3PL – Third-Party Logistics Company
In today’s fast-moving and interconnected world, your customer expects quick and efficient order fulfillment. The ever-increasing demand for eCommerce services is a blessing for your online store. But, too many orders within a short period can overwhelm your in-house order fulfillment capability. As a profit-minded eCommerce business owner, you need effective strategies to exploit the increase in demand for services. This is where 3PL fulfillment comes in handy.
What is 3PL?
3PL is an acronym for Third-Party Logistics, professional entities that offer fulfillment services. As your business grows, you can hire a 3PL to take care of all your order fulfillment-related tasks, from receiving, picking, packing, and shipping orders. Some 3PL companies also offer inventory management, warehousing, and other fulfillment services. With 3PL fulfillment, small and medium online stores can acquire the expertise they lack in-house. You can expand your order fulfillment capability to match the dominant competitors and giants in your sector. Outsourcing fulfillment will also reduce your workload and allow you to focus on growing your business. 3PLs can help you get the most out of your eCommerce fulfillment strategy and scale it to handle more orders from your customers. 3PL comes in handy when fulfilling customer orders in-house is no longer feasible.
When Should You Hire a 3PL for Your Online Store?
Regardless of the size of your store or eCommerce platform, partnering with a 3PL can streamline your order fulfillment processes. Here are four challenges your 3PL can address for you:
- When orders surpass your shipping capability
The number of orders and fulfillment capabilities vary from one store to another. So, there’s no magic number that indicates you need 3PL fulfillment. If your order volume increases beyond your shipping capability, it’s time to outsource. In most cases, online stores with over 100 orders per month may need to outsource fulfillment. You should consider outsourcing to a 3PL if you have to stay up for hours into the night to meet demand.
2. When fulfillment distracts you from running the business.
Fulfilling orders is time-intensive and can distract you from core business operations. You should consider outsourcing 3PL fulfillment if you spend more time packing orders and less time running the business. Outsourcing fulfillment to an expert will help you focus on activities that generate revenues and grow your business.
3. When your inventory surpasses available storage space
As your business grows and orders increase, you’ll need more inventory to meet demand. The space in your garage or rented storage unit gradually decreases over time. If you start moving some of your inventory from your storage to your bedroom to create room for new items, it’s time to outsource. Outsourcing warehousing can help you grow your inventory to meet demand without worrying about storage limitations.
4. When your customers demand free 2-day shipping
While free 2-day shipping can give you an edge over the competition, implementing it is easier said than done. You may need to offer expedited 2-day air shipping to beat the deadline, which is more expensive than ground shipping. You’ll need a 3PL to offer free 2-day shipping cost-effectively. It is more affordable to provide this essential offering through 3PL fulfillment than self-fulfilling.
3PLs’ Order Fulfillment Processes, Services, and Pricing
Third-party logistics companies offer a wide range of services that can streamline order fulfillment processes for online stores of all sizes. Before your 3PL fulfills your orders, you’ll have to pay onboarding fees to integrate 3PL software with your online store and access fulfillment services. Here is a simplified 3PLs fulfillment process and associated costs:
Receiving your products: You send products to your 3PL to sell to your customers. In this first step of the order fulfillment process, you pay your 3PL for the acceptance and storage of incoming inventory. Your 3PL can charge per-unit, per-pallet, flat rates, or per hour.
Warehousing: Your 3PL stores your inventory in their fulfillment centers and charge you for storage space. 3PLs can charge for warehousing per-unit storage or a fixed fee per bin, shelf, or pallet.
Picking and Packing: Your 3PL assigns a picking and packing team as soon as your customer places their order. They can charge either per-pick or combine picking and packing costs.
Packaging: Once your order has been picked, the 3PL’s team will pack it using the recommended package. Some 3PLs offer standard packing materials as part of the services, while others charge these materials separately.
Special order arrangement: If your products require specific packing or arrangement techniques before shipping, your 3PL will charge you kitting fees.
