What is 3PL Logistics, and Why Do You Need It?

 

Managing inventory in a warehouse

The traditional business model of managing most operations in-house has become outdated, especially for small e-commerce businesses. Most e-commerce companies have expanded their operations while operating on a small budget.

With third-party logistics services, you can outsource one of the most important aspects of your e-commerce business to professionals. That’s how you can focus on growth, marketing, and customer satisfaction.

A third-party logistics company can manage your inventory for you by providing pick, pack, and shipping services for your products. 3PL provides a link between manufacturing operations and customers. As order fulfillment operations run smoothly, you can observe customer satisfaction and significant business growth.

Before you start working with a 3PL company, you must understand what it is and why you need it. Here’s what you need to know.

What is Third-Party Logistics (3PLs)?

Third-party logistics is outsourcing the processes of e-commerce logistics to a third-party business. These processes include picking, packing, warehousing, inventory management, and fulfillment. With the assistance of 3PL providers, e-commerce merchants can accomplish more. These professionals use the right infrastructure and tools to automate retail order fulfillment.

Every 3PL company specializes in different types of warehousing and fulfillment. Some can store and ship products that need to be kept in cold storage, while others store and ship hazardous materials. 

A 3PL provider manages inventory

3PL Order Fulfillment Process

Here’s what happens at a 3PL’s e-commerce warehouse after the customer submits the order to their online store.

Receiving

To ship an order, a 3PL provider needs an inventory on hand. Receiving inventory in a 3PL warehouse means acceptance of incoming merchandise for storage. Each 3PL has unique processes and the capacity to receive and store inventory.

For instance, some clients are required to fill out a Warehouse Receiving Order (WRO) to determine which products the 3PL provider will be receiving and the number of units.

Warehousing

Once the inventory is received, the items are stored in the fulfillment centers. Every Stock Keeping Unit (SKU) has a separate storage location. Different 3PLs provide different storage capacities.

It’s better to work with a 3PL that offers more than enough space for your existing inventory. So as your order volume and product line grow, your 3PL storage will be able to keep up with your requirements.

Picking and Packing

Some 3PL require clients to upload orders to their systems manually, while others have cutting-edge technology that directly integrates with your e-commerce platform. Once your 3PL receives the order, the warehouse picking team is assigned responsibility.

When all ordered products are picked from their respective locations, they’re packed securely for shipping.

Shipping

In this step, carriers pick up orders from 3PL warehouses for shipping. The shipping speed depends on the partnerships and policies of the 3PL provider and the shipping options the client offers. 

3PL provider offers packing services

Why You Need 3PL Service

Saving Time and Money for Sellers

Using a 3PL eliminates the need to invest in warehouse space, transportation, technology, and employees for logistics processes. This allows sellers to focus more on their core competencies. Moreover, 3PLs can make sellers aware of the supply chain mistakes that could be risky and costly.

Expertise

Logistics requires an in-depth understanding of business strategy, inventory management, different modes of transportation, and manufacturing planning. Since 3PL providers are responsible for handling logistics, they have expertise in all these functions. Moreover, they can take over more complex and tedious jobs, making it easier for your team to focus and strategize their core business.

Flexible Scale Operations

When using a 3PL, sellers can scale labor, transportation, and space according to their current inventory. In addition, they can ease the transition between industry fluctuation and seasonal periods.

To expand into new markets in new regions, your business can rely on a 3PL provider. To improve supply chains, 3PLs employ the right tools and technologies to make the necessary adjustments and eliminate inefficiencies.  

Preparing package for shipment
 

Get 3PL E-Commerce Order Fulfillment Services

3PL providers are the backbone of a successful e-commerce business. In addition to saving you time and money, they help you stay organized and compliant and greatly reduce your risk of inventory loss.

If you’re running an online business, you deserve a business partner that can help you with order processing, sourcing, and delivering.  

This is why we recommend you work with E-Commerce Express. The company helps online entrepreneurs globally with the highest quality services. Their comprehensive portfolio of solutions includes 3PL order fulfillment services, custom packaging, product sourcing, and photography. They will hear about the challenges your online business is facing and discuss how they can help address your business needs.

Contact them today.

You can also email them at info@ecommerce-express.com.

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