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Third-Party Logistics (3PL)

Do you make use of Local Fulfilment or Third-Party Logistics (3PL)?

Modern e-commerce customers expect short delivery times and predictable, standardised delivery terms. For that reason, many e-commerce sellers rely on third-party logistics (3PL) partners to manage fulfilment.

What is 3PL?

3PL services will often involve storing your goods in fulfilment centres. It’s an effective way to quickly deliver your goods to customers throughout Europe.

However, in terms of EU regulations, when you move your goods in a 3PL warehouse, you generally will be required to register for VAT in the country in which your goods are stored. If the service involves warehouses in multiple countries, you may be required to register and file for VAT in each country.

3PL and Drop Shipping

For online retailers, 3PL and drop shipping are two very different ways of getting your goods to customers.

Most obviously, the logistics of each look very different. In the case of drop shipping, the goods will generally be outside of the EU at the time that the sale is made. The goods will then be imported into the EU and delivered directly to the customer.

In the case of 3PL, goods are located in an EU fulfilment centre at the time of sale. When the sale is made, the 3PL provider will manage packing and delivery.

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Do you want to learn more about the 3PL? Read our e-commerce blog posts on Third-Party Logistics here.

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As a specialist company, our expertise in
international VAT compliance is unmatched.

As a technology-driven company, we ensure that expertise is supported by cutting edge digital tools
to make compliance faster and more efficient and eliminate human error. The ultimate effect is to render the
complexity of global VAT compliance simple, allowing our clients to focus on growing the core areas of their business.

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