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3PL and Fulfillment Glossary

Plain-English definitions of the warehousing, shipping, EDI, returns and pricing terms ecommerce brands run into when they work with a 3PL.

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All Terms

Fulfillment Terms, Explained

Returns, Compliance and Costs

3PL Minimums

3PL minimums are the lowest order volume or monthly spend a fulfillment provider requires, with fees charged if a brand falls short.

Business and Channels

3PL Onboarding

3PL onboarding is the setup process of moving a brand onto a new 3PL, including connecting stores, sending inventory and going live.

Returns, Compliance and Costs

3PL Setup Fees

3PL setup fees are one-time charges some fulfillment providers bill to onboard a new brand, such as account creation and integration work.

Business and Channels

3PL (Third-Party Logistics)

A 3PL is an outside company that stores a brand's inventory and picks, packs and ships its orders on the brand's behalf.

Business and Channels

4PL (Fourth-Party Logistics)

A 4PL is a company that manages a brand's entire supply chain, coordinating multiple 3PLs, carriers and suppliers rather than running warehouses itself.

Orders and Shipping

Address Correction Fee

An address correction fee is a charge carriers add when they must fix an incorrect or incomplete delivery address to complete a delivery.

Inventory and Warehousing

ASN (Advance Shipping Notice)

An ASN is an electronic notice sent before a shipment arrives that lists its contents, quantities and packaging so the receiver can prepare.

Business and Channels

B2B Fulfillment

B2B fulfillment is shipping inventory to other businesses, such as retailers and distributors, usually in larger cartons or pallets under specific rules.

Inventory and Warehousing

Backorder

A backorder is a customer order for an item that is currently out of stock, accepted with the promise to ship once new inventory arrives.

Orders and Shipping

Batch Picking

Batch picking is a method where one picker collects items for several orders in a single trip through the warehouse, then sorts them by order.

Returns, Compliance and Costs

Batch Traceability

Batch traceability is the ability to track a specific production batch or lot from receiving through to the customer orders it shipped in.

Returns, Compliance and Costs

Best-By Date

A best-by date is the date a manufacturer suggests a product will be at its best quality, used to manage freshness and inventory rotation.

Orders and Shipping

Billable Weight

Billable weight is the weight a carrier uses to price a shipment, usually the greater of the package's actual weight and its dimensional weight.

Returns, Compliance and Costs

Bill of Lading

A bill of lading is a document issued by a carrier that records the goods shipped, confirms receipt and sets the terms of transport.

Inventory and Warehousing

Bin Location

A bin location is a specific, labeled storage spot in a warehouse where a SKU is kept, identified by a code that tells staff exactly where to find it.

Orders and Shipping

Branded Packaging

Branded packaging is shipping and product packaging customized with a brand's logo, colors or messaging to create a recognizable customer experience.

Orders and Shipping

Carrier Pickup

A carrier pickup is when a shipping carrier collects packages directly from a warehouse or business, rather than the shipper dropping them off.

Inventory and Warehousing

Case Pack

A case pack is the standard number of identical units a manufacturer packs into one shipping case, such as 24 bottles per case.

Returns, Compliance and Costs

Cost Per Order

Cost per order is the average total cost to fulfill one customer order, calculated as total fulfillment spend divided by orders shipped.

Inventory and Warehousing

Cross-Docking

Cross-docking is moving inbound goods directly from receiving to outbound shipping with little or no time spent in storage.

Returns, Compliance and Costs

Customs Broker

A customs broker is a licensed professional or firm that prepares and files customs entries and helps importers comply with import rules.

Inventory and Warehousing

Cycle Count

A cycle count is a routine count of a small set of inventory locations or SKUs, done on a rolling schedule instead of counting everything at once.

Inventory and Warehousing

Dead Stock

Dead stock is inventory that has not sold for a long period and is unlikely to sell, tying up cash and storage space.

Returns, Compliance and Costs

De Minimis

De minimis is a customs threshold below which low-value imports may enter with reduced duties or paperwork; the US suspended duty-free treatment in 2025.

Orders and Shipping

Dimensional Weight

Dimensional weight is a pricing measure carriers use that converts a package's length, width and height into a weight, so large light boxes cost more to ship.

