Shopify Markets vs. 3PL
Choosing the Right Route for International Expansion
Expanding internationally sounds exciting: new markets, bigger audiences, fresh revenue streams. But in reality, cross-border growth comes with difficult decisions that directly affect margins, operations, and customer experience.
One of the biggest is this: Do you manage international sales and duties inside Shopify Markets, or do you outsource fulfilment to a third-party logistics partner (3PL)?
There’s no single right answer. Both routes can work, but they come with different costs, levels of control, and operational complexity. We’ve been helping clients work through these options, and here’s how we’d approach the decision.
Shopify Markets: Expanding Within Your Store
Shopify Markets is Shopify’s built-in toolkit for cross-border selling. It handles pricing, currency conversion, taxes, and duties directly within your store. This means you can manage international sales without outsourcing operations. That means:
Cost efficiency: You avoid warehouse contracts, fixed logistics fees, and unnecessary complexity. It makes your logistics simpler and more cost-efficient.
Control: Pricing, duties, and taxes are calculated and collected at checkout. You decide whether to show duties up front (Delivered Duty Paid) or leave them to customers (Delivered Duty Unpaid).
Integration: Since it’s built directly into Shopify, you can manage everything in one place without additional dashboards or external providers.
But there are limitations:
International delivery speed is only as good as your existing shipping setup. If customers expect two-day delivery in Germany or next-day in New York, Shopify Markets alone won’t be enough.
Duties and tax automation take time to set up. Clean data is critical. If your SKUs, HS codes (also HTS Codes - a 10 digit code used by the the US & UK), or product weights aren’t accurate, the calculations will be wrong. That can mean customers are overcharged, undercharged, or parcels are held at customs.
Getting this right often requires groundwork on product data, but once in place, it makes international checkout far smoother.
Customer experience can suffer if couriers don’t handle DDP correctly.
For many small-to-medium brands, Shopify Markets is the leaner option: less initial investment, more control, and fewer complexities.
3PL: Outsourcing Fulfilment for Scale
Third-party logistics (3PL) partners store your stock in-country, pick and pack orders, and ship them locally. For customers, it feels like buying from a domestic brand. They benefit from faster delivery, reduced shipping costs, and a smoother customs process.
Where 3PLs make sense:
High-volume orders: If you’re consistently shipping thousands of parcels to a specific region each month, local fulfilment options can lower the costs per unit.
Fast delivery promises: Next-day delivery in the US or EU is only realistic through local warehouses.
Returns handling: Customers can return items to a local warehouse instead of dealing with the cost and inconvenience of cross-border shipping. That means cheaper postage for them, quicker turnaround times for you, and fewer support queries about delayed or lost returns.
But you’ll need to balance these benefits against the downsides:
Cost: 3PLs come with setup fees, minimum order volumes, and ongoing storage/fulfilment charges. These can erode margins quickly.
Control: You’re relying on a partner to manage your stock accurately, despatch on time, and maintain service quality. If standards slip, it reflects directly on your brand.
Complexity: Whether it’s your own sites or 3PL facilities, managing multiple warehouses means keeping stock levels aligned across locations, ensuring inventory data syncs correctly, and making sure orders flow smoothly into each system.
When you also factor in courier integrations, returns handling, and reporting, the operational load increases quickly. Without careful management, it can lead to overselling, stock shortages, or delays that frustrate customers.
For enterprise-scale brands, or those where speed is critical, 3PLs can make sense. But they’re not always the right answer.
Hidden Costs and Integration Challenges
Whether you choose Shopify Markets or a 3PL, there are less obvious costs to factor in:
Integration: With a 3PL, keeping stock levels, product codes, and order data in sync across systems can be messy. If updates lag or errors creep in, it can lead to overselling or items going out of stock.
Customer support: If duties aren’t set up correctly in Shopify, or if a 3PL misses a delivery promise, it usually results in more customer queries. Both approaches can create extra work for your team, even if the problem starts elsewhere.
Flexibility: Shopify Markets allows you to adjust pricing or duties relatively quickly. 3PL contracts, by contrast, often tie you in. That lack of flexibility can come at a cost. It makes it harder (and sometimes more expensive) to adapt to changing market conditions.
When to Choose Shopify Markets vs. 3PL
A good way to frame the decision is to think about your stage of growth:
Shopify Markets is usually the better starting point if you’re testing a new region, working with low-to-medium order volumes,shipping times are less important or you want to keep operations lean. It’s cheaper, simpler, and gives you more control.
3PLs become more relevant once order volumes climb into the thousands each month, fast delivery is central to your brand promise, or international returns are eating into margins.
In practice, most brands don’t stick with just one approach forever. Many begin with Shopify Markets to test the waters, then add 3PL support once demand in a region is strong enough to justify the investment.
The Squashed Pixel Point of View
We’ve seen brands commit to 3PL contracts too early, only to find margins squeezed by inflexible, fixed costs and complex integrations. On the other hand, we’ve seen teams stick with Shopify-only setups even as customer expectations have outgrown what shipping directly from the UK can realistically deliver.
Our advice is to map what success should look like 12 months from now, not just today. If the goal is to test a market, Shopify Markets can help you do that quickly and cost-effectively. If the goal is long-term scale and growth in a region, it’s worth preparing for the stage where a 3PL is the logical next step.
At Squashed Pixel, our role is to give you a balanced view of the options, so you can approach international growth with confidence.
