Excellent work! If you want to outsource your operations, business must be going great. Working with a third-party logistics (3PL) company can help your e-commerce business in many ways. That being said, it can look like too much at first. This guide will talk about the main parts of third-party logistics (3PL) and how to choose the best 3PL for your online store.
3PL: What Is a Third-Party Logistics Company?
Third-party logistics (3PL) means hiring an outside company to handle your logistics and supply chain management. Third-party logistics (3PL) companies help many different types of businesses with many tasks, such as shipping, storing, managing goods, and arranging transportation. These are the basic services that a 3PL business provides. They also offer extra services that add value, such as custom packaging, labeling, returns management, customs brokerage, and supply chain consulting.
The main goal of 3PL companies is to make your brand’s supply chain processes run more smoothly and more efficiently. When you hire a third-party logistics (3PL) company to handle your e-commerce logistics, your business can take advantage of economies of scale, specialized knowledge, and a large network of carriers and storage sites.
3PL Functions:
- Transportation
- Warehousing
- Inventory management
- Order fulfilment
- Reverse logistics
- Shipping
- Technology integrations
- Data analytics
Hiring outside transportation companies to do these tasks can save your business time and money while also making your supply chain more efficient.
How Does Third-Party Logistics Work?
Third-party logistics (3PL) involves coordinating a lot of different steps to make the order fulfillment process run more smoothly. If you know the basics of these steps, you can figure out which logistics solutions you need most and make sure that your service deal with a 3PL fits those needs. The following steps are usually part of third-party planning.
Receiving:
Your third-party logistics (3PL) business gets your goods from your factory, a supplier in the United States or another country, or both. To make sure nothing is missing or broken, the inventory is checked to make sure it is correct and of good quality. The 3PL company will keep your goods in their warehouse and enter them into an inventory management system.
Warehousing:
A 3PL stores your goods in fulfillment centers that are put in smart ways to make sure they can be sent to your customers quickly. Managing and organizing the inventory so that items are easy to find and pick quickly is part of this job.
Picking:
Tech-friendly A third-party logistics (3PL) company can connect straight to your online store or market through software integrations. When a customer places an order, the order goes straight to your 3PL provider, who starts the fulfillment process. The goods are found in the warehouse by a fulfillment team, which then picks them up to complete the order.
Packing:
When your customer places an order, the fulfillment team puts it in the safest packaging possible so it can be shipped. Most shipping companies base their rates on the size of the package. A third-party logistics (3PL) company might use different kinds of packing to get the lowest dimensional weight and lowest logistics costs.
One of the things that a 3PL service might do is custom labeling and packaging. This lets you give each customer a more unique experience.
Shipping:
The orders are sent to the customer by a chosen carrier by your 3PL. For openness’s sake, shipping and tracking information is always being added to the inventory management system. 3PLs that have technology built in will send tracking information to your online store immediately, so customers can keep track of their orders. How fast each order ships will depend on the 3PL’s policies, partnerships, and the shipping choices you choose.
Returns:
If a customer wants to return an item, your 3PL service should handle the whole process. When they get the returned items, they check to see if they meet the requirements for reselling, and then they add them to their collection. From there, they handle the return process and make sure the items are quickly and efficiently restocked or reshipped.
What are the Benefits of Outsourcing to a Third-Party Logistics Provider?
Companies are using third-party logistics (3PL) providers to help them stay competitive and improve their fulfilment processes because customers want faster delivery choices. Most businesses can’t afford to make the big investments needed to set up their own supply chain network. When your business grows to a certain point, it’s better for efficiency and cost to hire someone else to handle your services.
Fast Delivery Options:
It will be hard to give customers in San Diego next-day or two-day service if you only have one fulfilment centre in Boston. For faster delivery, a 3PL can keep your goods in warehouses close to important markets.
Save Time and Streamline Operations:
To begin, a 3PL gives you more time, which is the most important thing you have. You’ll have more time to work on other parts of your business when you hire a specialised 3PL to handle order fulfilment. You won’t have to hire people, make new technologies, or build the infrastructure that complex supply lines need. Adding these time-consuming and expensive jobs could put extra stress on your staff and stop your operations from running smoothly. 3PLs can help you with all of your logistics needs and make your business run more smoothly because they have the technology, trained staff, and tools already in place.
Specialized Knowledge of Logistics:
Most of the time, the best 3PL companies have been in the transportation and supply chain management business for decades. They’ve had to deal with everything from not having enough raw materials to political unrest and problems in the supply lines. Three-party logistics (3PLs) have learned a lot from this and put in place methods to make the fulfilment process go more smoothly.
Provide Opportunities for Growth:
You can change your supply chain and grow with the help of a third-party logistics (3PL) company. Different changes in demand and order number may happen as your business grows. These changes can be handled by a 3PL, which can change the size of its activities to meet demand. Reaching foreign markets is another way to grow. A third-party logistics (3PL) company with a global supply chain network can help you understand the rules for doing business across borders.
Gain a Competitive Advantage:
If you hire a 3PL to handle your logistics, you can focus on the customer process, make your marketing better, and enter new markets. Companies that do their own delivery or hire bad third-party logistics (3PLs) may not move forward. When you work with a top 3PL, you can get useful information and advice on how to optimise your supply chain. This lets you make smart choices and stay ahead of the curve.
Deliver a First Class Customer Experience:
Your customers will have a better experience with your business if you use a 3PL to ship items faster, make sure orders are filled correctly, and give you accurate tracking information. It is said by Verte that 90% of people who track their packages have “high or very high expectations when it comes to package tracking.” With these numbers in mind, it’s important to give customers full visibility and openness over their order.
How to Find Best Third-Party Logistics Service Provider?
To find the best third-party logistics provider (3PL), you need to match your wants with what the 3PL can do. First, find out how much experience and knowledge the 3PL has in your business. Make sure they understand any specific problems and needs.
Think about the 3PL’s ability to reach your target areas across the country in just one to three days. This may be very important to customer happiness because many people want deliveries as soon as possible.
Ask about operating skills such as the ability to grow, respond, and adapt to new situations. This can help you build a relationship that will last, even as your business grows.
Most importantly, the best 3PL company for your business will be able to explain how its value offers meet your needs and back up its claims with proof and guarantees. Let’s talk about some of the things to think about in more depth.