Third-party logistics or 3PL providers can help eCommerce businesses with their supply chain operations. 3PLs offer a wide range of specialties that earn the trust of different industries, including carriers, manufacturers, and retailers.

In essence, an eCommerce business would treat 3PL as their drop shipping partner. Learn more about a 3PL’s capabilities to understand how it can improve your eCommerce operations.

What Does a 3PL Do?

3PLs are multi-specialists in the supply chain and logistics industry. Various industries work with 3PLs, expecting specific tasks, including:

• Carrier Network Retention: 3PLs can retain customized degrees of data from their partners’ customers. In telecommunication, carrier networks provide communication services. Retaining carrier network data offers companies insights into their customers’ activities and preferences.
• Consulting Services: 3PLs offer strategic advice that eCommerce companies can apply to their decision-making procedures. Consulting jobs may involve marketing, operations, financials, compliance, human resources, information technology, and legal assistance.
• Drop Shipping: Businesses can count on their 3PL partner to keep the products they offer, freeing up space in their company. When a 3PL serves as a drop shipping retailer, their partner company no longer needs to worry about logistics as the 3PL will take over the shipping process.
• Invoicing and Auditing: 3PLs can act as recordkeepers for businesses. Invoices keep businesses organized in terms of their transactions with their partners. At the same time, 3PLs can utilize the records for auditing purposes.
• Order Processing: 3PLs can take over all the processes involved when a customer places an order in an eCommerce company, including converting quotes, printing shipping papers, shipping orders, and invoicing orders.
• Software and Hardware Solutions: 3PLs can offer programs that perform the time-consuming tasks that eCommerce businesses may want to automate. Similarly, they offer solutions for any issues that physical devices may encounter.
• Supply Chain Management: 3PLs can take over an eCommerce business’s entire production flow. These third parties can oversee raw components up to final products, should their partners require them to do so.
• Warehousing: 3PLs can serve as an eCommerce business’s storage of physical goods to save them space. 3PLs will keep these items until a customer pays for a product, which they will then distribute accordingly.

When looking for a 3PL to partner with, be sure to know what your business needs from them. Consider discussing your needs with our experts at OGL. We will gladly help you assess your business needs and determine your best solutions.

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The eCommerce-3PL Relationship

Why would an organization that is focused on eCommerce partner with a 3PL? An eCommerce business can get multiple benefits with a 3PL partner because of its wide range of scalable and unique services. 3PLs are surely going to impact eCommerce businesses of all sizes by:

Improving Customer Services

Partnering with a 3PL grants eCommerce companies access to advanced tools and software that update clients instantly. The immediate notifications mutually benefit companies and their customers since the current business landscape is so fast that people expect instant answers.

When customers place an order for a product with an eCommerce business, its 3PL partner can pick it up. It will pack the item, ship it, and communicate with the customer. With advanced technology, 3PLs can even connect with the customer through their preferred mode of communication.

Finding Reliable Carriers

Legitimate 3PL companies have established relationships with multiple shipping carriers across various modes. As such, eCommerce businesses partnering with a 3PL will gain access to a wide network of connections for their delivery needs.

3PLs can even negotiate shipping rates with their clients, helping them reduce overhead expenses. Overall, having immediate access to the right carriers through a 3PL company gives eCommerce businesses of all sizes a chance to boost profitability. They can save time, effort, and expenses compared to going through various carriers without direction.

Cutting Expenses

Businesses that focus on eCommerce come in different sizes. Smaller eCommerce companies may not have as many resources, leading to thinner profit margins. Considering the competitive nature of pricing and shipping costs, smaller online companies must be extremely mindful of their budget.

3PLs are single companies that offer multiple services. So, smaller eCommerce businesses will have an all-in-one solution by partnering with a 3PL provider. 3PLs take away most burdens associated with operating costs, freeing up their budget.

Offering Flexibility

3PLs are flexible partners. An eCommerce company will greatly benefit from this because of the unique nature of business across various industries. A 3PL will adjust to the needs of eCommerce operations to ensure it meets their specific needs.

3PLs can also scale back their range of services or even expand them depending on the demand volume an eCommerce business sees in a year. Companies that get busier during their peak seasons (such as retailers during the holidays) will be no problem for 3PLs since they can ramp up operations and adjust accordingly.

What Are eCommerce Fulfillment Needs?

An eCommerce business needs to fulfill its promises to provide goods or services to a customer. When someone orders something from an online business, that business must have fulfillment measures in place to follow through with their offers. Usually, a business’s fulfillment needs include:

• Product Receipt: An eCommerce business will receive an order for a product they advertise on their online store.
• Inventory Management: The eCommerce business will review its inventory to see if the customer’s order is available.
• Product Storage: An eCommerce business will keep the products in a dedicated warehouse.
• Product Picking: The eCommerce business will pull out the correct products from their designated storage.
• Order Processing: The eCommerce business will work on a customer’s specific order.
• Parcel Shipping: The eCommerce business will pack its customer’s order for delivery
• Returns Management: The eCommerce business will handle potential product replacements in case of damages or errors.

With a 3PL partner, eCommerce businesses can leave all these fulfillment needs to a dedicated team of specialists. Thus, the eCommerce business can focus on its core competencies while its partner will oversee all the processes involved in satisfying a customer’s order.