As your e-commerce business expands, you’re less likely to be able to keep on top of every aspect of your business. How are you meant to keep on top of fulfilling hundreds of orders a week whilst managing and marketing your business? Chances are, you’ve come across the term 3PL as a solution for your needs. But what is a 3PL? Third-party logistics, or 3PL for short, is a vital part of modern business. It’s the behind-the-scenes magic that ensures your Amazon package arrives on time or that your local shop never runs out of your favourite crisps.
What is 3PL?
3PL stands for Third Party Logistics companies. 3PL, or Third-Party Logistics, is a service that allows businesses to outsource various logistics operations such as warehousing, shipping, and inventory management. This helps businesses focus on their core activities while experts handle the logistics. This service helps businesses with their entire supply chain management and operations. This includes tasks like storing products and shipping them out to customers. If you’re running a business, especially one that sells products, 3PL services can handle these logistical tasks for you, freeing you up to focus on other important parts of your business.
Third-party logistics can make or break your business, especially if you’re in the e-commerce sector. According to a Capgemini study, fast and reliable shipping is a big deal for customers. The study found that 74% of satisfied customers are likely to buy from the same retailer again. That’s a lot of repeat business you could miss out on if you don’t get your logistics right. And that’s where 3PL comes in. It helps you deliver a service that keeps customers coming back.
How Does 3PL Work?
There are many different aspects of the supply chain process that 3PLs manage from the start of the order fulfilment process to the end, where the product is delivered to the customer.
Order fulfilment is the end-to-end process of your supply chain operations that starts when a customer places an order and ends when they receive their package. 3PL companies streamline this process by automating tasks like picking, packing, and shipping. This not only speeds up delivery times but also reduces the chance of errors like sending the wrong item. For example, if you sell electronics and someone orders a smartphone, your 3PL partner will pick the phone from your inventory, pack it with the right charger and manual, and then ship it to your customer, all while updating the tracking info.
Managing Your Inventory
Inventory management is one of the key services offered by 3PL providers. Third-party logistics partners store your products in their warehouses and keep track of how much stock you have and where it’s located. This is crucial for businesses, especially those that sell a variety of products. Good warehouse management ensures you never run out of stock or overstock items, saving you both time and money. For example, if you sell handmade soap, a 3PL partner would store your soap bars and keep track of how many you have left. This helps you avoid running out of popular scents or overstocking on less popular ones.
Picking and Packing
Picking and packing are the steps between an order being placed and it being shipped. A 3PL partner will pick the right items from their warehouse and pack them securely for shipping. It’s a small but crucial part of making sure your customers get what they ordered and that it arrives in pristine condition. For example, if someone orders a fragile item like a glass vase, the 3PL company will ensure it’s wrapped securely in bubble wrap and placed in a box that keeps it safe during shipping.
Couriers and Shipping
Shipping is another major part of third-party logistics. Once a customer places an order, the 3PL company picks the product from the warehouse, packs it, and ships it out. 3PLs often have deals with couriers, which means you benefit from lower shipping rates than you would on your own. Plus, they handle all the paperwork and tracking, so you don’t have to worry about it.
Effective returns management can make a big difference to your customer satisfaction levels. 3PL partners often handle returns on your behalf, making the process smoother for you and your customers. They’ll receive the returned items, check their condition, and either restock or dispose of them based on your guidelines. Let’s say a customer wants to return a shirt because it’s the wrong size. Your 3PL partner will receive the returned shirt at their warehouses, check it for any damage, and either put it back in stock or follow your instructions if it can’t be resold.
3PL in Different Industries
Third-party logistics isn’t just for online retailers, For ecommerce businesses, 3PL is often essential. Let’s look at a couple of examples to see how it fits into different industries.
3PL in Book Fulfilment
If you have an online bookshop, a 3PL provider offering book fulfilment services can store your books, manage your inventory, and handle all the shipping. This frees you up to focus on things like customer service and marketing.
3PL for Beauty and Cosmetics
The beauty and cosmetics industry has its own set of challenges, like sensitive products that need special storage conditions. For example, if you sell organic skincare products, a 3PL provider can ensure they’re stored at the right temperature and humidity levels. They can also handle the packing and shipping, making sure your products reach the customer in perfect condition.