Business and Channels

Distribution Center

A distribution center receives goods in bulk and redistributes them, usually to stores or other sites, rather than to individual shoppers.

Returns, Compliance and Costs

Drayage

Drayage is the short-distance trucking of shipping containers, typically between a port or rail yard and a nearby warehouse or terminal.

Business and Channels

Dropshipping

Dropshipping is a retail model where a seller lists products it never stocks, and a supplier ships each order directly to the customer.

Business and Channels

DTC (Direct-to-Consumer)

DTC, or direct-to-consumer, is a business model where a brand sells to customers through its own channels instead of through retailers.

Business and Channels

Ecommerce Fulfillment

Ecommerce fulfillment is the process of receiving, storing, picking, packing and shipping online orders to customers, plus handling returns.

Business and Channels

EDI 810 Invoice

An EDI 810 is the electronic invoice a supplier sends a retailer to bill for goods shipped against a purchase order.

Business and Channels

EDI 850 Purchase Order

An EDI 850 is the electronic purchase order a retailer sends a supplier, listing the items, quantities, prices and shipping details it wants.

Business and Channels

EDI 856 Advance Ship Notice

An EDI 856, or advance ship notice, tells a retailer exactly what is in a shipment, how it is packed and when it will arrive, before it arrives.

Business and Channels

EDI (Electronic Data Interchange)

EDI is a standardized way for businesses to exchange documents like purchase orders, ship notices and invoices electronically between their systems.

Returns, Compliance and Costs

Exchange

An exchange is a return in which the customer receives a replacement item, such as a different size or color, instead of a refund.

Orders and Shipping

Expedited Shipping

Expedited shipping is any faster-than-standard carrier service, such as two-day, next-day or overnight delivery, offered at a higher price.

Inventory and Warehousing

Expiration Date Tracking

Expiration date tracking is recording the expiry or best-by date of inventory so stock can be rotated, monitored and shipped before it goes bad.

Business and Channels

Faire Wholesale

Faire is an online wholesale marketplace where independent retailers order products from brands, which then ship those wholesale orders to stores.

Returns, Compliance and Costs

FDA-Registered Facility

An FDA-registered facility is a site that has registered with the US Food and Drug Administration because it handles products such as food or supplements.

Inventory and Warehousing

FEFO (First-Expired, First-Out)

FEFO is an inventory method that ships the units with the earliest expiration date first, regardless of when they were received.

Inventory and Warehousing

FIFO (First-In, First-Out)

FIFO is an inventory method where the oldest stock received is the first stock sold or shipped.

Returns, Compliance and Costs

Freight Forwarder

A freight forwarder is a company that arranges the transport of goods for shippers, booking carriers and coordinating documents across each leg of a shipment.

Returns, Compliance and Costs

FTL Freight

FTL (full truckload) freight is a shipping method where one shipper uses an entire trailer, usually moving directly from pickup to delivery.

Orders and Shipping

Fuel Surcharge

A fuel surcharge is a variable carrier fee, usually a percentage of the shipping charge, that adjusts with fuel prices.

Business and Channels

Fulfillment Center

A fulfillment center is a warehouse built to store inventory and ship individual orders quickly to customers, typically for ecommerce brands.

Returns, Compliance and Costs

Fulfillment Cost

Fulfillment cost is the total cost to store, pick, pack and ship customer orders, including warehouse fees, packaging and postage.

Business and Channels

Fulfillment Partner

A fulfillment partner is an outside company, usually a 3PL, that a brand relies on to store inventory and ship orders as an extension of its team.

Orders and Shipping

Ground Shipping

Ground shipping is a cost-effective carrier service that moves packages by truck, typically delivering in one to five business days depending on distance.

Returns, Compliance and Costs

HS Code (Harmonized System Code)

An HS code is a standardized number used worldwide to classify traded goods, which customs authorities use to apply duties and collect trade data.

Returns, Compliance and Costs

Import Duties

Import duties are taxes a government charges on goods brought into a country, usually calculated from the product's classification, value and origin.

Returns, Compliance and Costs

Incoterms

Incoterms are standard trade terms published by the International Chamber of Commerce that define seller and buyer responsibilities in a shipment.

