsourcing logistics to a 3PL, you can concentrate on core business activities such as marketing, product development, and customer service.

Responsive, Reliable Customer Support

Order fulfillment is a complex operation, involving multiple, intricate steps in the process from click to delivery. Things don’t always go as planned, but what is crucial is ensuring that your 3PL has a responsive, reliable customer support team whom you can rely on to fix problems fast, with minimal disruption to your business operations.

Experience Working with Nordstrom Sellers

Most traditional 3PLs may not have personnel with the experience and expertise working with Nordstrom to troubleshoot and fix problems fast – costing you precious time and sales. It is important to identify a Nordstrom fulfillment partner with a reliable, responsive customer support team – who will be ready to dive in and solve problems quickly, so that you’re always selling and keeping your customers happy.

Here’s what one of our customers had to say about Cahoot’s Support team:

So now that we’ve taken a look at the important criteria that guide your choice of a 3PL for Nordstrom, let’s look at the options that are actually available to you, and the pros and cons of each of them:

Top Nordstrom 3PL Companies

Amazon Multi-Channel Fulfillment

Amazon Multi-Channel Fulfillment (MCF) is Amazon’s outsourced fulfillment service for merchants selling on non-Amazon sales channels, such as Nordstrom, whereby Amazon handles the picking, packing, and shipping of the orders coming from those sales channels.

Ecommerce sellers can store their inventory at Amazon’s warehouses, and MCF will fulfill the non-Amazon orders from select channels. MCF deploys the same infrastructure and resources that power Amazon’s in-house Fulfilled By Amazon (FBA) logistics network.

ShipBob

ShipBob is a 3PL that focuses on serving ecommerce merchants. They have a nationwide network of order fulfillment centers that enable fast shipping, but they charge extra for guaranteed 2-day shipping. Built for ecommerce, they have an easy-to-use shipping software platform and a large set of pre-built integrations.

Cahoot: The Best Nordstrom 3PL

Cahoot is committed to helping Nordstrom sellers grow their businesses with fast and affordable ecommerce order fulfillment services.

Cahoot’s peer-to-peer order fulfillment network is built for the future of ecommerce. Our network of warehouses is located at strategic locations across the US, enabling Nordstrom Direct Drop Ship merchants to offer their customers ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs (including the ones that the typical Amazon Fulfillment Center may struggle to process) – small, lightweight, seasonal, slow-moving, heavy, and oversized.

We are compliant with all aspects of the Nordstrom Direct Drop Ship program – and provide you the flexibility to use the Nordstrom UPS account provided to you without any hidden fees. Our US-based customer service team is always available if something needs to be addressed, ensuring that sales are uninterrupted and that you enjoy a successful partnership with Nordstrom.

Bringing Cherished Stories to Life

Growth is a good problem to have – but how do you make sure it doesn’t bury you?

Cali’s Books creates and sells innovative children’s books that bring stories to life with interactive sounds and songs. What started as a dedicated mom working out of her garage has grown to an organization of colleagues around the world producing hundreds of unique books and fulfilling tens of thousands of orders each month.

Cali’s growth has taken off in diverse channels: Amazon, their Shopify store, and retailers like Nordstrom. Before Cahoot, they relied on a complex fulfillment strategy with multiple different partners to try to fulfill orders across their different channels.

Summary

Nordstrom’s Direct Drop Ship program is an invite-only channel that lets select vendors list products on Nordstrom.com and ship directly to customers. It is highly curated and supported; vendors need strong brand fit and logistics to qualify.

Table 1. Summary of the Nordstrom Drop Ship Program Requirements

Invitation and Onboarding Process

Nordstrom does not accept unsolicited sign-ups: new sellers join only by invitation from the Nordstrom buying team or merchant development group. Ideal candidates have strong brand recognition or a unique assortment that fits Nordstrom’s curation. In practice, Nordstrom will meet with a vendor (or 3PL) to review operations and the catalog. Once invited, the vendor signs a drop-ship agreement, provides required documents (U.S. business tax ID, W-9, etc.), and connects via the provided DSCO (CommerceHub) account. Nordstrom supports vendors through the EDI onboarding (often via a 3PL or system integrator). After DSCO integration, vendors load item data (UPC-based inventory), learn Nordstrom’s fulfillment requirements, and gradually activate SKUs on the site. The approval timeline is vendor-specific, but DSCO integration and system validation typically take 4–12 weeks for a completed setup.

Public accounts are scarce, but industry reports highlight Nordstrom’s emphasis on quality and its flexible integration. For example, Nordstrom adopted the Dsco/CommerceHub platform to streamline onboarding – one case study noted an onboarding rate of ~40 vendors/month (a 4× productivity increase) once DSCO was in place. Retail sources confirm Nordstrom covers all shipping fees (so sellers ship via Nordstrom’s UPS account) and imposes no late-shipment penalties.

