Third party logistics (3PL) can transform your business. But what is 3PL?
Find out here in this complete guide which covers everything you need to know about Third Party Logistics.
The 3PL market exceeded 1 trillion USD in 2019, and it is only expected to grow more and more as time goes on. Quite simply, the demand for 3PL is growing exponentially as more companies find out about it.
But what is 3PL, how does third party logistics work and, most importantly, how can it change your business for the better?
To learn about the benefits of third party logistics, just keep reading. We’ll cover everything you should know about the importance of 3PL, how it can help your business and how to choose a 3PL company.
What Is 3PL?
3PL is a short-hand version of “third-party logistics.” This term refers to the process of outsourcing various logistics revolving around e-commerce. These logistic processes include warehousing, managing inventory, fulfilling orders, and more.
Third-party logistics came about as an easier way for business owners to manage their e-commerce orders. With automated order fulfilment, 3PL can help e-commerce merchants take a better hold of their online orders.
With a variety of services, your online store is bound to find something advantageous to help you provide a better service to your customers.
How Can 3PL Help Me?
There are many benefits to working with a 3PL provider, no matter what specific services each 3PL offers. They all give online store owners an easier way to manage their shipments.
Overall, 3PL companies have several benefits that apply across the board, including more accurate and faster deliveries, high-volume deliveries, cost effective stock management, and the critical expertise in this specific – and sometimes complicated – area of logistics.
Let’s take a look at each area in a bit more detail…
Deliver Accurately and More Often
As your online business grows, you may face issues ensuring all of the packages are getting delivered quickly and correctly. A 3PL company can help with this.
By managing your inventory and handling packaging and shipping, 3PL companies undertake the bulk of the work that is involved with owning an online store. You would no longer have to worry about getting those packages out yourself.
Along with this, 3PL companies can help you expand your delivery capabilities. Without a 3PL company, many e-commerce merchants aren’t able to deliver to a large area. With a 3PL company, your potential for delivery grows.
3PL companies have a vast network of various fulfilment centres. Because their fulfilment centres are scattered across the country (and sometimes, the continent), 3PL companies can handle coverage that far exceed your delivery capabilities.
Save You More Money
Because 3PL companies have multiple locations, you will be paying less for shipping. You should also consider that you don’t have to spend money on renting space for your own fulfilment centre.
Furthermore, you don’t have to consider spending money on the required technology and staffing it takes to operate a fulfilment centre.
By working with a specialist 3PL, you’ll find that you’re cutting costs in several different places. And the money you save can go towards bettering your e-commerce store in a variety of ways, such as offering more products or reducing your customer’s delivery charges.
Save You More Time
By working with a 3PL, you’ll also be saving yourself a lot of time. That’s because, the very best 3PL companies take the tasks associated with organising, packaging, and delivering orders away from you completely.
You can use this extra time you now have to continue growing your business and building your relationship with your customers. Alternatively, you could write up a new marketing campaign or diversify your product offering.
Whatever you decide to do with this time, you’ll be relieved to know that you aren’t spending it waiting in a line at the post office!
Trust in the Experts
If you were to handle all the processes involved in shipping your store’s items from start to finish, you would have to become an expert in all the logistical processes involved in e-commerce. This would not only take up a lot of your time, but also a great deal of effort, and probably a lot of your money, too.
If you work with a 3PL company, you’re going to be leaving the shipping to the professionals. 3PL companies have the resources necessary to handle these services, end-to-end, as well as implementing the most up-to-date technologies and staying on top of the latest e-commerce trends. It’d be a lot to ask for you to do all of that yourself.
3PL companies can handle the constantly changing methods and suggestions of the e-commerce world and since they know how to correctly optimise their practices, you don’t have to worry about yours.
Should I Work With a 3PL Company?
If you’re just starting out, you may be wondering ‘why use third party logistics at all’?
Afterall, your e-commerce store may not be ready to start a relationship with a 3PL company just yet. You don’t want to work with these companies unless your store is ready so that you can maximise the benefits that they have to offer.
Let’s look at some important indicators to help you decide if you’re ready to use a 3PL company to improve your e-commerce busines…
You Can’t Handle the Order Volume
If your online store has grown to the point that you can no longer handle the number of shipments you need to make, it may be time to employ the help of third-party logistics.
You don’t want to fall behind on the orders your customers are making, so if you’re in this position, it sounds like it’s time to get some help. And getting that help from a 3PL company is much more convenient – and will probably be much cheaper – than trying to work out this complex upscaling yourself.
There isn’t an exact number that you should wait for when you’re choosing whether or not it’s time to get help from a 3PL company. You should simply evaluate whether or not your orders are becoming too much for you to handle on your own – it’s something you’ll know instinctively.
You Can’t Store Anymore
Some online business owners run into an issue when they can no longer support how much inventory they have.
Many people find that they have this problem and turn towards buying a facility to house their inventory. While this may be fine for a team to work with in the short-term, it is not sustainable in the long-term or for a single worker.
If your inventory is overflowing because of the number of orders you’re juggling, it may be time to get into contact with a 3PL company.
Which 3PL Company Should I Work With?
So, hopefully by now you have a better understanding of what 3PL is.
In a nutshell, third-party logistics is something that could save you from an overflowing business, allowing you to keep growing but providing the peace of mind that your e-commerce logistics are under control.
If you’re looking for a 3PL company to work with, you should consider Citicare. With more than 35 years of experience that we can call upon in order fulfilment services, our team at Citicare can help you with all of your fulfilment and 3PL needs.
Feel free to explore our services and contact us with any questions. We’re happy to help you make the most of your online store.