What is a 3PL?
Streamlined operational logistics for merchants
What is a 3PL?
A third-party logistics (3PL) provider is a business to which companies outsource their operational logistics and supply chain management.
3PL providers streamlined operational logistics for e-commerce merchants by overseeing, managing, and optimising their supply chain.
A 3PL provider owns all the warehousing and equipment needed to store the merchant’s products and efficiently pick, pack, and ship them to customers.
What does a 3PL do?
Benefits of hiring a 3PL
Reduce
costs
The cost of warehousing, staff, and equipment needed for in-house order fulfilment is already expensive and will only become increasingly so as your business expands. Outsourcing these spaces and responsibilities by working with a 3PL can greatly save on costs.
Save
time
As your business grows, fulfilling orders in-house may become impractical. Outsourcing to a 3PL allows your company to focus on the big picture aspects of your business, instead of getting caught up in the demands of supply chain management and order fulfilment.
Better customer experience
3PL providers are experts in logistics and specialise in making order fulfilment as efficient as possible. This means faster shipping and satisfied customers.
Scales to your needs
As demand rises or falls, working with a 3PL allows you to optimise your fulfilment requirements, so you only pay for as much as you need at any given time.
Considerations when hiring a 3PL
Control over shipping
With an external agency handling shipping, challenges may arise if delays or other issues occur when fulfilling a customer’s order. Customers will hold your company – not your 3PL – responsible for potential delays. Handling those situations will fall to you. It is therefore important to choose a 3PL company that you can rely on and who is pro-active solving problems.
Distance from your products
If you choose a 3PL provider with warehouses far from your business, this may present challenges in the event of quality control problems, or if you ever need to inspect your stock. You may therefore choose to deal with a company that provides personalised service and takes pride in quality control.
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Who should hire a 3PL?
Companies should consider hiring a 3PL when in-house order fulfillment becomes too time consuming and impacts the growth of your business.
The time and capital investment required to meet increasing demand will put greater focus on order fulfilment and detract from the running of your business. Outsourcing operational tasks affords you time to obtain new customers, invest in marketing campaigns, or expand your product line.