Growth (2022–2025)

Nordstrom’s drop-ship channel remains much smaller than Amazon’s or Walmart’s. The company does not publicly report vendor counts. However, insiders note steady growth: by using DSCO, Nordstrom accelerated onboarding (one report cited a 4× increase in speed). Nordstrom executives have said drop-ship suppliers tend to increase overall buying from vendors rather than cannibalize sales. In practice, Nordstrom carefully adds only dozens of new vendors per year to keep the assortment curated. In summary, while Nordstrom’s digital sales are growing (>35% of sales online), the invite-only drop-ship program has expanded cautiously, focusing on apparel, shoes, and home categories without rampant expansion.

Common Fulfillment Pitfalls

New Nordstrom drop-shippers often falter on timeliness and compliance. Failing to ship within 1 day or to cancel unshippable orders promptly will lead to order cancellations (Nordstrom will cancel and not pay for late shipments). Other common issues include using the wrong shipping account (vendors must use Nordstrom’s UPS account to get paid), submitting invoices late, or incorrectly mapping items (SKU mismatches lead to payment delays). Vendors must carefully follow Nordstrom’s SKU/UPC data requirements and DSCO transaction formats. Return handling can also trip up sellers as Nordstrom only provides a single Return Authorization (RA) number for drop-ship returns, so vendors should have processes to handle returns without individual RAs.

Support Tip: Integrate with Nordstrom’s DSCO early and engage Nordstrom Drop Ship Operations if any order goes awry. Confirm all POs via DSCO (997 EDI) and ship notices quickly. Keep a live point of contact with Nordstrom’s team during onboarding. Some sellers have found that working through Nordstrom-approved 3PL partners (like Cahoot) simplifies DSCO integration and ensures compliance with Nordstrom’s gift-wrap and packing requirements. If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Nordstrom order fulfillment was meant to be.

If you’d like to find out how Cahoot can help your ecommerce business, please get in touch with us. We can’t wait to show you how Nordstrom order fulfillment was meant to be.

If you are selling on multiple sales channels and are interested in 3PLs that can help you with fulfillment, you can read our other articles:

1. How to Choose the Best 3PL for Your Shopify Store
2. How to Choose the best 3PL for Your Macy’s Orders
3. How to Choose the Best 3PL for Target Plus
4. How to Choose the Best 3PL for Wayfair

Frequently Asked Questions

What is Nordstrom’s Direct Drop Ship Program?

Nordstrom’s Direct Drop Ship Program allows vendors to ship products directly to Nordstrom customers, bypassing Nordstrom’s warehouses. This program enables Nordstrom to expand its product offerings without holding inventory, while vendors like you manage fulfillment and shipping while meeting Nordstrom’s strict compliance standards.

What carrier does Nordstrom use for shipping?

Nordstrom requires sellers to use their own UPS account for all Nordstrom orders.

What is a 3PL?

3PL stands for third-party logistics, also known as order fulfillment. A 3PL warehouse provides a full range of ecommerce fulfillment services, including storage, order processing, shipping, and receiving. Many 3PL warehouses provide value-added services such as returns processing, cross docking, or kitting.

How many distribution centers does Nordstrom have?

Nordstrom currently operates over 350 stores across the U.S. These stores also fulfill online orders and act as shipping locations. In addition, each seller participating in Nordstrom’s Drop Ship Program also can act as a distributor for orders placed on Nordstrom.

What is Nordstrom’s biggest competitor?

The main competitors of Nordstrom (JWN) include Dillard’s (DDS), Macy’s (M), Neiman Marcus (private), and Saks Fifth Avenue (SKS).

Written By:

Jeremy Stewart

Jeremy Stewart leads customer success at Cahoot, helping merchants achieve high-performance logistics through smart technology and process optimization. With a background in both ecommerce operations and client services, Jeremy ensures that every merchant using Cahoot gets measurable results—whether they’re scaling from one warehouse to many or managing complex returns.

Wayfair is commonly referred to as the “Amazon of the Furniture and Home Goods” industry. Wayfair reported 21.3 million active customers as of December 31, 2025, underscoring the platform’s scale within the home goods and furniture category. Wayfair has managed to retain its dominance in the Furniture and Home Goods category despite these massive competitors. Wayfair reported $3.3 billion in net revenue in Q4 2025.

Wayfair’s business model is similarly unique. While Amazon has invested heavily in building its inhouse logistics network and Walmart and Target are slowly growing ecommerce in addition to the brick and mortar channel that fueled their growth, Wayfair is different. Wayfair relies heavily on a dropshipping model. In this model, when Wayfair customers place orders, the orders are sent directly to sellers to be picked, packed, and shipped. Wayfair describes drop-shipping as its primary method of fulfillment. This reliance on dropshipping makes efficient fulfillment services essential for Sellers working with Wayfair to ensure timely delivery and customer satisfaction.

