Order fulfillment is a critical component of running an online ecommerce business. As your firm expands, you may discover that delivering client orders in-house becomes impractical. That is when third-party logistics services come in handy!
What are third-party logistics service providers (3PLs)?
Third-party logistics (or 3PL) refers to the outsourcing of ecommerce logistics procedures, such as inventory management, storage, and fulfillment, to a third-party enterprise. With the tools and infrastructure necessary to automate retail order fulfillment, 3PL providers enable ecommerce retailers to do more.
With the introduction and growth of ecommerce in the ‘90s and 2000s, the term 3PL has become ubiquitous, and 3PLs have expanded their services. The supply chain integration of warehousing operations and transportation services has become what we now call third-party logistics.
What are the advantages of partnering with a third-party logistics provider?
There are several advantages to outsourcing fulfillment to a third party logistics company like https://redstagfulfillment.com/3pl-definition-process-resources/. While each 3PL company has unique capabilities, all 3PLs offer solutions for inventory management, packing, and shipping, eventually delivering reliable logistics systems and assisting businesses in maximizing revenue.
1. Time and money savings
By partnering with a 3PL, you may avoid the costs associated with purchasing or renting warehouse space, logistical operations, manpower, and technology necessary for in-house fulfillment.
As your company scales, executing orders on your own gets increasingly costly. This includes warehouse space, forklifts and other equipment, warehouse management software (WMS), recruiting and personnel expenditures, workers compensation and liability insurance.
Additionally, you save time by outsourcing fulfillment chores to a third-party logistics provider. Rather than packaging boxes, standing in line at the post office, or constructing fulfillment infrastructure, partnering with a 3PL frees up your time to focus on more big-picture, strategic efforts such as product development, sales, and marketing.
2. Capitalize on industry experience
As an ecommerce professional, you probably lack the time necessary to become an expert in every aspect of your business including shipping and logistics. That’s where a 3PL comes in: staffed by ecommerce logistics experts, your 3PL will be aware and current on industry trends and intricacies – so you don’t have to be.
Additionally, 3PL firms have the technical expertise and partner network — which includes marketing agencies, bespoke packaging suppliers, shipping partners, and others — that enables them to continuously enhance supply chain efficiency and create supply chain optimizations to assist in driving ecommerce success.
3. Increase your reach
If you sell just in one region, you are severely restricting the reach of your company to grow and expand. Collaborating with a third-party logistics provider can help you increase your reach.
3PL firms often have a vast network of fulfillment centers across the country. This is something that is hard to accomplish with just in-house efforts. A third-party logistics provider with fulfillment centers in key US cities around the country can assist you in reducing the cost of shipping and transit time for orders. Shipment of orders from a single location will take more time to get the product in your customers’ hands and will also result in higher postage costs for parcels traveling across various delivery zones.