There comes the point in the life of many eCommerce businesses to realize that they do not have the skills, knowledge, or time to do everything on their own and turn to other companies for help. Most often, they’ll look to 3PL or third-party logistics for help with those tasks that they aren’t able to or won’t. If you’re just beginning to learn about the eCommerce industry and are wondering what exactly a 3PL provider is, what kind of services they can offer and what are 3PL advantages
Table of Content
What are 3PLs?
3pl stands for third-party logistics , is the term used to describe outsourcing logistics procedures to third-party businesses, such as warehouse management, inventory management, and fulfillment. 3PL companies allow online merchants to achieve more, using the infrastructure and tools to streamline the fulfillment of orders for retail.
We’re not certain who came up with the idea of “third-party logistics,” but companies began outsourcing outbound and inbound logistic services to third-party providers during the 1970s and the 1980s.
Due to the rise and development of e-commerce in the 1990s and 2000s, the word 3PL has become commonplace, and 3PLs have diversified their offerings. The integration of the supply chain, the warehousing operation, and the transportation service are what we refer to as third-party logistics.
Five Benefits of Using 3PL Providers for Ecommerce
After you’ve learned the basics of 3PLs, let’s look at the principal advantages they can provide eCommerce businesses.
1. Cost Savings
Shipping and storage are among the most expensive costs for eCommerce retailers. If they partner with 3PLs 3PL, the requirement for space and the costs to maintain or rent it, in addition to costs for overheads–can be reduced or eliminated. In the case of shipping, 3PLs have partnerships with shipping companies which means that they can offer discounted prices that are transferred to customers.
Furthermore, many 3PLs operate from multiple locations; therefore, they can deliver products from the location closest to the client (the fewer zones the product is transported through, the lower it costs).
2. Experience
Logistics is the main focus of 3PLs. 3PL. Utilizing one, you’ll be able to gain the wisdom of their professionals and benefit from the latest technology and software they’re using. For instance, the employees of 3PL are experts in pick-and-pack and are aware of the most effective ways to deliver your product to the customer. They’ll also utilize the most up-to-date technology, offering top-of-the-line security and tracking, processing payments, and much more.
3. Reach
Some eCommerce companies feel restricted by their locale and are either local or national, unaware of international regulations and rules. Many 3PLs operate globally and allow businesses to promote their brands to a worldwide market. According to estimates, the market for digital purchasing worldwide at over 2 billion and counting; thinking beyond the boundaries can make a difference!
4. Customer Service
The ability to handle exchanges, returns, and refunds are as crucial as selling the product. Of course, many smaller eCommerce companies can’t provide 24/7 support via telephone or email to handle this. A 3PL, in contrast, can provide this service.
5. Scalability
Many small and start-up eCommerce businesses can manage logistics initially, but as they grow and expand, space becomes an issue. Also, completing orders on time can become difficult, leading to delays in shipping and unhappy customers. A 3PL can handle the fulfillment process promptly, regardless of the volume of orders. They can also help you minimize your storage space (and the cost) in slow times.
What is a 3pl provider ?
The 3PL service provider can be described as a specialist business providing customers transport, storage, distribution, and fulfillment services. They outsource these kinds of services to the 3PL business and depend on the 3PL company to complete the management of certain services. As a result, 3PL providers are an integral component in supply chain management, and they are utilized by the majority of big businesses across the globe.
The third-party logistics process
The products are shipped directly from the manufacturer to the third-party logistics warehouse if you outsource fulfillment. The company will provide various services when your inventory is received at the 3PL warehouse. Here are some aspects that comprise this 3PL process.
Integration of eCommerce platforms
The majority of eCommerce companies rely on multichannel selling in order to survive. To facilitate this in your fulfillment warehouse, you need solid IT. The top fulfillment companies are able to seamlessly integrate with multiple sales platforms. The provider you choose should be able to support all of your sales channels or be able to build an API specifically for you. Additionally, you must be able to view and monitor the status of your orders at any time on the internet using the dashboard.
FTL as well as LTL Freight shipping, receiving, and delivery
The full truckload (FTL) or lesser truckload (LTL) freight are important tools that can help you save money on freight. This is especially true if you frequently ship large orders to commercial customers or wholesale purchases to retail. It is also possible to use freight services to transport your goods between warehouses and the distribution center close to the customers. The logistics provider you outsource to help you navigate the procedure. They can help you arrange to handle FTL as well as LTL loads and handle truckloads that arrive on the scene. Your 3PL can help you identify the best prices and the appropriate service level for the shipping of your freight.
