What is Third-Party Logistics?
Third-party logistics refer to the outsourcing of operational eCommerce logistics like inventory management, warehousing, and fulfillment. 3PL providers enable eCommerce companies to accomplish more with their time through automation, efficient processes, and years of expertise.
During the late early 2000s, 3PL entities began to grow and streamline their processes given the sudden rise, success, and popularity of eCommerce stores. Now, in a world of digital shopping, trusting a 3PL entity to successfully integrate warehousing operations and transportation services into your logistical equation has never been more important.
3PL Order Fulfillment Procedures:
If you’re considering partnering with a 3PL, it’s natural to feel overwhelmed with all the moving parts and unfamiliar terminology. It shouldn’t be a mystery so let’s break things down. What does a 3PL do and how?
Receiving:
The first step in the logistical process is receiving. This involves the reception of inventory followed by its storage. A 3PL can’t fulfill orders without receiving the product in an organized and timely manner from the manufacturer. Every 3PL has specialized procedures and capacity for receiving and storing inventory.
At Drive Fulfillment, precise receiving guidelines are crucial to maintaining an operation capable of fulfilling more than 15 million orders a year. With 225 000 sq feet of space dedicated to fulfillment, organized and timely receiving procedures means that orders efficiently and accurately fulfilled.
Warehousing:
Once your inventory has been organized and stored, each product SKU allows staff to easily track a dedicated location, on a pallet, shelf, or bin. Seeking out a 3PL fit to handle your growth is important. They should have more than enough space to neatly and safely store your growing inventory.
Note: At times A 3PL can be confused with an on-demand warehousing company that just matches you with the space you need in miscellaneous warehouses without operating them.
Picking:
You’ve likely heard the phrase ‘pick, pack, ship’. The first of these integral steps in the 3PL fulfillment process comes once an order is placed and automatically funneled through a range of sophisticated eCommerce integrations. An exceptional 3PL fulfillment software like DriveLine allows for detail tracking and insights into Order Status, Best Selling Items, Sales by Geographic Location, and Inventory counts by SKU & Location.
Automatically receiving orders as they are placed helps streamline the process. Once a warehouse picking team is assigned, the picker receives a packing list of items, the exact quantities, and locations at the facility, and collects the items from their respective locations.
Packing:
It’s crucially important to not overlook packing logistics. Since all items need to be securely packed for shipping, making sure you have the most durable, cost-effective, and appealing packing materials is well worth the time and investment. It is, after all, the first impression on a customer when they receive your product.
A 3PL will help choose the best packing materials, protecting your products while achieving the lowest practical dimensional weight. This affordable pricing technique takes into account package dimensions to determine shipping rates.
While there are a variety of standard packing materials like unbranded boxes, bubble mailers, and poly bags, seeking out a 3PL with the ability to design and create custom packaging and kits that align with your branding preferences will make an unforgettable impression on the receiving party.
Shipping:
The next step in the process is shipping. The majority of 3PL’s will purchase and print shipping labels on your behalf. Whatever shipping method a customer selects is automatically integrated into the tracking details and confirmation email.
Partnering with a 3PL helps you take advantage of discounted shipping rates with carriers like DHL, USPS, and UPS. Getting your product into the hands of the end customer quickly and affordably is why a 3PL like Drive Fulfillment can make the world of difference. Leave the stress of shipping hundreds or thousands of orders to professionals.
Returns:
The majority of 3PL’s offer return processing services. Once a customer has indicated they would like to return an item, a 3PL representative will direct the return or exchange process and reach out with a return label.
Handling returns through a 3PL is a convenient way to keep inventory in one place.
Beneficial Features of Third-Party Logistical Solutions:
Inventory Management:
Managing an ever-fluctuating flow of inventory from eCommerce sales demands automatically syncing physical inventory with your online store.
Real-time inventory counts and tracking through custom warehouse management software allows 3PL’s to constantly have a pulse on available quantities and units sold per day for each product. This offers a live view into available quantities ready-to-ship so that real-time stock counts back up your store’s website.
Distributed Inventory & Discounted Shipping:
Given the large majority of customers already expect affordable and quick shipping, you don’t want to let them down. A 3PL partnership ensures that your products are stored and shipped from convenient locations at more than a discounted price. Third-party logistics service providers like Drive Fulfillment build relationships with carriers that grant the most affordable 2-day shipping rates available.
Once order sizes and quantities begin to rise, you will come to understand that managing growth from unique storage facilities around the world is the only way to guarantee 2-Day Express shipping. Working with a 3PL grants access to multiple warehouse locations worldwide. This means you can effectively spread inventory across fulfillment centers to ship each order out from the closest 3PL warehouse. This model is called distributed inventory.
Industry Expertise:
Given the time you likely give to enhancing your eCommerce business, leave the shipping and logistical ins-and-outs to industry professionals. 3PL staff are extremely well versed in the complexities of eCommerce logistics and up-to-date on the latest industry trends so you don’t have to be.
They have the technical resources and network of partners to consistently improve their supply chain and range of services. Explore the benefits of Custom Packaging, Kitting and Assembly, Direct to Garment, and On-Demand Printing.
Who Benefits from 3PL services?
Virtually any eCommerce store — regardless of platform, industry, or product category — can benefit from outsourcing fulfillment. That said, if you’re shipping more than 100 orders a month, running out of space, or desire to offer customers benefits like two-day shipping, it’s likely time to investigate a 3PL partnership.
For more information or to explore Drive, a Utah-based full-service marketing and fulfillment center, contact us today. You won’t regret taking your business and logistical prowess to the next level with best-in-class marketing, digital, and fulfillment services.