Why Selling on Wayfair is Great for Ecommerce Merchants

Wayfair offers unique selling opportunities for sellers that other marketplaces don’t.

Lesser Competition Than on Other Marketplaces

Wayfair’s supplier ecosystem is more curated than broad open marketplaces, but supplier-count comparisons in this area should be reviewed against current official marketplace disclosures before publication. This allows brands to be much more prominently featured and visible to customers, enabling increased sales and profitability.

No Marketplace Referral Fees

Wayfair buys products from its suppliers at wholesale prices and then charges retail prices to its end customers. This can be a more attractive model to sellers, compared to the referral fee based model that Amazon operates on.

Wayfair Covers Shipping Fees

Like other marketplaces, Wayfair covers the cost of shipping for its sellers: all shipments are billed to Wayfair’s Small Parcel (FedEx), LTL or White Glove shipping accounts. Merchants can either choose to use prepaid shipping labels from Wayfair or print their own shipping labels and then bill Wayfair for the associated charges.

Issues and Problems with Selling on Wayfair

Selling on Wayfair can be lucrative but there are challenges and downsides sellers must navigate. Here are some of the most common issues and problems sellers face:

1. Wayfair Controls Final Pricing

Unlike other marketplaces where sellers set their own prices, Wayfair includes the shipping cost in the customer facing price meaning they control the final retail price.

2. Automated Pricing Algorithm

Wayfair uses an automated algorithm to adjust listing prices dynamically. This can lead to unpredictable price changes and lower margins without seller consent.

3. Price Competition

Large brands and established manufacturers dominate product categories, along with many sellers adopting a low price, high volume strategy, making it difficult for new sellers to gain visibility.

4. Listing Visibility

Wayfair visibility can be challenging for newer suppliers because established products and operational performance matter, but Wayfair does offer partner advertising programs, including pay-per-click ads, through Partner Home. As a result, newer sellers often struggle to get noticed.

5. No Branded Storefronts

Unlike on Amazon and Walmart, Wayfair does not allow sellers to create branded storefronts. This limits a seller’s ability to build brand recognition and customer loyalty, as all products are displayed under Wayfair’s branding rather than the seller’s business identity.

6. Strict Policy Compliance

Sellers must adhere to Wayfair’s stringent policies regarding product quality, shipping times, and return policies. Failing to comply with these regulations can result in penalties, product delistings, or even account suspension.

7. Customer Service

Wayfair requires sellers to provide rapid responses to customer inquiries. Delays in communication or failure to resolve customer issues promptly can negatively impact a seller’s standing on the platform.

8. Strict Listing Requirements

Wayfair has rigid listing guidelines that sellers must follow. These include detailed product descriptions, high-quality images, and accurate specifications. Listings that do not meet Wayfair’s standards may be rejected or removed from the platform.

9. High Return Rates

Wayfair has a customer-friendly return policy, which often translates into higher return rates for sellers. Since sellers are responsible for handling returns and associated costs, frequent returns can erode profit margins and create logistical challenges.

10. Large Item Shipping Challenges

Wayfair specializes in home goods, furniture, and large items, which can present shipping challenges. Sellers must ensure proper packaging, coordinate with freight carriers, and manage potential damages during transit. Shipping delays or damage claims can lead to customer dissatisfaction and financial losses.

11. Market Fluctuations

The home goods and furniture industry is highly susceptible to market fluctuations, seasonal demand shifts, and economic downturns. The US housing market also impacts customer demand for furniture and home goods. These factors can affect sales volume, pricing stability, and overall profitability for sellers on Wayfair.

What to Look for in a Wayfair 3PL?

Sellers participating in Wayfair can be profitable, but requires careful planning. Sellers must manage logistics, pricing, and meet Wayfair’s standards and regulations. This can be overwhelming and partnering with an experienced 3PL can ensure participation with Wayfair is profitable and stress-free. Here are some of the features a 3PL provides:

Automated Inventory Level Monitoring

Sellers on Wayfair are encouraged to send Inventory Feeds (updates on how much stock of product is available at warehouses) as frequently as possible. This is because Wayfair wants to ensure a good customer experience by only shipping products that are in-stock.

With traditional 3PLs, stockkeeping of inventory levels is often conducted on spreadsheets, or worse, by hand. These inefficient tools create many problems in staying on top of the inventory levels in warehouses.

If a business takes on more orders than it can fulfill, fails to ship all assigned orders, and is forced to cancel, it can damage relationships with both Wayfair and customers. Such cancellations may lead to penalties, loss of trust, and a negative impact on future sales opportunities.

With Cahoot’s intelligent software, inventory is automatically decremented and provides color-coded alerts as inventory starts running out of stock – this ensures proactively replenishing inventory and boosting sales, rather than scrambling to fix problems.

