What is 3PL?

3PL providers

If you’re scaling your ecommerce business, you presumably already know how difficult it can be to grow, especially in terms of logistics, shipping, and fulfilment. Product development and relationship building are difficult to accomplish while you’re negotiating shipping contracts or extinguishing fires. 

As a result, ninety percent of Fortune 500 corporations seek assistance from 3PL providers. The third-party logistics business is expected to reach $1.75 trillion in value by 2026, growing at the same rate as ecommerce. 

Third-party logistics providers are in high demand. In the warehouses of shipping and fulfilment experts, your stuff is housed and shipped to your customers. 

The following information will help you locate and select the right 3PL vendor if you’re looking to work with one for the first time or considering partnering with numerous 3PLs to diversify and reduce risk. 

What are they?

When it comes to managing the supply chain for online retailers, 3PLs (Third-Party Logistics) are a valuable resource. Warehouse and inventory management, order fulfilment, shipping coordination, retail distribution, exchanges, and refunds are among the most common 3PL service offerings. 

Finally, a merchant can focus on other elements of their business when they work with a third-party logistics providers.  

You can store your inventory at a third-party logistics provider vendor’s warehouse and have it transported directly from your manufacturers rather than maintaining your own warehouses and handling distribution in-house. Items are automatically dispatched from the 3PL’s warehouse when an order is placed online. Customers don’t give a second thought to the handoff between receiving orders and fulfilling them because the procedure is so simple and smooth with a 3PL. Merchants have the ability to focus on what they do best: developing, promoting and selling products. 

3PLs have been—and will continue to be—the secret ingredient for many successful ecommerce businesses that have weathered the recent supply chain crisis. In the previous two years, we’ve seen a number of examples of political instability, natural disasters, human resource shortages, and regulatory obstacles. 

How does a third-party logistics company operate? 

While the third-party logistics provider fulfilment process can vary based on the supplier and the services you’ve agreed on, the typical approach looks like this: 

  • Upon receipt of your inventory, the third-party logistics provider sorts and organises it in its warehouse. 
  • In the event that an order is placed on your e-commerce site, either manually or automatically, the third-party logistics provider receives the information (if its software integrates with your online store). 
  • A member of the warehouse staff is given a list of things that have been ordered and must be picked up. 
  • The receipt and order data are included in the boxes. 
  • The shipping label is printed by the third-party logistics provider or by one of its shipping carrier partners, depending on the service. 
  • In this case, your third-party logistics provider ‘s distribution centre delivers the package to the consumer. 
  • The third-party logistics provider system uploads tracking information, which is then synced with your order management system. 

For what reasons do businesses prefer to deal with a third-party logistics provider? 

3PLs can seem like a costly answer to an inconvenient workflow if you’ve never used one before. However, if you have a warehouse or brick and mortar store, you may be able to pick, pack, and ship orders yourself rather than hire third-party services. 

Choosing a third-party logistics provider before you’re swamped with orders is a good idea, but Small and medium-sized businesses (SMBs) can benefit from Third-party logistics provider, which are not just for large corporations. 

A Third-party logistics provider can also help your business grow in ways you are unable to do so on your own, so make an educated guess as to what that growth might be. 

Third-party logistics providers have a number of advantages. Your logistics will be handled by shipping and fulfilment specialists that you’ve hired. Do what you do best, and don’t interfere with others’ efforts to excel. Third-party logistics providers specialise in logistics. You’ll have more time to focus on long-term strategy if you let them handle your shipping and fulfilment.