Inventory management
If you are working with a logistics company that is a third party, it is no longer necessary to take on the task by yourself. Your third-party logistics provider has a wealth of experience in managing inventory. Your account representative can use the lessons they have learned working with various eCommerce businesses to help you manage your inventory. Contact them for help on the best levels for restocking as well as supply chain management and optimal seasonal inventory levels.
Packing, picking &, and shipping
Pick to pack, ship, and pick services comprise the heart of order fulfillment. If a client places an order via one of your sales channels, it is shipped straight to the fulfillment center. A picker is there to locate the items needed for your order from the shelf. Then, a packer chooses the right box that is not too big and not too small and packs the order. The packer then applies a shipping label. The shipper also ensures that the package is delivered to the correct shipping company as soon as it’s in the right place.
Same-day delivery
The logistics service provider you have contracted with might offer same-day delivery. This means that your customer’s orders are received, packed, and delivered on the exact day that they receive them. There is typically a cutoff time to ship the same day. For instance, Red Stag Fulfillment offers two different levels of same-day shipping. The first has a 3 pm cutoff time, and the second will ship orders up to 5 pm that same day. Shipping on the same day gets your items to your customers earlier. This leads to happier customers.
Reverse logistics
The term “reverse logistics” is an edgy name for returning. Returns are a part of eCommerce. The rate at which you return your merchandise will be contingent on several variables, such as the type of product you offer. Items that are large, like clothing or shoes, have significantly more return rates than the average for the industry. The fulfillment service you choose to use for your eCommerce can process and accept returns for you. Reverse logistics involves the examination of returned items to determine whether they’re damaged or are able to be restored to the shelves. Reverse logistics also reduces the amount of time needed to provide damaged products to be purchased again.
How do you choose the best 3PL partner?
The selection of the ideal 3PL supplier for your business requires multiple considerations. It’s essential not to concentrate on a single measure that is only cost.
Choosing a logistics partner shouldn’t just be based on the cost, as there will always be a cheaper option somewhere out there, The trust factor is what one needs to be looking for in a reliable partner.
In that regard, go about the following list while looking for and speaking to potential partners:
Security
Not only must your 3PL be equipped with all the necessary safety and compliance training for employees, but it must also be able to ensure the security of your information and resources. A partner who is certified by FDA, DEA, PCI, and HAZMAT -will take security and safety very seriously.
Good customer service
A key element of a successful commercial relationship lies in respect and good customer service. 3PLs that are willing to help and innovative problem-solving team members will help you save money as well as provide an enjoyable working experience.
Scalability
It’s crucial to prepare for the future and select an appropriate 3PL that will be able to accommodate the expected growth. Other than that, taken into consideration, the 3PL you select should be able to move your company forward and keep pace with the constant growth and not be a struggle to keep up.
Customization
Based on the industry you operate in, it is possible that you will require different levels of personalization for your business. Be sure your 3PL provider knows precisely what you’re looking forward to in terms of the ability to customize, whether that’s a multichannel capability or customer experience.
It’s important to find out what a 3PL’s niche is in the shipping and logistics market,” Rothbard explained. “A lot of companies will claim they do everything, but every provider has a niche of core services that they focus on and perform best in.
Compatible technology
Alongside scalability and flexibility, In addition, make sure that you are sure that the 3PL is equipped with enterprise-level technology to meet the demands of your company needs, demands and demands. It’s also crucial that 3PL has an experienced IT team that can help you resolve any problems.
Positive reputation
The best 3PL partner will not only meet all your current and future business requirements; however, they also have a good reputation within the industry. 3PL partners can help you connect to a wider network of companies, such as packing companies, marketing agencies, and much more.
6 Best 3PL company
The warehousing/order processing/fulfillment combo isn’t the only type of 3PL company. A few of the top 3PL companies integrate warehousing as well as supply chain management along with transportation and trucking. This is only one of the many. If you require 3PL services that are focused on logistics, then there are plenty of other top companies to pick from.
Ryder Supply Chain Solutions
Ryder Supply Chain Solutions provides secure transportation and modern warehouse services.
DHL Supply Chain North America
The company is based in Germany, and DHL is best known for its international delivery services. If you require assistance with logistical issues in the international market, DHL is able to assist you with almost any nation on earth.
UPS Supply Chain Solutions
UPS provides more than packages. The logistics division of the company assists companies in managing their supply chains by providing various services.
FedEx Supply Chain
FedEx provides freight and packages as well as its supply chain division provides 3PL services for eCommerce businesses of any size.
ArcBest
ABF Freight and Panther Premium Logistics are two of the companies that fall under the ArcBest banner. With a particular focus on transportation services, ArcBest can help you to solve your logistics issues and ensure that your products get to where they are needed to be.
XPOLogistics
XPO Logistics provides truckload freight and air transport services, as well as distribution and warehouse services.
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