Business and Channels

Influencer Seeding

Influencer seeding is sending free products to creators and influencers, without a paid deal, in the hope they share them with their audiences.

Inventory and Warehousing

Inner Pack

An inner pack is a smaller group of units packaged together inside a larger case or master carton, such as six units bundled within a 24-unit case.

Inventory and Warehousing

Inventory Reconciliation

Inventory reconciliation is comparing recorded stock levels with physical counts and other systems, then investigating and correcting any differences.

Inventory and Warehousing

Inventory Shrinkage

Inventory shrinkage is the loss of inventory between what records say should be on hand and what is physically there, caused by errors, damage or theft.

Inventory and Warehousing

Inventory Turnover

Inventory turnover measures how many times a business sells and replaces its inventory over a period, showing how quickly stock moves.

Inventory and Warehousing

Kitting

Kitting is assembling multiple individual items into a single ready-to-ship package or kit that is sold and fulfilled as one product.

Returns, Compliance and Costs

Landed Cost

Landed cost is the total cost of getting a product to its destination warehouse, including product cost, freight, insurance, duties, fees and handling.

Orders and Shipping

Last-Mile Delivery

Last-mile delivery is the final step of shipping, when a package moves from a local carrier facility to the customer's door.

Returns, Compliance and Costs

Long-Term Storage Fees

Long-term storage fees are extra charges some warehouses and marketplaces apply to inventory that has been stored beyond a set age threshold.

Inventory and Warehousing

Lot Number

A lot number is an identifier a manufacturer assigns to a batch of products made together, used to trace that batch through the supply chain.

Inventory and Warehousing

Lot Tracking

Lot tracking is the practice of recording which production batch each unit belongs to so it can be traced from receiving to the customer.

Returns, Compliance and Costs

LTL Freight

LTL (less-than-truckload) freight is a shipping method where several shippers' smaller loads share space on one truck, with costs split by usage.

Business and Channels

Marketplace Fulfillment

Marketplace fulfillment is shipping orders that customers place on third-party marketplaces, while meeting each marketplace's shipping rules.

Inventory and Warehousing

Master Carton

A master carton is the large outer shipping box that holds multiple units, inner packs or case packs of a product for transport and storage.

Business and Channels

Multichannel Fulfillment

Multichannel fulfillment is fulfilling orders that come from more than one sales channel, such as a website, marketplaces and social shops.

Business and Channels

Omnichannel Fulfillment

Omnichannel fulfillment is shipping orders from every sales channel, such as a website, social shop and retailers, from one shared and synced inventory.

Orders and Shipping

Order Accuracy Rate

Order accuracy rate is the percentage of orders shipped with exactly the right items and quantities to the right customer, without errors.

Orders and Shipping

Order Cutoff Time

An order cutoff time is the daily deadline by which an order must be placed to be picked, packed and shipped that same business day.

Orders and Shipping

Order Fulfillment Time

Order fulfillment time is how long it takes from when a customer places an order until it ships, or sometimes until it is delivered.

Business and Channels

Order Management System (OMS)

An order management system, or OMS, is software that collects orders from every sales channel and routes, tracks and updates them in one place.

Inventory and Warehousing

Overselling

Overselling happens when a store accepts more orders for a product than there is inventory available to fulfill them.

Orders and Shipping

Packing Slip

A packing slip is a document included in a shipment that lists the items, quantities and order details so the recipient can check what arrived.

Inventory and Warehousing

Pallet

A pallet is a flat, portable platform, usually wood or plastic, used to stack, move and store goods with a forklift or pallet jack.

Returns, Compliance and Costs

Peak Season Planning

Peak season planning is preparing inventory, operations and shipping for high-volume periods like the holidays so orders ship on time.

Orders and Shipping

Peak Season Surcharge

A peak season surcharge is a temporary carrier fee added during high-volume periods, such as the winter holidays, when shipping networks are strained.

Orders and Shipping

Pick and Pack

Pick and pack is the warehouse process of pulling ordered items from storage, packing them into a shipping container and preparing the parcel to ship.

