3pl fulfillment or third-party logistics fulfillment is the process by which orders are picked, packed and transported to customers. Other names for 3pl fulfillment include sales logistics, 3pl, and warehouse logistics.
What types of eCommerce 3pl businesses should use for fulfillment?
Here are a few signs you are ready to begin outsourcing your logistics services.
1. You are sending greater than 100 orders each month
If you are at this level, you are likely struggling to keep up with demand as it is. Once you have hit this number, you are most certainly ready to utilise the services of a dedicated 3pl fulfillment provider. Otherwise, you are spending far too much time packaging, labelling and sorting through stock. That time could be better spent on more critical areas of the business.
2. Running out of space to store stock
As your order volumes increase, so does the pressure in keeping and managing stock. If you have resorted to using more than just your spare room at home or your garage for warehousing then, inventory is likely out of control. Reduce the hassle and strain on your loved ones, family or friends. Reclaim the space for personal use only and make the decision to outsource and scale properly.
3. Shipping costs are spiralling out of control
If you are finding that your margins are getting squeezed tighter and tighter, it makes sense to consider outsourcing your operations to a 3pl provider. Once you partner with a 3pl fulfillment provider, you should find that your costs can be significantly reduced. You can also monitor them on a regular basis to ensure continued profitability.
4. You are getting distracted from your business
Another sure sign that you are ready to outsource your logistics is when you are getting bogged down by customer orders that could easily be automated or are low margin transactions. Your time is by far the most precious commodity so by tapping a 3pl fulfillment company, you can reclaim your personal time and spend it on more important tasks.
Once you have decided that you are ready for 3pl fulfillment you need to choose a supplier. You should select this partner carefully as you want to find a company that can really understand your logistics needs. Once you have chosen the right partner and have engaged their services, you will be able to use their resources and integrate your system with theirs so you can share data.
The key stages of the fulfillment process are:
Once your stock or products have been received at a third party warehouse, they are scanned, shifted to a shelf, rack, or pallet, and then catalogued in warehouse management software. This is a critical part of warehousing operations as it enables you to see how many items you have on hand at any time so they you can effectively manage your stock levels and re-order more units from the manufacturer in alignment with customer demand. The units are typically barcoded and assigned an SKU or Stock Keeping Unit which helps you keep track of inventory through both the inbound and outbound logistics cycles. 3pl providers will generally have their own process around receiving and storing inventory.
Now that you have stock waiting in the warehouse, you can accept customer orders. By this stage, the 3pl fulfillment company should have already worked with you or your developer to integrate their system with your own. As soon as the customer order is placed, the product can be picked from the shelf. Standard packaging materials such as brown boxes, white poly bags, packing tape and dunnage are then used to pack your item safely and securely. The item is then rescanned and labelled with the customer’s name and address. Professional 3pl fulfillment companies will strive to pack your goods with the most cost-effective materials that will achieve the lowest dimensional weight while still protecting your products.
The next step in the supply chain is for 3pl providers to arrange the goods to be shipped to the customer via carriers such as Australia Post, Startrack, Fastway, DHL and others. This step is also tracked and viewable through the 3pl software and should be accessible to you via a real-time data dashboard. Gaining access to this data can prove very powerful as you are able to carefully analyse stock levels, costs and timeframes that can help you improve other efficiencies over time.
3pl fulfillment might sound simple on the surface, however, it brings with it a tremendous array of opportunities to boost your supply chain efficiency and drive down costs. There can also be places in the distribution logistics process where additional value can be added to each order. For instance, sometimes businesses will arrange for a discount flyer, glossy brochure or offer coupon to be included within the packaging. This can result in upsells, cross-sells and enhanced brand loyalty. By making customers feel valued, you can also increase your repeat business and improve customer retention.
If you are looking for 3pl fulfillment services, then give Invenco a call today. We are your 3pl fulfillment specialists and would like to work with you.