The booming popularity of online shopping has led to the growth of the e-commerce industry in the past decade. Plus, people nowadays rely on online shopping to get their goods due to the COVID-19 pandemic.
Because of this increased demand, it only makes sense that you level up your game. This means streamlining your process and ensuring that your products are delivered on time.
Depending on your business model, you may be working with a third-party logistics (3PL) provider.
What is a Third-Party Logistics Provider?
A third-party logistics company provides e-commerce logistics processes. This includes inventory management, warehousing, and order fulfillment.
Many e-commerce businesses nowadays outsource their logistics to 3PL companies for various reasons. Some to optimize their supply chain, and some to cut on operation costs.
How Does 3PL Providers Work
Now that you know what a 3PL provider is, the next step is understanding how they work.
In a nutshell, a 3PL company can help you manage any of the following:
Imagine running an online business, and you need to house all your products. Instead of crowding your house or renting a warehouse, a 3PL can handle the warehousing for you.
All you need now is a system that can inform your service provider when someone orders your products. That way, they can locate and pick it, and then package and deliver it.
Doing so allows you to focus on other aspects of your online business. Some examples are product development, marketing, and client acquisition.
How 3PL Providers can Help Your E-commerce Business Grow
There is no denying that working with a 3PL company could come in handy. That said, we have listed down eight ways they can help your e-commerce business grow:
With the help of a 3PL service provider, you no longer need to locate and pick your product, pack and ship it, and then update your inventory.
That’s because they have a system that allows you to send your customers’ orders. And they use it to identify where your products are, and then prepare it for shipping.
Hence, no need to spend time to do the manual labor yourself.
About saving time, working with a third-party logistics also allows you to save money.
That’s because you no longer have to rent a warehouse. You don’t have to hire warehouse employees or delivery riders, either. That’s because your service provider can handle it for you.
Save Physical Space
Storing your products takes space. And we know how expensive renting a warehouse can be.
If you try to house your inventory, you will likely run out of space. Renting a warehouse, on the other hand, can be hefty. It can also be cumbersome since you need to coordinate everything.
What more if you have many warehouse locations?
Instead of worrying about those things, let a 3PL company handle it for you.
Let’s You Focus on Your Business
As mentioned earlier, a 3PL service provider can handle the following for you:
- Inventory management
- Order fulfillment
Hence, you can focus more on your business. This can be managing your finances, upgrading your products, or generating sales.
And when you can focus on your venture, you can find ways to make it grow.
A lot of businesses are having doubts about working with the 3PL company. That’s because they think that they always need to send order information.
But this shouldn’t have to be the case.
Most 3PL companies allow seamless integration. Meaning, they can connect with your POS system or online store’s backend, for instance.
What happens is when a person confirms his orders on your online store, your backend will automatically send the order information to your service provider. And then let them handle the rest.
This lets you save time and reduces instances of human errors when handling the product.
Handle Product Return
It happens. There will be times when a customer will have to return the product to you.
Luckily, working with a reputable third-party logistics company allows you to handle it with ease.
They can provide you with reverse logistics, wherein customers can return the product without the hassle. All you need to do is incorporate your service provider’s policies and procedures to your process.
Flexibility and Scalability
When working with a 3PL company, it is ideal to look at their scalability. This means whether their services can handle your needs depending on various factors.
Here’s the thing: You can receive a spike in demand on a particular product based on seasons and your marketing efforts.
Hence, you will need a service provider who can adjust to your business’ ebb and flow. That way, you can have a stress-free transition.
Also, you need a logistics partner that can grow with you. This could mean allowing you to ship internationally. Another is providing dedicated warehouse space for your products, as well as staff and inventory systems.
The thing is, you didn’t start a business because you’re excellent in packing boxes.
Outsourcing those tasks to a 3PL company mean entrusting them with your e-commerce logistics process.
Sure, it can be scary. But the beauty of having a logistics partner is that you can streamline your operations.
This makes you efficient, which can make your customers happy. And when your customers are happy, get ready to receive as many orders as possible.
It’s Time to Look for the Right 3PL Partner.
Scaling your e-commerce business does not mean you have to do it all on your own. You can outsource some of it, like your logistics.
But keep in mind that you should consider factors when looking for the best third-party logistics provider. And this will also depend on your e-commerce fulfillment model.
Nonetheless, working with the right partner allows you to save time and money. It also allows you to be efficient in running your business, which can make your customers happy.
Lastly, a reputable third-party logistics company lets you focus on what matters. And that is making your business grow.