The digital revolution has ushered in an era where online shopping is not just a convenience but the standard.
With this shift, consumer expectations have skyrocketed. They demand rapid shipping, real-time tracking, and a seamless return process.
For retailers, meeting these demands while managing the intricacies of logistics can be daunting. This is where third-party logistics (3PL) comes into play, offering a lifeline to modern retailers navigating the complex world of ecommerce.
WHAT IS 3PL IN ECOMMERCE?
In ecommerce, 3PLs plays a pivotal role in streamlining the operations from the point of sale to the end customer. Essentially, a 3PL is an outsourced service provider that manages all or a significant part of an organization's logistics requirements. This encompasses a wide range of services, from warehousing and inventory management to order fulfillment and transportation.
As ecommerce businesses expand, the challenges of storing products, managing inventory, packing orders, and shipping them to customers worldwide become increasingly complex.
This is where 3PLs step in.
They possess the expertise, infrastructure, and technology to efficiently handle these logistical challenges, allowing ecommerce businesses to focus on their core competencies, such as product development, marketing, and customer service.
Moreover, 3PLs bring scalability to the table.
For growing ecommerce platforms, sales volumes can fluctuate due to seasonal demands, promotions, or new product launches. 3PLs can adapt to these changes, scaling up or down as required, ensuring that logistical operations run smoothly regardless of the sales volume.
In essence, 3PLs in ecommerce act as the logistical backbone, ensuring that products reach customers promptly and efficiently, enhancing the overall customer experience.
WHAT ARE THE KEY ROLES OF A 3PL?
3PLs work with businesses to help them handle warehousing, logistics, and more. Key roles of a 3PL include:
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Storing products at an agreed location that is most beneficial to the business
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Keeping track of stock levels
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Keeping track of product locations across warehouses
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Picking, packaging, and shipping orders
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Managing delivery logistics, for instance, air, sea, or land travel
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Using advanced software to monitor order progress as well as inventory
Through 3PLs taking on the above roles, businesses can step back from logistics and focus on building upon their success.
HOW DO 3PLs WORK?
How 3PLs work with your business may change depending upon your needs. Typically the 3PL order process looks like this:
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When you first begin working together, the 3PL accepts your inventory into its warehouse, and organises SKUs based on elements like picking speed or product popularity.
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When the customer places an ecommerce order, it gets pushed through by the business to the 3PL. Read our step-by-step guide to 3PL integration if you would like to integrate with your 3PL to automate orders.
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The order is added to the picking list, which is then picked by a member of the team or by an automated picker.
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Items are packed with all order details, receipts, and other requests accounted for.
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A shipping label is printed, or if the 3PL has a shipping partner, they handle the shipping label.
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The order is collected from the 3PL’s distribution centre by the shipping carrier.
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Tracking information is uploaded and synced with the customer’s order management systems for review.
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The package arrives with the customer.
THE INDISPENSABLE ROLE OF 3PL IN TODAY'S RETAIL LANDSCAPE
The ecommerce sector is booming, with projections indicating continued growth. As more consumers migrate online, the logistical challenges for retailers multiply.
A key pain point is warehousing: Where do you store goods? How do you manage inventory levels to ensure you neither overstock nor run out? Then there's distribution: How do you ensure timely delivery, especially when customers are scattered globally?
3PL providers, with their expertise and infrastructure, alleviate these pain points. They offer scalable solutions, allowing retailers to expand without logistical constraints. In summary, 3PLs handle the heavy lifting of logistics,
CHOOSING THE RIGHT 3PL PARTNER
Selecting a 3PL provider is a pivotal decision, one that can shape the trajectory of a retailer's ecommerce journey. Here are four of the most important considerations to make when choosing the right partner for your business:
- Scalability: As your business grows, can your 3PL partner keep pace? It's essential to choose a provider that can handle increased volumes without compromising on efficiency.
- Technological Prowess: In today's digital age, technology is the backbone of logistics. Opt for a 3PL provider like SEKO that offers cutting-edge IT solutions, ensuring seamless integration and real-time tracking.
- Geographic Reach: Your customer base is global, and so should be your 3PL provider's network. Ensure they have a presence in your target markets and can handle cross-border logistics with ease.
- Customer Service: Logistics is riddled with unpredictability. In such scenarios, a responsive 3PL partner can make all the difference, swiftly addressing issues and minimizing disruptions.
WHY SHOULD YOU CONSIDER USING A 3PL?
Working alongside a 3PL can be incredibly time and money-saving for many businesses, but for many small businesses, it may not yet be the right fit. Consider the below questions if you are considering working with a 3PL.
CAN YOUR BUSINESS HANDLE A SURGE IN DEMAND?
When an unexpected and consistent surge forces your business to expand rapidly, many fall short of meeting order accuracy targets and keeping customers satisfied.
If your business is scaling too rapidly to adequately manage each aspect of it, working with a 3PL can be a great way to ease that burden. 3PLs are used to high-volume, high-demand products, and will be able to manage orders and meet expectations.
ARE YOU RUNNING OUT OF INVENTORY SPACE?
Inventory space can be expensive and may be overlooked if your business is expanding rapidly.
Working with a 3PL puts you in a position to truly consider your required warehouse space. If you combine that warehouse space with the 3PLs expertise in warehouse management and order fulfilment too, you may save money over your current setup.