Returns, Compliance and Costs

Pick Fee

A pick fee is the charge a 3PL bills to retrieve items from storage for an order, often a per-order fee plus a fee for each additional item.

Orders and Shipping

Poly Mailer

A poly mailer is a lightweight, flexible plastic shipping envelope used for soft, non-fragile items like apparel, often cheaper to ship than a box.

Inventory and Warehousing

Pre-Order

A pre-order is an order placed for a product before it is released or in stock, with shipping scheduled for when inventory arrives.

Business and Channels

Private Label

Private label is when a manufacturer produces goods that another company sells under its own brand name.

Inventory and Warehousing

Product Bundling

Product bundling is selling two or more products together as a single offer, often at a combined price, to increase order value or simplify buying.

Inventory and Warehousing

Putaway

Putaway is the warehouse step of moving received inventory from the dock to its assigned storage location and recording where it was placed.

Orders and Shipping

Rate Shopping

Rate shopping is comparing shipping rates across carriers and services for each order to choose the best price for the required delivery speed.

Inventory and Warehousing

Real-Time Inventory Sync

Real-time inventory sync is automatically updating stock levels across every sales channel as inventory changes, so each one shows accurate availability.

Inventory and Warehousing

Receiving

Receiving is the warehouse process of accepting inbound inventory, checking it against what was expected and recording it so it can be sold.

Returns, Compliance and Costs

Receiving Fees

Receiving fees are what a warehouse charges to unload, count, inspect and check in a brand's inbound inventory before it is available to sell.

Inventory and Warehousing

Reorder Point

A reorder point is the inventory level at which a brand places a new purchase order so stock arrives before the current supply runs out.

Orders and Shipping

Residential Surcharge

A residential surcharge is an extra carrier fee added when a package is delivered to a home rather than a business address.

Returns, Compliance and Costs

Restocking

Restocking is the process of returning inspected, sellable units, such as customer returns or replenishment stock, back into available inventory.

Business and Channels

Retail Compliance Chargeback

A retail compliance chargeback is a fee or deduction a retailer charges a supplier for breaking its shipping, labeling or documentation rules.

Business and Channels

Retailer Routing Guide

A retailer routing guide is a rulebook that tells suppliers exactly how to pack, label, document and ship orders to that retailer.

Returns, Compliance and Costs

Return Disposition

Return disposition is the decision about what happens to a returned item, such as restocking, refurbishing, liquidating, donating or disposing of it.

Returns, Compliance and Costs

Return Rate

Return rate is the percentage of units or orders sold that customers send back, calculated as returns divided by sales over the same period.

Returns, Compliance and Costs

Returns Management

Returns management is the set of policies, tools and warehouse processes a brand uses to accept, inspect, resolve and restock customer returns.

Returns, Compliance and Costs

Reverse Logistics

Reverse logistics is the process of moving products back from customers to the brand for return, repair, resale, recycling or disposal.

Orders and Shipping

Right-Sized Packaging

Right-sized packaging means using a box or mailer that closely fits the product, reducing empty space, packing material and dimensional weight charges.

Returns, Compliance and Costs

RMA (Return Merchandise Authorization)

An RMA (Return Merchandise Authorization) is an approval and tracking number a seller issues before a customer sends a product back.

Inventory and Warehousing

Safety Stock

Safety stock is extra inventory kept on hand as a buffer against unexpected demand spikes or supplier delays so a product does not run out.

Orders and Shipping

Same-Day Shipping

Same-day shipping means an order is picked, packed and handed to the carrier on the same business day it is placed, as long as it arrives before the cutoff.

Business and Channels

Service Level Agreement (SLA)

A service level agreement, or SLA, sets the measurable performance standards a provider commits to, such as ship times and order accuracy.

Orders and Shipping

Shipping Label

A shipping label is the label on a package showing the destination, return address, service level, tracking barcode and routing details for the carrier.

Orders and Shipping

Shipping Zones

Shipping zones are carrier-defined distance bands between a package's origin and destination, used to set postage rates; farther zones cost more.

Business and Channels

Shopify Fulfillment

Shopify fulfillment is the process of shipping orders from a Shopify store, either in-house or through a 3PL connected to the store.

