What is 3PL Logistics?
A Third Party Logistics Services, or 3PL, involves getting outside help with the fulfilment of orders, inventory management, and warehousing.
3PL partners handle storage, picking, packing, and shipping on your behalf instead of delivering goods to your own warehouses.
3PL companies can handle the extra workload or overhead for fast-growing eCommerce brands so they can scale up sales quickly.
A 3PL company can perform a variety of services, some of which may cover all your fulfilment needs, while others may only cover part of what you need. Finding the right 3PL partner is important to your business' success.
What are the different types of 3PL companies?
There are several types of 3PL companies and service providers, so before you can choose the right fit for your business, you'll need to know what your options are.
This breaks down into three types:
1. Distribution: A common 3PL service is distribution, which involves warehousing and distributing your products. Obviously, this is an option you should consider if you want to expand your business into more channels while maintaining 1-2 day shipping.
2. Financial and information:
A 3PL with special expertise in international supply chains should be a good choice for bigger brands handling a large volume of orders. Optimizing your fulfilment process and adapting to changing global operating conditions can be provided by them.
3. Transportation:
As well as transportation services, these 3PL companies often provide warehousing as well. When you are looking for a 3PL provider, FedEx is a great choice if you just want one provider for all of your fulfillment needs, rather than dealing with multiple companies.
Who should use 3PL?
Would your brand benefit from partnering with a Third Party Logistics Services Provider? You might need to consider more formal 3PL services if you recognise the following as part of your current growth stage:
The volume of orders you receive is too high: If you cannot fulfil everything yourself, there will be an advantage to hiring outside help. An easy way to determine if you need fulfillment help is if you get more than 100 orders per month.
Your delivery times must be reduced: Customers expect free 1-2 day shipping from Amazon (this is the effect of Amazon/Prime). The ability to meet customer expectations can be made easier if you’ve recently increased sales and have the infrastructure already in place through a 3PL logistics partner.
You’re running out of your own warehouse space: Having recently increased sales can also cause you to run out of warehouse space. Rather than taking on this responsibility yourself, you might be better off bringing in a 3PL partner to help. The same is true if the organisation of your warehouse is getting unruly.
You want to scale: Scaling your brand brings many challenges. By outsourcing extra fulfillment requirements to a specialist 3PL provider, you can reduce some of the overhead and risks associated with scaling.
The 3PL Process and Considerations:
When you are used to running your eCommerce business alone, it can be upsetting to let someone else handle the Logistics of shipping your goods, so let’s demystify it a bit before you give it a go.
3PL Partners typically ships goods in the following way:
1) Receiving
2) Picking
3) Packing
4) Shipping
5) Returns
3PL Partners can provide you with the following services:
1) Ecommerce Platform Integration
2) Shipping on the same day or within 2 Days
3) Returns Management and Reverse Logistics
4) Tracking capability for Customer
5) The Distribution of Inventory
6) Fulfilment of Orders Internationally
7) Options for Flexible Shipping
CONCLUSION:
Logistics service providers are transforming the supply chain sector, helping their customers focus on their core businesses while managing their transportation, freight operations, warehousing, and more. As a result, companies are being able to save costs, expand their businesses, and improve their operations.