Benefits of 3PL – How a 3PL Saves Money & Time

A 3PL (Third-party logistics) can significantly enhance your e-commerce, dropshipping, or retail business by providing end-to-end logistics solutions, WMS, cost-cutting through better deals, valuable insights, and customer support services. Let’s understand the benefits of 3PL Warehousing in detail.

What is a 3PL & what services do they provide?

Let us begin with a brief introduction to 3PL and its operations. As evident from the name, 3PL is a third-party service provider. 

Being an e-commerce, or dropshipping business entrepreneur, you are already aware of how much time is consumed in inbound/outbound logistics, warehouse management, sorting of orders, picking & packing, handling of returns and customer queries! 

In fact, after handling all these operations, no time & energy is left for the core business activities. Here, a 3PL comes as your saviour to take away all your worries by providing end-to-end logistics solutions, storage solutions, handling complete fulfilment processes up to delivery, and from customer queries to sales returns.

Thus, you become a free person to focus on bringing new sales, making business strategies, brand building, launching new schemes, etc. For more details on the 3PL operations, you can check out our article for beginners What is a 3PL?

Benefits of partnering with a 3PL

Ecommerce fulfillment service has revolutionized the way online businesses operate. By taking over the logistics of storing, packing, and shipping, it provides seamless operations, allowing businesses to focus solely on their core competencies and products

Now, we will focus on the actual benefits that you can reap while partnering with a 3PL. These benefits start from saving heavy initial expenditure, saving through streamlining the entire supply chain, integration with WMS, better deals, business expansion, and lots more. Now, we will discuss all aspects in detail:

  1. Saves heavy infrastructure expenditure.

A 3PL facility saves e-commerce companies from making a heavy expenditure in purchasing a warehouse and the latest technological equipment or hiring a complete warehouse for the stock at a hefty monthly rent. Further, the 3PL frees the companies from the administrative and labour headaches of running & maintaining that warehouse.

Apart from this, e-commerce companies can easily scale up or down their activities with seasonal or occasional demands. For these fluctuating demands, hiring new warehousing space or new staff to handle those demands is no more required. The 3PL will bear all the fluctuations of warehousing, logistics, and manpower requirements. 

Similarly, retail companies can successfully run the store with less space, as the retail stores are usually at costly prime locations and save cost by storing the excess stock at a 3PL. Here also, the 3PL will take the brunt of all the inconsistent demands.

  1. Increases business efficiency.

A 3PL can easily find the flaws in the supply chain of e-commerce companies and streamline the operations with wide experience and time-tested systems. Apart from this, being updated with industry best practices, 3PLs can provide tailored solutions to improve efficiency. 

3PL can do warehouse management, fulfilment, and logistics processes more professionally, quickly, and efficiently with their expertise and trained staff. 3PLs are bulk operators, hence having economies of scale and thus saving costs for your business. Further, by investing in the latest technologically advanced equipment, 3PLs always have an edge with those tools and data analytics. 

As a result, the e-commerce or retail company gets relieved of these responsibilities and can easily focus on sales, advertisement, and marketing. 

  1. Inventory Automation and Real-Time Tracking

3PLs use technologically advanced cloud-based warehouse management software (WMS) which allows real-time inventory tracking and streamlines the order management process. 

WMS is connected online with the e-commerce company’s sales portals like Amazon, Shopify, Bigcommerce, etc. With every new addition to the stocks at 3PL or order fulfilment, the WMS updates the stock position at the e-commerce portal in real time.

Hence, the e-commerce company can track its inventory and order fulfilment more efficiently, even when the goods are stored in multiple warehouses at different locations.

With Real-time inventory tracking, e-commerce companies can check their inventory levels in real-time, to keep control over stock level maintenance and overselling. Further, it reduces theft, spoilage, and other such losses.

In addition to this, WMS optimises order processing and fulfilment and thus speeds up delivery times.

  1. Cost and time-saving

Usually, businesses are not aware that 3PLs can offer far better rates with bulk deals and discounts and hence can always save costs for the companies. An e-commerce operator can never get such logistics rates directly.

In addition to this, a 3PL can optimise transportation routes, and minimise storage costs by utilising its network of warehouses. With warehouses in different cities and locations, a 3PL can make deliveries from the nearest warehouse. Thus, cutting delivery costs as well as time. Hence, e-commerce and dropshippers can also offer amazing rates & quick delivery to online buyers. 

Further, customer services and product returns require a lot of time and regular attention. 3PL takes care of all these responsibilities very smoothly with trained professionals. Some 3PLs even offer the services of ultimately returning the goods to the company for exchange or an eco-friendly disposal.

  1. International shipping and customs laws

3PLs with their expertise, can give insight into international shipping issues like documentation, customs, duties, and differing shipping regulations. Thus relieving the e-commerce companies from understanding and complying with the international shipping protocols.

Further, leading 3PL providers have strong global networks and can provide access to these resources at competitive costs. Thus, allowing the e-commerce operators to economically import, and export goods from other countries around the world seamlessly. 

  1. Industry forecasting and business growth

3PLs with their wide experience and advanced data analysis tools often provide industry forecasts, and thus help e-commerce companies to optimise inventory levels to save on inventory holding costs. 

Apart from this, when expanding into new markets, 3PLs can provide help in expanding the customer base. For expanding into other states within the country, e-commerce companies can use 3PL’s warehousing & fulfilment facility in those states as well, thus utilising a fully customised supply chain without any expenditure. Further, to tap the global markets, big 3PLs resources can be used as discussed above.

  1. Customer satisfaction

A happy customer is the best promotion. 3PLs provide customer support services, including tracking and tracing shipments, handling customer inquiries, and resolving related issues and return matters as per the company’s policy promptly. Thus, a satisfied customer experience leads to more & more sales.

Conclusion

Being a comprehensive one-stop solution to all the e-commerce woes a 3PL immensely benefits online operators and retail companies. These companies can maintain end-to-end control over the stock and orders without indulging in day-to-day activities. Thus, saving a lot of money as well as time to focus on the core business activities which sharply boosts their profitability.

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