Shipping: Your 3PL ships the order from their fulfillment center to your customer’s doorstep. In this step, you will pay shipping costs, which vary depending on the distance, dimensional weight, and shipping speed.
Tech-driven providers like 3PL & Ecommerce Fulfillment offer more than warehousing, picking, packing, and shipping services. They also offer returns, inventory management, order tracking, and other fulfillment services to help you optimize your entire fulfillment process. Outsourcing fulfillment can benefit your online store on so many levels regardless of size.
What are the Benefits of Outsourcing to a 3PL?
Outsourcing your order fulfillment to an expert comes with several benefits. While SMBs stand to gain the most from partnering with a 3PL provider, the solutions offered by 3PLs can benefit any eCommerce business regardless of size. They offer solutions for managing inventory, packaging, and shipping, which are essential for you to conduct business online. Here are the top five benefits of outsourcing your fulfillment to a 3PL company:
- Drive Efficiency and Cost Savings. The upfront cost of establishing a fully operational in-house fulfillment center can overwhelm any small or medium business. You’ll need to invest in warehouse space, technology like management software, vehicles for logistics, forklifts, and other equipment. And, the cost of fulfilling orders in-house increases steadily as your business grows. But you can avoid all these costs by partnering with a 3PL. Outsourcing to a 3PL company allows you to acquire the same level of fulfillment capabilities enjoyed by major brands without overburdening costs. They can leverage innovative technologies to improve efficiency and process your orders quickly. Outsourcing fulfillment to a 3PL can help you increase efficiency and cost savings. You can focus on growing your business while your 3PL fulfills your customers’ orders.
- Expand your Reach. Whether you operate from your garage or business premises downtown, you can rely on 3PL to expand your reach state-wide, nationally, or globally. Expanding your reach makes it easier for you to grow your customer base. Outsourcing to a 3PL with an expansive network of fulfillment centers unlocks new markets for your products. It can give you access to unsaturated markets across the country, which were previously beyond your reach. Best of all, expanding through your 3PL’s fulfillment centers will cost you only a fraction of what you’d invest for expansion. These centers can also help you reduce delivery time and the cost of shipping orders to your customers.
- Access and Nurture Expertise In-house. Shipping and logistics are expansive fields and highly dynamic. Outsourcing your shipping and logistics to a 3PL expands the expertise of your team. It allows you to leverage industry expertise for growth while building your in-house team. 3PLs are experts in eCommerce logistics. So, you’ll be building your internal team based on the latest trends and operational best practices. Working alongside your 3PL can also help you acquire their technical know-how and instill it in your team. Eventually, you won’t need assistance from third-parties to improve supply chain efficiency.
- Improve Customer Satisfaction. Over the years, offering free 2-day and next-day delivery is now the status-quo for eCommerce. To satisfy your customers, you have to provide these services. Outsourcing to a 3PL can help you meet buyers’ delivery expectations. You can use your 3PL’s fulfillment centers, networks, and resources to provide 2-day and next-day delivery. Partnering with a 3PL company allows you to satisfy your customers cost-effectively.
- Improve Risk Management. While risks are an inherent part of supply chains, inexperienced online stores are more likely to incur huge losses. But you can rely on the expertise of your 3PL to mitigate incidents and prevent downtime. They leverage new and emerging technologies like AI and machine learning to monitor the supply chain, anticipate issues, and respond before they become problematic. Partnering with a 3PL will help you manage risks more effectively and keep your supply chain operations.
You have to outsource to the right 3PL provider for you to enjoy all these benefits. As an online store owner, you can rely on tech-driven providers like 3PL & Ecommerce Fulfillment to deliver these benefits and many more. They can help you leverage new and emerging technologies like AI and machine learning to optimize your supply chain and order fulfillment processes from start to finish.
