What is a 3PL? And 5 Benefits for Your Ecommerce Business

It’s what every ecommerce business owner wants – success leading to business growth. Let’s face it, when the orders come rushing in it’s time to start jumping for joy… that’s if you have time. A sudden rush of orders or even a steady growth in your business can also present some logistical challenges. Finding the time to do anything other than fulfilling orders, ensuring you have enough storage space and can easily find what you need quickly, or even dealing with returns are some of these challenges. So, if the garage is overflowing, or you just don’t have enough time for the day-to-day operations of your ecommerce business, it may be time to consider partnering with a 3PL.

What is a 3PL?

A 3PL, or Third Party Logistics, is a company that specialises in managing part or all of your business’s logistics and transportation. Everything from warehouse storage to fulfilling orders and even handling returns can be managed by a 3PL. Partnering with a 3PL will lessen your workload, no matter the size of your business. Simply put, you can use a Third Party Logistics provider to manage your logistics operations productively and cost-effectively.

5 Key Benefits of using a 3PL company

There are a number of benefits of using a 3PL company for all your warehousing, pick & pack, and ecommerce fulfilment. Partnering with a 3PL allows you to streamline and scale your fulfilment operations, saving you time and money. Let’s go through five of the key benefits of using a 3PL company.

1. Scalability

If you have experienced the growth of your ecommerce business, you will have considered how to manage storage and order fulfillment. Will you need a warehouse, and how big does it need to be? What about the staff? What equipment and insurance will you need? One of the main advantages of a third-party logistics provider is flexibility when it comes to business scale. If you have a sudden influx of orders, you need to manage seasonal orders and industry fluctuations, or you even experience a dip in sales, a 3PL can provide you with flexible warehouse storage and order fulfilment without the worry of investments going to waste.

2. Drive cost savings

If you think working with a 3PL will be too expensive, it’s time to look again and consider the areas where you will save money. In fact, according to the Annual 3PL study, 71% of 3PL users agree that using 3PLs has contributed to reducing overall logistics costs for their business. Some of the cost savings you could benefit from include:

• As 3PLs work closely with delivery companies and place large orders, most will have access to lower shipping rates, which can mean savings for you and your customers.
• Finding a suitable and affordable warehouse can be difficult. A 3PL has one ready and waiting for you, with the space you require at any moment.
• Using a 3PL for all your ecommerce order fulfilment purposes means you don’t need to employ your logistics staff, saving you costs in HR, leave, or sickness.

3. Expertise & Efficiency

It’s obvious really – one of the key advantages of working with a 3PL is that they know exactly how to handle every aspect of your supply chain, including things like warehouse health and safety regulations. With a 3PL there is no need for you, or your staff, to learn how to drive a forklift for instance! Years of experience in logistics also means a 3PL can identify problems in your supply chain you would never have thought of. They efficiently arrange the entire shipping process, including negotiating rates, booking the transport, loading shipments, and even handling returns.

4. Optimised Inventory

While most businesses use Third Party logistics companies to optimise the storage and delivery functions of their ecommerce business, there are other advantages. This is the age of digital logistics, and most good 3PL companies can provide inventory tracking and management software that seamlessly integrates into your existing sales platform.

With real-time tracking, at any moment in time, you have a precise view of your current orders and stock levels, providing you with insights to help analyse, plan, and manage your business activity. Your orders can also move directly from your online shopping cart to your warehouse logistics, saving you valuable time and energy and resulting in more efficient customer service.

5. Customer Satisfaction

Happy customers drive brand loyalty and set a business up for a better shot at growth. In fact, in the era of ‘customer first’, customer experience is the key brand differentiator that drives sales and grows customer loyalty. According to a PWC study, 73% of people say that customer experience is the most important factor in buying decisions. Working with a 3PL who understands the importance of customer service can make the difference between losing or retaining that all-important customer and can lead to good reviews, repeat orders, and strong recommendations. With a 3PL, you can offer your customers a range of delivery options at different prices, including next-day delivery and a swift and efficient returns and exchange service. A win-win for you and your customers.

Conclusion

Outsourcing your operations to a 3PL who understands the logistical aspects of your business is the best way to save time and resources. The value a 3PL provider can bring to your business includes better customer service, logistics expertise, cost efficiencies, and business scalability.

The real advantage is that instead of being distracted by filling boxes, dealing with returns, and other order fulfilment tasks, you have more time to put towards the work that will truly build and grow your ecommerce business. Things like marketing, strategy, and product development. A 3PL with core competencies that are the right fit for you will also mean a long-term partner interested in generating growth for your business.

This article was written by Stocka 3PL. Stocka 3PL understands that growing your ecommerce business is not just about getting the right products to your customers on time, it’s more than that. To find out how Stocka 3PL can help your ecommerce business, visit their website.