The complexity of the supply chain has increased dramatically in the last few years. With the rapid growth of online shopping and e-commerce, retailers struggle to keep up with this increase in order volume, especially when it comes to shipping, managing inventory, and customer service. In addition to these challenges, e-commerce business owners are also looking for ways to reduce costs and maintain competitive pricing on their products.
The best 3PL logistics company can help address all of these issues by providing a wide range of services that benefit all aspects of your supply chain.
Plus, a lot of that savings come from using a third-party logistics company. It’s a new way to get products to market, and it’s changing how retail is done across the globe. So, if you’re an e-commerce seller, it’s time to take note of this emerging trend and start preparing your business for the future.
Increased Supply Chain Visibility
Access to data at every step of the supply chain is critical for e-commerce businesses, but it’s not always easy. For example, your customer service team may be able to see where an order is in its journey through your warehouse, but they can’t tell what’s going on with that same product as it moves through delivery.
And while there are plenty of third-party solutions that aim to improve visibility into logistics operations and help you make better decisions about inventory management and other areas, many of these solutions are expensive—or they don’t work seamlessly with other systems in place at your company.
With 3PL logistics solutions, you’ll gain access to real-time information about every component in your supply chain: customer orders; products being shipped; products waiting for shipment; packing materials; inventory locations; delivery trucks and drivers; shipments awaiting pickup by customers (or customers who have already received their orders).
You’ll also be able to monitor performance against metrics such as shipping timelines or error rates across all aspects of order fulfillment—and identify opportunities for improvement wherever possible.
Expertise
When you’re looking to execute a complex logistics operation, it helps to have the right people on your team. Employing a 3PL company is one of the innovative methods to address new challenges as it has all the necessary skills and experience needed for success.
- Expertise: They have years of experience providing third-party logistics services for e-commerce businesses. Many reputed 3PL Logistics companies have successfully delivered hundreds of thousands of orders across all major carriers and modes of transportation.
- Skills: They have an experienced staff who are experts at handling different types of goods and services, including fragile goods such as electronics, pharmaceuticals, or medical equipment.
- Equipment: They own fleets of specialized vehicles equipped with state-of-the-art technology so that they can smoothly deliver your goods quickly and safely every time they need to be shipped out (or returned).
- Training: Because they have been in business so long, their employees know how much effort goes into every single delivery—and how important it is for them to do their jobs properly, so everything runs smoothly from start to finish.
Reduced Shrinkage and Losses
As an e-commerce business, you’ll likely be shipping a lot of packages. This can lead to some unfortunate incidents: theft and damage are both common with the increased volume of deliveries.
But by using a third-party logistics service to handle your shipments, you can reduce these issues drastically.
The third party will keep track of all shipments through a database and ensure that they’re delivered correctly every time. They’ll also have security measures in place at their warehouses and offices as well as during transportation to keep products safe from thieves or damage during transit—so even if something goes missing along the way, there’s still a good chance they’ll get back what was taken before it leaves their care (and sometimes even before it leaves your warehouse).
Cost Savings
Cost savings is the most obvious advantage of using 3PL (third-party logistics) for your e-commerce business. If you rely on a 3PL provider to handle all aspects of shipping, receiving, and distribution, then there’s no need to hire your own staff or invest in expensive software.
This can save you a lot of money over time, as it’s unlikely that any one person or company will be able to match the same level of service and expertise as an established logistics provider with decades’ worth of experience.
Third-party logistics providers offer many other cost-saving benefits, such as reducing inventory costs through consolidation, reducing shipping costs by using parcel forwarding services, and helping you target markets outside your geographical area with cross-border fulfillment operations.
Some of the other benefits of 3PL are:
- Time-saving: With 3PL logistics in the picture, you no longer have to worry about managing your own warehouse and inventory. This saves you time.
- Energy-saving: With 3PL logistics in place, your warehouses won’t be cluttered with inventory anymore. This will save both space and energy consumption.
- Stress-free: By outsourcing certain aspects of operations like warehousing & transportation management, all headaches related to these areas are taken care of by someone else who does it professionally.
Conclusion
These are just a few of the ways we think that 3PL providers will affect the e-commerce business. More generally, we see an industry that’s transitioning from a model of providing static 3PL services to one in which they can help with every step of the fulfillment process—from supplier to consumer.
The benefits of outsourcing your company’s logistics to a 3PL are many, from lower costs and better service to more flexibility and improved efficiency. These benefits become especially apparent when they’re viewed alongside the downsides of having an in-house logistics department, including expensive equipment rentals or leased space that could be used for other purposes.
If you’re starting a new business or expanding one into e-commerce territory, consider hiring an experienced 3PL provider so that they can help get your products into customers’ hands as soon as possible—and without breaking their bank accounts either.