How to Choose the Right 3PL Company for Your eCommerce
When it comes to fulfillment, there’s no one-fits-all 3PL company. Why? Each eCommerce business has its own unique needs. The best or the most popular 3PL company on the market may not be the right fulfillment provider for your business. To choose the right 3PL company to handle your online store’s order fulfillment, analyze their offering based on your needs. Here are some of the factors to consider to find the right 3PL company for your eCommerce:
- All-in-One Fulfillment Service
Customer experience can make or break your eCommerce business. Like shaving, you’ll need to deliver the best tomorrow regardless of how great you did today. It’s all about consistency. So, you need a 3PL that offers an all-in-one fulfillment service. Your 3PL should coordinate all aspects of the supply chain, from inventory management, warehousing, picking, packing, shipping, tracking, and managing returns. Outsourcing to an all-in-one 3PL provider can streamline your order fulfillment processes consistently from start to finish. All-inclusive service will give your customers a better overall experience than outsourcing to several providers that facilitate only one or two isolated parts of the fulfillment process.
- Align Your Technological Needs
Does the 3PL’s technology deliver your specific needs? If your store needs more than traditional fulfillment services, you should choose a tech-enabled 3PL. Unlike traditional providers, a tech-enabled 3PL offers more than inventory warehousing, picking, packing, and shipping. They provide integrated shipping and fulfillment solutions that cater to everything, from inventory management to order tracking. Your tech-enabled 3PL can also manage your online sales returns and help you leverage data to catalyze growth. If you own several eCommerce stores, the right 3PL should offer robust software to connect and integrate all your stores and fulfillment processes. Aligning your needs with their technology can help you choose the right 3PL for your store.
- The Number and Location of 3PL’s Fulfillment Centers
When choosing 3PL for eCommerce, consider the number of their fulfillment centers and where each center is located. A 3PL company with several fulfillment centers spread across your target market will reduce the distance to your customers’ doorstep. Shorter distances will help you deliver orders quickly and cost-effectively. You kill two birds with one stone, perfect right?
- Extensive Customizability
Customizing orders to meet your customers’ unique needs is endearing. It guarantees your place in their heart and increases your competitive advantage. The right 3PL company for you should have the expertise and technology needed to deliver the level of customization you seek. If you need to customize your products with unique features for the holidays, your 3PL should help you accomplish this effortlessly. Custom packaging and branded invoices can make the customer feel important. Your 3PL fulfillment partner should deliver all your specifications whether it is high-season or low-season.
- Responsive customer support service means more sales
Modern consumers want responsive customer support to shop online seamlessly in real-time. Their questions should be answered instantly to ensure they go through with the purchase. Poor and unresponsive support services can handover a loyal customer to a competitor on a silver platter. Ensure the 3PL company offers live customer support that addresses customers’ concerns about returns, exchanges, and so on. Responsive support services can improve customer experience, boost retention, and grow your base through word-of-mouth referrals.
These five factors can help you find the right 3PL for your eCommerce. Don’t forget to determine the basics, such as how the 3PL will help you sell more and grow. Innovative providers like 3PL & Ecommerce Fulfillment can streamline your processes, save you time and money, and provide a positive experience to your customers.
Third-party logistics (3PL) companies are emerging as the go-to option for startup, small, and medium online stores. Why? Well, online stores can outsource the entire order fulfillment process to a 3PL company. Tech-driven 3PLs like 3PL & Ecommerce Fulfillment can take care of your order fulfillment, from receiving, warehousing, picking, packing, and shipping orders. They also offer inventory management, order tracking, and many more services. With 3PL & Ecommerce Fulfillment, online stores of all sizes can acquire the expertise they lack in-house. We can help your eCommerce business stay ahead of the curve and thrive. Contact us today to get started!
Third-party logistics or 3PL companies offer eCommerce fulfillment services. You can outsource your entire order fulfillment process to a 3PL. Choose the right 3PL to enjoy benefits like fast delivery, lower costs, time-savings, and more.