17 May 6 E-Commerce Business Aspects to Outsource to a 3PL Partner
Customer satisfaction is a top priority for every business, from e-commerce that is just getting off the ground to large ones. And nothing makes a client happier than getting their favorite items in a timely and efficient manner.
The cornerstone of any business operation is getting products into the customers’ hands quickly and cost-effectively. However, as your e-commerce business grows, controlling the supply chain gets more complicated and costly.
Logistical errors can degrade the client experience, stifle your company’s growth, and reduce the revenue generated. As a result, E-commerce businesses typically outsource their order fulfillment and logistic operations to third-party logistics, also known as a 3PL, to alleviate many of these concerns.
If you can’t fill orders in-house, turn to a 3PL partner to outsource and expand your fulfillment strategies.
What Is Third-Party Logistics (3PL)?
Third-party logistics is outsourcing logistics and other supply chain operations to get a company’s products to their customers. Outsourcing your business’s operational logistics enables you to focus on other important areas, mainly growing your business.
A 3PL partner provides several essential services to manage your whole supply chain. They include:
- Offers in-depth reporting in real-time
- Forecasting your inventory needs
- Reverse fulfillment
- Packing and picking shipments for clients
- Storing your inventories in a warehouse
Let’s look at them in detail.
1. Offers In-Depth Reporting In Real-Time
Any ecommerce company needs to record, organize, and display crucial data points and other valuable metrics. Naturally, this has made reporting more sophisticated. However, 3PL companies are dedicated to providing you with complete transparency through extensive real-time reporting and operations analysis.
3PL companies are invested in technology and modernization to use real-time reporting systems. These companies use dashboards to capture, organize, and present real-time data through simple interfaces like graphs, filters, and other infographics.
Using a logistics provider with this type of technology will give your e-commerce business a significant competitive advantage because you can observe and comprehend what’s going on in your operations and make informed decisions.
2. Forecasting Your Inventory Needs
Inventory management is an important part of the e-commerce fulfillment process and your overall supply chain. It entails a lot more than just having a warehouse. Your products need to be ready to ship when a client places an order.
Ideally, a logistics service has inventory management software that connects your online store to the warehouses where your products are stocked. This provides your firm with a real-time inventory level at each storage site, allowing you to plan ahead of time and avoid stock-outs.
A 3PL will also collaborate with your company’s freight forwarder to obtain advanced shipment notifications (ASNs) from the manufacturer for inbound inventory. Again, this is helpful for planning because it keeps track of the inventory you have on hand and products that need to be restocked.
3. Reverse Fulfillment
Any e-commerce fulfillment business requires reverse logistics, often known as returns management. It encompasses getting products from the end customer to your warehouses or distribution points. Returns resulting from inaccuracy, damage, or buyer’s remorse must be disposed of or reintegrated.
With 3PL fulfillment services, you can be confident in end-to-end fulfillment management. They handle every aspect of transporting, storage, and return order processing. As goods are brought back to your fulfillment center, 3PL partners oversee various planning, control, and implementation levels.
4. Packing And Picking Shipments For Clients
Order fulfillment includes operations such as picking, packing, and shipping. The fulfillment process for your ecommerce begins as soon as your client clicks the “Order” button.
Once your order is conveyed to your logistics company, it is delegated to the 3PL’s warehouse picking crew. The pickers receive a picking list of goods and quantities in the warehouse. The pickers then pick up your clients’ ordered items and securely pack them for shipping to the client.
Most 3PL firms have fully automated systems that seamlessly interfaces with your e-commerce platform or handles multi-channel sales across several platforms.
5. Storing Your Inventories In A Warehouse
Once inventory is received at your logistics company’s warehouse space, your logistics partner will hold the products at their fulfillment centers. The 3PL ensures that each item has its own dedicated storage space. These are often organized by SKU number to decrease labor expenses during the picking and packing process.
Most 3PLs have integrated warehouse management software. The system detects where a product is stored and when to make it easier to fulfill. It also determines what to do once an order is received.
You’ll need to engage with a 3PL partner with enough storage space to handle your current inventory. In addition, your 3PL storage requirements will expand in line with your e-commerce operation.
Transportation is one of the few operations in your supply chain that significantly impacts your business. It ensures that fulfilling orders from your facilities goes off without a hitch and arrive on time. This is vital to a solid customer experience.
Because transportation is critical to your company’s performance, it’s critical to include 3PL companies specializing in transportation services. These companies will handle inventory shipments between manufacturers and your warehouse and between your company and your customers.
Top 3PL providers have already invested in or created their own Transportation Management System (TMS) to support logistical operations. This allows your e-commerce business to use logistical technology that is expensive to buy on your own.
Though outsourcing through a 3PL partner may appear costly, complex, and time-consuming, it’s often worth it. Selecting the correct potential partner can help your e-commerce business expand. Choose third-party logistics companies whose connections have matured.
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