Online retailers and other businesses rely on 3PL ecommerce fulfillment to help them store and ship their products. Moreover, the third-party logistics (3PL) industry will be worth $1.59 trillion by 2028, mirroring the meteoric rise of the e-commerce sector. The correct third-party logistics provider (or “3PL”) may transform your operations, increasing revenue and customer happiness for every size online store, from mom-and-pop Shopify stores to massive international e-commerce giants.
However, how can you narrow down the opportunities to the ones that will work best for your company? You need not be afraid. Let us help you.
What Is 3PL Ecommerce Fulfillment?
A 3PL, which stands for “third party logistics provider,” is a collaborator that helps businesses streamline their logistics and supply chain processes. Their areas of expertise include order fulfillment, inventory management, processing returns, warehousing storage, and transportation.
There are a few more names that third-party logistics providers go by:
- Product delivery business
- 3PL ecommerce Fulfillment
- Distribution center
- Fulfillment Center
Although not all third-party logistics providers (or “3PLs”) provide the same services, they all share a common goal: reduce the burden of supply chain management by meeting your fulfillment and warehousing demands.
What Is The Difference Between Fulfillment And 3pl?
Third-party logistics (3PL) and fulfillment both play important roles in the supply chain, but they provide unique services and perform different tasks.
1. Fulfillment
Fulfillment is the process of getting customer orders, handling them, and sending them out. Order picking, packing, shipping, inventory management, and warehousing are the usual steps in online fulfillment. A large number of online retailers manage their own logistics and warehouses to complete customer orders.
2. Third-Party Logistics (3PL)
Businesses can outsource their logistics to third-party logistics companies (3PLs). Among these services, you may find transportation, storage, distribution, freight forwarding, and administration of inventory. Third party logistics (3PL) services cover more ground than fulfillment, which is mainly concerned with processing and shipping orders. Moreover, third-party logistics companies are experts in maximizing efficiency throughout the supply chain by minimizing shipping costs, improving shipping routes, and streamlining the process overall.
Also Read: How Much Investment Required for Amazon FBA in Pakistan?
Why Do You need 3PL ecommerce Fulfillment Services?
When it comes to managing supply chains, e-commerce businesses can benefit from working with 3PL ecommerce fulfillment services.
If you outsource your inventory and logistics to a third party, you’ll have more time and energy to devote to growth strategies like finding new customers and creating innovative products.
Additionally, some online retailers collaborate with third-party logistics businesses, often known as 4PLs. You can think of these service providers as managers and consultants who can help you create, implement, and improve your logistics and supply chain. You can also ask for their help in finding and overseeing 3PLs.
Amazing Benefits Of 3PL Services
The benefit of 3PL services is that experts in shipping and fulfillment will handle your logistics outsourcing.
Give 3PL companies the freedom to focus on their strengths while you focus on yours. Third-party logistics providers are experts in their field. They will take care of your shipping and fulfillment, so you can focus on the big picture.
1. Easy Testing And Introduction Into New Markets
A worldwide fulfillment network, paperwork, and customer and tax accounting are all necessary for the international expansion of a business. Collaborating with a 3PL can be an excellent way to test the waters of selling your product internationally if you aren’t ready to deal with the legalities or invest in infrastructure abroad.
To better understand the point, consider a US-based seller that wishes to conduct product testing in the UK. In this case, a third-party logistics provider would be a good choice for storing a small sample of products in the country. This takes the hassle out of researching the labor laws and real estate market in the UK before you decide if it’s worth it or not.
In addition to improving customer satisfaction, cutting shipping costs, and speeding up delivery times, outsourcing these tasks to 3PL ecommerce fulfillment can boost your bottom line.
2. Release Capital Locked in Warehouse Expenses
One way to free up money that is tied up in warehouse expenses is to engage third-party logistics providers. There will likely be a 10% increase in the cost of renting warehouse space in the coming year. Furthermore, by 2024, there will likely be a shortage of warehouse space. On the other hand, 3PLs own their warehouses, so you can save money that you can spend on other lucrative endeavors.
3. Cut Back On Unnecessary Expenses
When you work with a third-party logistics provider (3PL), you can take advantage of their trained workforce and automated warehouse systems without having to shell out the capital to build your own. For example, with the use of robotic gear that can pick and pack orders, human people are no longer required to complete the process. The machinery is operational all day, every day, allowing retailers to take advantage of delayed order cut-offs for instant shipment.
Moreover, carrier tariffs are another possible area for cost savings. You can usually get better shipping prices when you work with a 3PL ecommerce fulfillment center.
How to Choose the Right 3PL eCommerce Fulfillment Company for You?
If you want to enjoy the advantages listed above, choosing the right 3PL provider is essential. It is important to take the following into account:
1. Background and Credibility
Try to find a 3PL that has experience fulfilling orders placed through online stores. Look into their track record with items like yours, inquire about references, and read reviews.
2. Integrating Technology
Make sure the 3PL uses cutting-edge tech that works well with your online store. You should prioritize features that allow you to track inventories in real-time, manage orders, and analyze data.
3. Location And Network
Transportation expenses and delays are highly sensitive to the location of the 3PL provider’s storage facilities. Look for a 3PL ecommerce fulfillment provider whose infrastructure is strategically placed to guarantee efficient delivery to your customer base.
4. Adaptability and Scalability
It is important that your 3PL provider can adapt to the evolving demands of your company. Additionally, they need to provide adaptable solutions that are customized to meet your unique needs.
5. Pricing Framework
Find out what the service charges are and make sure it fit into your budget. Try to get clear pricing and be mindful of any hidden costs.
Also Read: Amazon Product Hunting Strategies
Conclusion
Using a third-party logistics provider is common practice for most Amazon FBA private label businesses. No matter if this is your first time working with a 3PL or you’re looking to cut back on your current partnerships, you’ll face some obstacles along the way. Even though e-commerce businesses can’t change every business partner, they can choose how carefully they do their research before choosing the best 3PL.
Make thorough research to find the best business partner. Not only can the correct third-party logistics providers streamline storage and order delivery, but they can also guarantee lightning-fast shipment times for your clients, completely transforming your business. If you want to get the most out of your 3PL collaboration and run your business like clockwork, think about contacting an ecommerce consultant, Munir Ahmad, or digital marketing agency in the UAE.