ARE YOU FULFILLING A CONSISTENTLY HIGH NUMBER OF ORDERS EACH DAY?
If your regular orders are consistently high, it may be time to look into the services of a 3PL, which can free up manpower for continuing to push your business further.
When working with 3PLs, you should also consider whether they lean into automation within the fulfillment process. Automation can save you a great deal of time and money.
DO YOU WANT TO OFFER CUSTOMERS A BETTER EXPERIENCE?
If you’re struggling with customer satisfaction due to an insufficient fulfillment process, 3PLs may be able to help. 3PL fulfillment processes often consider the possibility that a business may require a next-day delivery service, or delivery services on pre-arranged dates.
3PLs are also highly proficient in arranging shipping strategies like multi-carrier shipping, and zone skipping. These strategies can allow for your shipment to arrive even faster, allowing you to hit delivery targets or even exceed them.
When customer satisfaction is improved through stronger fulfilment processes and delivery strategies, it is reflected through reviews, which lead others to your website.
ARE YOU EXPANDING INTERNATIONALLY?
International expansion can be exceptionally tricky to navigate, particularly if you do not have access to new shipping carriers or partners.
3PLs can be a huge help here thanks to the already broad range of contacts available to them. These contacts can help you avoid spending time and money on finding new carriers and partners that perform the work to your expectations.
ARE ORDERS BECOMING MORE COMPLEX?
As businesses expand and new products are onboarded, the order and shipping process can become more complicated.
For example, you might suddenly need connections to shipping carriers that can manage climate-controlled shipping. Or it could be that multiple products are required for an order that requires a dedicated mode of transportation.
3PLs can manage these orders through experience and connections that allow them to fulfill rapidly while meeting the needs of the item.
THE EXPANDING ROLE OF 3PL IN THE RETAIL LANDSCAPE
The retail industry, with its ever-evolving dynamics, has always been on the lookout for strategies to optimize operations and enhance customer experiences. In this context, the role of 3PLs have emerged as a cornerstone.
As retailers grapple with the complexities of global supply chains, inventory management, and timely deliveries, 3PL providers offer a beacon of efficiency and reliability. Recent industry analyses and market studies underscore a pronounced trend: an increasing number of retailers are actively seeking collaborations with 3PL specialists. This shift isn't just a fleeting trend; it's rooted in tangible outcomes. Retailers partnering with 3PL providers often report streamlined operational processes, significant reductions in overhead costs related to warehousing and transportation, and a boost in customer satisfaction due to the consistent and timely fulfillment of orders.
DIVERSIFIED INFLUENCE OF 3PL: BEYOND ECOMMERCE
While the synergy between 3PL and ecommerce is well-documented, the scope of a 3PL's influence is vast and extends to numerous other sectors. Let's delve deeper into some of these industries:
Manufacturing:
The manufacturing sector, with its intricate supply chains and the need for timely raw material deliveries and product distributions, stands to gain immensely from 3PLs. Providers like SEKO can offer specialized solutions, ensuring that production lines run smoothly without interruptions due to logistical bottlenecks.
Pharmaceuticals:
In the pharmaceutical industry, precision and timeliness are paramount. Whether it's transporting sensitive medications under controlled conditions or managing global distributions of vaccines, 3PL providers play a crucial role. Their expertise ensures that pharmaceutical products reach their destinations in optimal conditions, adhering to all regulatory standards.
Automotive:
The automotive industry, with its global supply chains and just-in-time production models, requires a logistics partner that can keep pace with its demands. 3PL providers offer solutions that encompass everything from the transportation of delicate components to the final distribution of finished vehicles.
Agriculture:
The agricultural sector, with its seasonality and perishable products, presents unique logistical challenges. 3PL providers can offer cold chain logistics, ensuring that produce reaches markets fresh, maximising shelf life and reducing wastage.
Electronics:
With rapid technological advancements, the electronics industry operates on tight schedules, from sourcing components to launching products. 3PLs, with their efficient warehousing and distribution networks, ensure that product launches and distributions occur seamlessly.
In essence, while ecommerce remains a significant beneficiary of 3PL services, numerous other industries are also harnessing the power of 3PL.
These sectors recognize the value of having a logistical partner that not only understands their specific challenges, but also crafts bespoke solutions to address them. As industries continue to globalise and supply chains become more complex, the role of 3PL providers like SEKO will only become more pivotal.
THE PROS AND CONS OF 3PLs
3PLs are one of the most powerful tools available to businesses looking to update their inventory, fulfillment, and shipping processes. Before taking the next step towards a 3PL partnership, though, be sure to read our pros and cons list to ensure you’re making the right decision for your business.
JOIN THE 3PL REVOLUTION WITH SEKO
In the dynamic world of ecommerce, where consumer expectations are ever-evolving and competition is fierce, 3PL emerges as a beacon for retailers. It promises efficiency, scalability, and the assurance that logistics, a critical business component, is in expert hands. SEKO, with its unparalleled expertise and innovative solutions, is leading the 3PL revolution, empowering retailers to conquer the ecommerce frontier.
In the end, SEKO's commitment to excellence and its unwavering focus on delivering tailored 3PL solutions make it an invaluable ally for retailers. As the ecommerce landscape continues to evolve, partnering with a seasoned 3PL provider like SEKO is not just a strategic move; it's a game-changer.
