It’s only sometimes the most effective company approach to keep everything in-house. It is especially true for less established online businesses. As a result, many eCommerce businesses have flourished despite starting from scratch every time they want to grow.
Thanks to third-party logistics providers, you may outsource expert help with a crucial component of your online store’s operations. That frees up resources that may be used for advertising, expansion, and happy clients.
For this reason, there are third-party logistics providers. This comprehensive guide will teach you all you need to know about 3rd Party Logistics providers.
What is logistics done by a third party?
Third-party logistics, also called 3PL, is the same as a fulfillment warehouse or a fulfillment center. 3PL companies also do many of the things that order fulfillment companies do. Some of third party logistics examples are:
- Warehousing
- Keeping track of stock
- Sending and getting
- Freight shipping with FTL and LTL
- Picking and packing
- Kitting and making changes
- Backward logistics (returns)
An eCommerce fulfillment company is a 3rd Party Logistics company. It gives you all the services you need to hire someone else to run your logistics operations.
Different 3PL companies focus on different kinds of fulfillment and storage. Some people have the tools to do cold fulfillment. Food that needs to be frozen or chilled can be stored and shipped from these warehouses. Other 3PL companies are ready to store and ship dangerous materials. Red Stag Fulfillment is one of the best third-party logistics companies for heavy, big, and expensive products.
What’s the difference between 3PL and 4PL?
If you look up information about 3PLs, you might come across the term 4PL. A 4PL adds another level of separation between online stores and the 3PLs that ship their goods: What is third party logistics? When a company hires a 4PL, the 4PL manages and sets up 3PL services for the business. Some people call this “double brokering.”
4PL companies often take care of all parts of a client’s supply chain, from 3rd Party Logistics services to manufacturing to buying inventory.
The process of 3PL order fulfillment
If you are thinking about working with a 3PL company or are new to outsourcing shipping, you might need to learn what goes on in a 3PL fulfillment center.
But the 3PL fulfillment process shouldn’t be a mystery, and it doesn’t have to be.
So, when a customer clicks “Submit Order” on your online store, what happens at the 3PL’s <a href="https://foxbusinesstips.com/index.php/2023/01/06/how-to-find-human-resources-jobs-in-usa-tips-tricks-2/" title="<strong>How to Find Human Resources Jobs In USA– Tips & TrickseCommerce warehouse? Let’s look at the whole process from beginning to end.
Receiving
A 3rd Party Logistics can only ship orders if they have the goods in stock. When inventory is “received” in a 3PL warehouse, the inventory is accepted and then put away.
Each 3PL has ways to receive and store inventory and the space to do so.
At ShipBob, for example, we ask clients to fill out a Warehouse Receiving Order (WRO) so that we know what products and how many units we will be getting. Role of a third party logistics company. It helps us stay organized and on schedule with receiving, so we can start filling your orders faster and better.
3PL Warehouse
As soon as we get your inventory, we put it in our fulfillment centers. Each SKU has a specific place to be stored, like a shelf, a bin, or a pallet.
Different 3PLs have different amounts of storage space; not all warehouse space at 3PLs is the same. It’s important to work with a 3PL with more storage space than you need for your current inventory. As your product line and order volume grows, so must your 3PL storage.
Picking
The 3rd Party Logistics fulfillment process starts as soon as a customer places an order. (You may have heard the term “pick-and-pack fulfillment” before; this is the first half of that.)
Some 3PLs need you to enter orders into their system by hand. Sometimes, this is done with the help of spreadsheets that have information about orders, shipping, and more. It can be a hard and inefficient way to keep track of orders.
Packing
When everything in an order has been chosen, it’s time to pack it up so it can be shipped. What kind of packing materials are used will depend on what your 3rd Party Logistics can do, what brands you like, and what is being shipped.
These are the most common types of standard packing materials:
- Boxes without labels
- Bubble mailers
- Poly bags
- Packing tape
- Dunnage
- Paper-based dunnage
- While some third-party logistics providers (3PLs) include packaging materials in their fulfillment management service pricing, others do not, treating them as an additional line item.
5 of the best 3PL services you should look for
Depending on which provider you choose, 3rd Party Logistics fulfillment services can be different in ways other than shipping orders. Third party logistics advantages and disadvantages. Here are a few of the best features and logistics services that 3PLs usually offer.
Keeping track of stock
Keeping track of your inventory is much more than just storing your goods. A 3PL should make it easy to sync your<a href="https://foxbusinesstips.com/index.php/2023/01/02/how-does-inventory-management-work-online-marketing-strategies-for-any-business/" title="<strong>How Does Inventory Management Work? –Online Marketing Strategies for Any Business inventory with your online store, see how much stock is at each 3rd party fulfillment center in real time, and proactively reorder stock to avoid running out.
Once your 3PL gets your inventory and stores it, you can check the amount on hand and the number of daily units sold for each item. Advantages of third party logistics. It gives you a clear picture of what you can send to your customers at any time.
Depending on the technology and workflows of your 3PL, you can also push real-time stock counts back to your store’s website so that customers know immediately if an item is sold out.
2-day shipping
Think about the following facts:
73% of shoppers want cheap and fast shipping. 44% of people who shop online but still need to finish their purchases do so because of the cost of shipping and handling. 24% of people have canceled an order because it took too long to ship. When you add these trends to the fact that the most popular online stores offer two-day shipping and sometimes even free shipping, it’s easy to see that customers expect to be able to click a button and get fast, cheap shipping.
As we’ll talk about in the next section, the location of your 3PL warehouse can make or break your ability to meet customer expectations by keeping inventory closer to where it will be shipped. If you work with the right 3rd Party Logistics, you can offer your customers 2-day shipping at an affordable price.
Distributed stock
When you work with a 3PL with more than one warehouse, you can split your inventory between fulfillment centers so that you can ship each order from the 3PL warehouse closest to the customer. It is known as a “distributed inventory” model.
With the right technology, 3PL companies can automate the order fulfillment process by sending each order to the best fulfillment center using powerful algorithms.
If you have customers in different parts of the country, send your inventory to more than one fulfillment center. It brings your stock closer to where you ship to, so you can offer guaranteed ground shipping in two days to customers in those areas. It can be a lot cheaper than sending something by fast air.
Fulfillment for B2B and DTC
If you use a multichannel logistics strategy, finding a 3rd Party Logistics that can handle both B2C and B2B fulfillment can be helpful. ShipBob’s B2B Fulfillment Suite and EDI capabilities allow merchants to sell throughout the entire B2B ecosystem. It includes retail dropshipping (fulfilling orders placed on the websites of big box retailers) and wholesale shipping (including to brick-and-mortar stores), which can connect with all the major retailers.
Returns management
3PLs can help you manage returns by taking care of orders that are sent back and even integrating with returns software to make the process easier for your customers. You can choose to have returns restocked, put in quarantine, or thrown away, and you’ll still be able to see what’s going on with eCommerce returns.
Conclusion
If you run an online store, order fulfillment is an important part of what you do. As your business grows, you may find that you need help to fill customer orders. Third-party logistics, also known as 3rd Party Logistics , is when a third-party business does eCommerce logistics tasks like inventory management, warehousing, and fulfillment. 3PL providers help online stores do more by giving them the tools and infrastructure they need to automate fulfilling retail orders.