3PLs are essential for retailers that want a better online order fulfillment process. So, why would you want to deliver orders in a short timeframe?
Well, 89 percent of shoppers expect the delivery period to be less than two days. Consumers also expect free shipping to be fast and convenient.
But, what is a 3PL What roles can a third-party logistics company play in your retail business? How do you choose one? Read on to find out.
What is a 3PL?
What is 3PL? 3PL is short for a third-party logistics company that handles supply chain processes. Your business needs such a company to manage key supply chain processes including warehousing, packaging of goods, and transportation of goods.
3PL firms exist in different types to serve different needs of businesses. Depending on your goals and needs, 3PL services offer the following benefits:
1. Customer Satisfaction
Your customers’ satisfaction is crucial to the success of your business. You may find it overwhelming to deliver clients’ orders with limited resources.
Partner with a third-party logistics provider to offer your customers fast deliveries. Your order fulfillment rates will be accurate too.
2. Time and Cost Savings
Saving time and money is one of the benefits of 3PL services. Your goal is to become more efficient as you manage both time and money.
3PL providers facilitate transportation and warehousing to make your business processes efficient. They can install various technologies or hire labor for you to reduce your operating costs.
3. Valuable Insights into Your Business
3PL providers allow you to integrate all supply chain activities and monitor payments, shipments, and returns. Their solutions help you gain better insights into your venture.
You get to track inventory, generate reports and run performance checks. Such are activities are crucial in having a company organized.
4. Access to a Vast Resource Network
Access to a vast resource network is a 3PL advantage you should explore.
Such networks allow you to expand supply chains quickly and efficiently. You can get lower overhead costs and volume discounts from the connections.
5. Lower Risks for Making Errors
You may make data errors when fulfilling customers’ orders manually.
A 3PL technology allows you to store and integrate data for accuracy and speed. You have lower risks for running into errors when using this technology.
The same applies when you partner with a 3PL company.
6. Opportunity to Explore New Markets
3PL services can enable you to establish a presence in new markets. They give your business access to warehouses and distribution centers in various locations.
Your company can expand to these regions and manage to deliver goods across different places.
The 3PL service will allow you to track inventories without spending on warehousing, additional labor or tools.
7. Increased Transparency
Transparency is one of the concerns you should have when hiring a 3PL provider. You expect them to know that your company is worthy of their trust.
They’ll offer you 3PL technology you can use to track supply chain performance. The technology allows you to monitor your inventory and sales too.
8. Scalability and Flexibility
Third-party logistics providers have the means to scale their services to meet your inventory.
They can offer sufficient resources and space for new product releases or seasonal inventory. Their solutions give you optimal amounts of scalability and flexibility at any time.
When Do You Need a 3PL Provider and How Can You Choose One?
For your business to benefit from 3PL services, you need to seek them early.
Don’t wait until your logistics affects your mission and operations. Your clients may suffer from your failure to fulfill orders in time.
If one of these statements apply to your company, seek 3PL assistance immediately.
• Your workers spend most of their time fulfilling client’s orders
• You’re spending too much on inventory storage
• Your company lacks enough space for storing inventory
• You expect your business to grow steadily
As you choose a 3PL provider, you’ll be delegating your company’s order fulfillment processes. Choosing the wrong provider can cost you money and customers.
Some of the factors to consider are as follows:
1. Great Value for Your Money
Part of your reasons for seeking a 3PL service is to spend less on order fulfillment. Look for a provider with affordable yet convenient solutions.
Expect to get the best value from partnering with the company.
2. State-of-the-Art Technology
The company should have the best technologies in place and be keen on supply chain trends.
Work with a provider with an impressive track record for automating and streamlining processes. With the right technologies, your order fulfillment process can minimize costs and errors.
3. Flexibility and Scalability
Your 3PL provider should have a means to manage both present and future inventories and orders.
As your company grows in size, the provider should offer solutions suited for your growth. Expect a 3PL software program that allows room for growth.
4. Automated Billing Functions
The 3PL technology in place should be capable of automating billing functions.
With such automation, you won’t have unpaid or lost invoices in your system. The technology should help receive, store or ship products with on-time and accurate billings.
Your accounting firm or accountant can use this billing information when auditing your books.
5. 3PL Services Suited for Multiple Clients
Choose a 3PL provider that uses multiple-client 3PL architecture. Such technology helps manage order fulfillment and inventory for multiple customers.
You’ll find it useful if your company has various divisions.
6. Credible Labeling Practices
The provider should observe specific regulatory measures when packaging and labeling products. Your company should define these requirements before seeking the 3PL service.
The 3PL firm, on the other hand, should have the right technology to meet them.
Choose an Experienced Third-Party Logistics Provider
While handling supply chain needs on your own is an option, it can’t save you money. You only get to save money and time once you partner with a 3PL provider.
This guide has answered most questions (including “what is a 3PL?”) you may want to know about 3PLs. Find an experienced 3PL provider to partner with your business today.
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