Inventory and Warehousing

SKU (Stock Keeping Unit)

A SKU is a unique code a business assigns to each distinct product variant so it can be tracked, stored, picked and reordered accurately.

Orders and Shipping

Split Shipment

A split shipment is when one customer order is sent in two or more separate packages, often because items ship from different places or at different times.

Inventory and Warehousing

Stockout

A stockout happens when a product has no available inventory to sell or ship, so customer orders cannot be filled.

Returns, Compliance and Costs

Storage Fees

Storage fees are what a warehouse charges to hold a brand's inventory, usually billed by bin, shelf, pallet or cubic foot over a set period.

Business and Channels

Store Integration

A store integration is a connection between an online store and a warehouse system that syncs orders, inventory and tracking automatically.

Business and Channels

Subscription Box Fulfillment

Subscription box fulfillment is assembling and shipping recurring boxes to subscribers, often in large batches on a set schedule.

Business and Channels

TikTok Shop Fulfillment

TikTok Shop fulfillment is shipping orders placed through TikTok Shop, meeting the platform's shipping timelines and tracking requirements.

Orders and Shipping

Tracking Number

A tracking number is a unique code assigned to a shipment that lets the shipper and customer follow its progress through the carrier's network.

Orders and Shipping

Two-Day Shipping

Two-day shipping is a delivery option in which an order arrives within two business days after it ships, often using air or regional ground networks.

Orders and Shipping

Unboxing Experience

The unboxing experience is everything a customer sees and feels when opening an order, from packaging and presentation to inserts and product condition.

Orders and Shipping

Void Fill

Void fill is packing material, such as kraft paper or air pillows, used to fill empty space in a box so products do not shift or break in transit.

Inventory and Warehousing

Warehouse Management System (WMS)

A warehouse management system is software that tracks inventory and directs warehouse work, from receiving and putaway to picking, packing and shipping.

Orders and Shipping

Wave Picking

Wave picking is a warehouse method that releases groups of orders for picking at scheduled times, often timed around carrier pickups or shipping cutoffs.

Business and Channels

White-Label Fulfillment

White-label fulfillment is when a 3PL ships orders under the brand's identity, using the brand's packaging and inserts rather than its own.

Business and Channels

Wholesale Fulfillment

Wholesale fulfillment is packing and shipping bulk orders from a brand to retailers or resellers who then sell the products to consumers.

Orders and Shipping

Zone Picking

Zone picking divides a warehouse into areas, with each picker responsible for one zone and orders passed between zones until they are complete.

Keep Exploring

Related Resources

Fulfillment Cost Calculator

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Pricing

Published rates for pick and pack, storage and returns.

3PL Switching Checklist

Step-by-step checklist for moving to a new 3PL.

FAQ

Glossary Questions

Still unsure? Call (310) 415-7759 and talk to the team that packs your orders.

What is this glossary for?

It explains the terms you'll see in 3PL quotes, contracts and warehouse reports, so you can compare providers and plan your operations with confidence.

What is a 3PL?

A 3PL, or third-party logistics provider, stores your inventory and picks, packs and ships your orders for you. Matrix is a 3PL in Los Angeles that ships same day on orders placed by 2 PM Pacific.

What's the difference between fulfillment and pick and pack?

Pick and pack is one step: pulling the items for an order and packing them. Fulfillment is the whole job, from receiving and storing inventory to picking, packing, shipping and handling returns.

What is dimensional weight?

Dimensional (DIM) weight is a billing weight carriers calculate from a package's length, width and height. When it's higher than the actual weight, you pay for the DIM weight, which is why right-sized packaging saves money.

How fast can we start shipping?

We onboard brands within 24 to 48 hours. Same-day shipping starts as soon as your inventory is received and counted.

What does fulfillment cost?

Pick and pack starts at $1.50 per order plus $0.35 per additional item, dropping as low as $0.50 per order at volume. Bin storage is $0.25 per day, and there are no setup or platform fees.

Where is your warehouse?

Our warehouse is in Los Angeles, California, close to the Port of Long Beach. Orders in by 2 PM Pacific ship the same day.

Can I talk to someone instead?

Yes. Call (310) 415-7759 or email hello@matrixfulfillment.com and you'll reach our team directly.

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