If you run an online store, you would readily agree with me that fulfilling customer orders are one of the most important aspects of the business. And, as your business grows, the stress of handling customers’ requests grows, hence the need for 3PL.
In this article, we will try our best to provide you with all the information on 3PL (third-party logistics) and all you need to make an informed decision.
What is Third Party Logistics?
We are glad you asked. First off, the term “third-party logistics” (or “3PL”) in online retailing describes the practice of outsourcing the different facets of the logistics chain. The chain includes but is not limited to the following; storage, transportation, and order fulfilment.
For all these processes, third party logistics providers will help optimise the efficiency and effectiveness of online retailers.
How did the word come about?
To be honest with you, we have no idea because no clear consensus exists on who first used the word. However, over time, it became common practice for stakeholders and businesses to hire companies outside to handle all supply chain management in the early 1970s and 1980s.
Since then, the word has become standard throughout the logistics industry.
To illustrate the utility of 3PL, let’s imagine a customer buying something from an online store and clicking ” Submit order”. What happens next? Just keep reading!
Receiving
Without stock on hand, 3PL cannot fulfil shipping requests. The term “receiving” is a broad term that describes the acceptance and storage of incoming inventory. All these occur in a third-party logistics warehouse.
It’s important to note that when it comes to receiving inventory and storage, different 3PL exist.
Some require you to fill out a Warehouse Receiving Order (WRO) first. Why? To keep track of all incoming inventory, so your requests get responded to early.
The Advantages of Using a Third-Party Logistics Warehouse
We would like to emphasise again that not all third-party logistics providers (or “3PLs”) are the same. This is because storage capacities vary.
Therefore, it is expedient for you to know that when choosing a 3PL, you should check if they have enough room to accommodate the expansion of your business. Every business hopes for its product offerings and customer base to expand; the same must be true for the storage capacity of your 3PL.
Below are the key advantages of using third-party logistics.
Picking
The moment a consumer puts in an order, the order is processed. What happens next? The 3PL fulfilment procedure gets underway.
You may have heard of the phrase “pick-and-pack” fulfilment. Well, this is it.
Some 3PLs manually upload orders to their systems. This will require using tools such as spreadsheets to keep track of the orders, shipments, and even clients. However, using this method makes order processing more difficult and time-consuming.
Other 3PLs have upped their game by providing and incorporating cutting-edge innovation that can be effortlessly integrated with your existing online store or marketplace.
You could track your shipments, keep a tab on your inventory or stock levels or monitor other relevant data in one central location. Thanks to technology!
Shipping
Some third-party logistics go a step further by buying and printing shipping labels for you.
You could even get the best delivery rates.
You have carriers picking up packages from their distribution centres and having them delivered to you at your doorstep. Some of these carriers include DHL, USPS, UPS, etc.
What do you know about third-party logistics? Share your thoughts with us.