Ability to Offer Late Same Day Cut Offs

Wayfair encourages sellers to deliver a great experience to their customers by ensuring that order cut-off and shipment pickup times are set as late as possible, so that customers can experience fast shipping. This might also be Wayfair’s attempt to keep themselves competitive and relevant in the era of ultrafast fulfillment.

Most traditional 3PLs struggle to meet the demanding expectations from today’s customers. Cahoot is used to meeting expectations for late same-day cutoffs, weekend pickups and deliveries through our expertise in helping Amazon sellers thrive on the Seller Fulfilled Prime (SFP) program. Through our network’s best-in-class fulfillment capabilities, sellers meet and surpass the expectations of Wayfair customers.

Minimum Lead Time – Every SKU Ships Fast

If an order containing different SKUs needs to ship in separate shipments, Wayfair expects merchants to proactively communicate that to customers. However, today’s demanding customer expects ultrafast order fulfillment across every SKU. To meet these expectations, shippers must ensure their 3PL deploys excellent pick-pack practices, have high-quality fulfillment services, and order fulfillment operations in their warehouses.

Consider working with a partner like Cahoot – to fulfill orders for our sellers, a warehouse must pass a 44-point checklist. This ensures that only the very best fulfillment centers join our network. These fulfillment centers are well equipped to handle a variety of SKUs – small, light, slow and fast-moving, heavy, larger-sized and seasonal.

Responsive, Reliable Customer Support

Needless to say, order fulfillment is a complex operation, and things don’t always go to plan. When issues arise, customers and Wayfair won’t blame the 3PL; the merchant is held accountable and the merchant’s relationship and brand equity is at stake with these key stakeholders. While setbacks can occur, it is crucial to ensure that the 3PL offers responsive and reliable customer support to address problems swiftly and restore normal operations with alacrity.

Most traditional 3PLs lack personnel with either the experience or expertise required to quickly troubleshoot issues. It is essential to identify 3PLs with a dedicated and qualified support team ready on hand to resolve problems, ensuring business operations remain uninterrupted and increasing in sales volume and profitability.

Cahoot – The Best 3PL for Wayfair

Cahoot’s peer-to-peer order fulfillment network is built for the future of ecommerce. Our network of warehouses is located at strategic locations across the US, enabling Wayfair merchants to offer their customers ultrafast shipping. Our fulfillment centers are well equipped to handle all types of SKUs – including heavier, seasonal, larger-sized and slow moving ones. Cahoot’s services come with transparent pricing and no hidden fees.

Cahoot is compliant with all expectations Wayfair has from its dropshippers. Our US based customer support team is always ready and responsive to ensure that order fulfillment operations are running smoothly at all times. Cahoot is committed to helping Wayfair sellers grow their businesses with fast and affordable ecommerce order fulfillment service.

To find out how Cahoot can help ecommerce businesses grow, please get in touch with us. We can’t wait to show how Wayfair order fulfillment was meant to be. Businesses selling on multiple sales channels can also see how Cahoot can help with fulfillment in our other articles:

1. How to Choose the Best 3PL for Shopify
2. How to Choose the best 3PL for Macy’s Orders
3. How to Choose the Best 3PL for Target Plus
4. How to Choose the Best 3PL for the Nordstrom Direct Dropship Program

Frequently Asked Questions

Is Selling on Wayfair Worth it?

Selling on Wayfair can be worth it for businesses that specialize in home goods, furniture, and décor. The platform provides access to a large customer base, but it operates differently from traditional marketplaces like Amazon or eBay. Wayfair uses a drop-ship model, meaning sellers don’t directly sell to customers but instead supply products that Wayfair markets and sells.

How do I Sell on Wayfair?

Wayfair does not allow just anyone to list products. First, sellers need to submit an application to the Wayfair Partner Program and be approved.

What is a Wayfair 3PL?

A Wayfair 3PL (Third-Party Logistics) provider is an external company that handles warehousing, fulfillment, and shipping on behalf of Wayfair suppliers. Since Wayfair operates on a drop-ship model, many sellers use 3PL services to manage storage and deliveries efficiently. This helps meet Wayfair’s strict shipping requirements, improve delivery speed, and reduce logistics costs.

How Much Does It Cost to Ship for Wayfair?

Wayfair typically covers shipping costs but requires sellers to price their products accordingly to absorb these costs. There are no direct shipping fees to Wayfair, but suppliers are responsible for ensuring competitive pricing that includes fulfillment expenses.

Written By:

Indy Pereira

Indy Pereira helps ecommerce brands optimize their shipping and fulfillment with Cahoot’s technology. With a background in both sales and people operations, she bridges customer needs with strategic solutions that drive growth. Indy works closely with merchants every day and brings real-world insight into what makes logistics efficient and scalable.