3PL for Electronics
Electronics often require careful handling and sometimes even special storage conditions. Let’s say you sell high-end audio equipment. A 3PL provider can store your products in a secure, climate-controlled environment. They can also manage the picking, packing, and shipping, ensuring your delicate electronics reach the customer undamaged.
At Delta Fulfilment, we have experience in e-commerce fulfilment in a wide range of industries, from food and beverages to pet supplies. Our eCommerce fulfilment services provide you with business support so you can focus on more important aspects of your business, and your customers get the first-class delivery experience that they deserve. It’s that simple!
Third-Party Logistics Advantages
Understanding the advantages of working with a 3PL partner can help you decide if it’s the right choice for your business. Let’s dig into some of the key benefits.
One of the main reasons businesses turn to 3PL is to save money. Like Delta Fulfilment, most 3PL providers have special deals with couriers, which means you can benefit from lower shipping rates. At Delta Fulfilment, we have a large network of shipping partners, so we aren’t tied down to one specific provider and we can always get the best deals and the quickest shipping for our customers.
Time is a resource you can’t get back, and 3PL helps you save it. By outsourcing tasks like inventory management and shipping, you free up time to focus on other important aspects of your business. Imagine not having to worry about packing orders during the holiday rush!
3PL providers know the best ways to store different types of products, how to optimise shipping routes, and how to manage returns efficiently. For instance, if you sell perishable items, a 3PL provider would know how to store them properly to extend their shelf life. The team at Delta Fulfilment have run direct-to-consumer (D2C) eCommerce and Amazon businesses themselves, so not only do we have this expertise, but we’ve been in your shoes too!
One of the less obvious but highly valuable benefits of using third party logistics is how it can speed up your business growth. With logistics taken care of, you can focus on expanding your product range, entering new markets, or ramping up your marketing efforts. For example, if you want to start selling internationally, a 3PL provider with global capabilities can make that transition much smoother. They can handle the complexities of international shipping, like customs and tariffs, allowing you to grow your customer base without getting bogged down in details.
Choosing a Third-Party Logistics Provider
When choosing a 3PL provider, there are several factors to consider. For example, if you’re a small business that only ships within the UK, you’ll want a 3PL provider that specialises in domestic shipping. Alternatively, if you’re planning to go global, you’ll need a provider with international shipping expertise.
Tips for Making the Right Choice
- Check reviews: Look at customer reviews to get a sense of the 3PL provider’s reputation.
- Ask for references: Don’t hesitate to ask for client references and actually call them.
- Visit their warehouses: If possible, visit the 3PL’s warehouse to get a feel for their operations.
Questions to Ask a 3PL Provider
Before you sign on the dotted line, here are 10 questions you should ask a potential 3PL provider:
- What services do you offer?: Make sure they provide all the services you need.
- Do you have experience in my industry?: Industry expertise can be a big plus.
- What are your shipping options?: Find out if they offer both domestic and international shipping.
- How do you handle returns?: Understand their process for managing returns.
- Can I visit your facility?: A tour can give you a good sense of their operations.
- How do you handle inventory management?: Make sure their system fits with your needs.
- Do you offer same-day dispatch on orders?: Being able to offer same-day shipping is very important when 56% of shoppers believe it is.
- Do you offer tracking and reporting?: Real-time data can be very useful.
- Do you offer custom packaging?: For consistency in your brand experience, custom packaging is essential.
- Do you have a pre-built integration with my eCommerce platform?: Seamless and easy integration with your eCommerce platform of choice makes it easy for you to have a hands-off experience.
You’ll be pleased to know Delta Fulfilment tick all these boxes!
Ready to Partner with a 3PL?
From cost and time savings to expert logistics support, 3PL offers a range of benefits that can help your business grow and thrive. Why not make it a smooth transition by working with experts? At Delta Fulfilment, we have years of experience in providing top-notch 3PL services tailored to a variety of industries. Get in touch with us to find out how we can help your business reach new heights.