Third-party logistics (3PL) is a fulfillment service model in which an external company hired by your business manages the entire logistics and shipping process, as well as your supply chain.
Tasks covered by a 3PL provider include product procurement, warehousing, inventory and order management, freight forwarding, product shipping, receiving, distribution, customs, cross-docking, picking and packaging.
3PL services are especially popular among growing startups with a small product portfolio that they sell directly to consumers. These companies often face high order volumes but do not yet have the infrastructure to handle fulfillment in-house.
Outsourcing fulfillment to a 3PL provider has many advantages, especially if your ecommerce site lacks the resources to efficiently store, prepare, and ship inventory. If order volumes exceed your capacity, a 3PL service allows you to free up time and resources, allowing your team to focus on key areas of the business.
Other benefits include the ability to leverage the supplier’s expertise in supply chain management, reduced operational costs by not having to manage warehousing and shipping, and streamlined shipping and returns processes. Plus, this model is ideal for scaling quickly.
However, there are also downsides. By working with a 3PL service, canada whatsapp numbers you lose some control over the shipping and returns processes, which means you'll be subject to the supplier's timelines and standards. A bad experience with turnaround times or handling can affect the perception of your brand.
Final thoughts
As you evaluate the size, scope, and needs of your ecommerce business, there are several important questions you should ask yourself before deciding on a specific fulfillment strategy.
What type of products will you be shipping? Are they bulky and heavy or more compact and economical to transport?
Do you have the physical space necessary to store materials and orders before shipping?
Do you have the ability to handle customer queries about order status and returns?
Does your budget allow for possible errors in the fulfillment process?
What impact does inventory loss, whether due to damage, theft or other causes, have on the profitability of your business?
Do you offer shipping discounts for your customers?
Do you include international shipping in your options?
Do you have a tracking system that customers can use to track shipments?
How long does it take you, on average, to process and ship orders? How quickly can you deliver?
Remember: Your customers want fulfillment to be like magic. Choose a strategy that allows you to offer them that seamless, hassle-free experience.