3PL is gaining popularity among online businesses irrespective of the business type. In any online business, when a customer places an order through your virtual platform, the 3PL takes the responsibility of shipping it to the desired destination. As this process is simple with assurance of fast delivery at less risk, it can be a cost-effective way to reduce supply chain inconsistencies.
This blog will help you to understand more about 3PL or third-party logistics, its functions, and ways in which third-party logistics can be beneficial when you integrate them into your online business operations.
What is 3PL or third-party logistics?
Simply stated, third-party logistics, or 3PL, helps you manage your supply chain. When you use 3PL service, you have outsourced all your logistics operations and given the job of handling online orders to a third party.
By entrusting the handling of bulk orders to a 3pl logistics provider, you can free up your time and resources to focus on strategic business growth. This convenience allows you to penetrate new market segments virtually, decrease business costs, and enhance overall business efficiency, relieving you of the logistical burdens.
A third-party logistics service provider offers you the following services:
- Handling both local and international shipping
- Storing your inventory in a suitable location
- Freight forwarding
- Managing returned orders and repairing damaged products if needed
- Packaging and dropping products off in designated locations
E-commerce and growth of 3PL service
The changing consumer needs from the market of e-commerce has created a demand for 3PL logistics. When people shop online, they expect their products to arrive quickly at their doorsteps. On top of fast service, they also prefer to avail discounts while shipping or even choose those services that offer free shipping facilities. In this scenario, 3PL complements online business services by helping them with effective supply chain functioning. Your online businesses can work well even in international chains with the help of 3PL. As a result, increased globalization and international trading activities have added fuel to the use of third-party logistics and are expected to grow substantially in the future.
Consolidate Fulfillment with Freight
In e-commerce, order fulfillment is key to customer happiness and cost savings. One way to do this is with consolidated freight. This means combining multiple smaller shipments into one bigger shipment which can save you a lot of money and make your supply chain more efficient. By consolidating freight you can reduce shipping costs, less handling and less damage to goods. It not only streamlines logistics but also supports sustainability by using more of your resources. For e-commerce businesses looking to improve their fulfillment, consolidating freight is a smart move to more efficiency and profit.
How will your online business benefit from a 3PL service provider?
3PL services offer more than just shipping and receiving. They can help you at all levels of your business’s supply chain, from warehousing to consulting services.
-
Expand your business
With the support of a 3PL service provider, you can expand your online business services worldwide with minimal risk and lower costs. This opportunity for global expansion not only fulfills your business’s logistical needs but also positions you to develop a competitive edge in the global marketplace, fostering optimism about your business’s growth potential.
-
Easy reverse logistics
If your online business frequently receives heavy returns, 3PLs handle all the processes associated with reverse logistics. They carry out all the activities, from transporting returned products to your designated store to repackaging the goods for resale. Hence, these third-party logistics work best for managing return functions with no hassle from your end.
-
Lower cost of operation
3PL allows you to reduce cost per order as it integrates your deliveries with its other numerous clients and finishes tasks of multiple clients in a single trip. So, there is a huge cost difference when you delegate logistic needs to a 3PL instead of managing the orders yourself. Also, you do not have to hire additional employees to fulfill online orders or invest capital in warehouse management.
-
Better customer service
Timely delivery service and low shipping costs are crucial factors in a customer’s purchase decision from an online company. By leveraging 3PL logistics, you can successfully enhance customer service, executing your idea of delivering products within a few days in strategic locations. This assurance of meeting customer expectations instills confidence in your business’s ability to provide excellent service.
How to choose the right 3PL logistics for your online business?
With a large number of service providers in the market, it’s important to get things right by choosing dependable 3PL logistics for your online business. A 3PL affects your business’s costs, customer service, and supply chain management extensively, and they are equally important for the success of your business. Therefore, choosing the right 3PL for your online business should be your priority. So, before making a decision, ask yourself the following questions:
-
Will the 3PL be able to manage your business volume?
Before choosing, make sure that the 3PL logistics can handle your business’s shipping volume needs. Multiple 3PLs are available, but every company may not have the capacity to operate smoothly with larger-scale orders.
-
Does the company have positive reviews?
Research and look for the company’s reviews and understand the overall customer experience. Choose those companies that have a good reputation with their customers for better service delivery.
-
Does the 3PL provider integrate technology while operating?
Technology allows you to automate redundant tasks and simplifies complex jobs. So, find a 3PL that integrates user-friendly technologies and allows you to constantly monitor business processes related to order and inventory management.
As technology is an integral part of an online business, you must make sure that your third-party logistics focuses on investment in compatible software like transportation management systems, warehouse management systems, and other relevant software for smooth functioning.
-
Does your 3PL charge extra?
Some 3PLs may attract you with lower estimates in the beginning, and after rendering their service, they may charge you hefty invoices in the end. So, choose reliable service providers that provide details of all the costs with no hidden charges.
-
Do you have the necessary support from your 3PL whenever you need it?
As your business processes depend a lot on your 3PL, they must be available at ease whenever you need them. Any delay means a setback in your business operations. If your 3PL doesn’t reply on time, you will suffer as you will not be able to fulfill orders on time. So, before choosing a service provider, make sure that they respond well to you.
