eCommerce 3PL logistics solutions are vital to the success of any eCommerce business. The eCommerce industry has come a long way in the past decade.
Global eCommerce is projected to grow from $1.86 trillion in 2017 to over $4 trillion by 2021, and with this growth comes many new logistics challenges.
eCommerce 3PL solutions are for companies of all sizes who need warehousing and distribution services that can keep up with demand.
What are 3PLs?
A third-party logistics provider, or eCommerce Third Party Logistics Provider (TPPL), is a company that offers services to other companies, including warehousing and distribution.
The goal of these providers is to offer more than just standard warehouse management. They also assist clients that need help with transportation coordination, fulfilment operations, packaging design, and assembly.
It can be difficult for smaller eCommerce businesses to afford the space necessary for storage without significant investment in equipment like racks or shelving, so it’s not uncommon for them to use eCommerce TPPLs instead.
For larger eCommerce retailers, this may seem unnecessary because they have the means and resources. But as their business grows exponentially, some end up spending money in order to set up new warehouses.
eCommerce TPPLs can be a great way to stay on top of demand and avoid hiring the wrong number of employees.
How 3PLs work
eCommerce 3PL companies work by fulfilling eCommerce orders for clients. They accept the order and then fulfil it in whatever way they see fit: picking, packing, or shipping.
Some eCommerce 3PL providers opt to use merchandise management software such as WMS that helps them plan out their warehouse space better than traditional methods.
They may also offer services such as packaging design and assembly, so that retailers don’t have to worry about hiring an outside company that might not be updated on the latest innovations in ecommerce 3PL technology—a difficult task when there are new developments every day.
How can 3PL help my e-commerce business?
Third-party logistics services providers are an eCommerce business’s best friend. Here are some ways they can help your business:
Benefits of eCommerce 3PL
Partnering with a reputable and capable third party logistics provider is the best way for an entrepreneur to ensure a smoother supply chain. These firms offer immense benefits. Partnering with a third-party logistics company provides the following benefits:
1. Lower rates on high-quality services
eCommerce 3PL can often offer better rates on e-commerce freight transportation and warehousing because of their economies of scale, enabling them to negotiate favourable volume deals with carriers.
2. Access to an eCommerce specialist
Third party logistics companies are experts at providing solutions for eCommerce businesses, so they will have a deep understanding of your needs as you grow.
3. More available warehouse space
Warehouses need to be flexible enough to meet additional requirements as demand grows. Partnering with a third-party logistics company allows entrepreneurs more options for finding and leasing warehouses that fit their specific needs than if they were doing this alone.
4. Easier eCommerce shipping services deployment
When eCommerce retailers partner with third party logistics companies, they have the opportunity to outsource their shipping services.
eCommerce retailers who want to develop a more hands-off approach may find this advantageous. It will allow them to focus on running their core business and not spend so much time focusing on how orders are delivered.
5. Scaling operations
eCommerce retailers often need to scale operations depending on the size of their business. eCommerce warehouses should be able to expand as needed without a significant investment in building, leasing, or buying extra space.
What you should look for when choosing an eCommerce 3PL for your company?
Choosing a third-party logistics provider can be a daunting process. However, it doesn’t have to be this way. By studying a few key factors, you can be on your way to selecting a logistics service provider that will meet your company’s needs. These include:
eCommerce logistics companies must offer solutions that can grow with your company. eCommerce growth can happen quickly, and without warning, so you’ll want to have a provider on standby who will be able to handle the sudden influx of orders.
eCommerce companies need warehousing services nearby—preferably within 50 miles or less. This ensures timely deliveries for both standard ground shipments and expedited air freight options.
3. Proven track record
eCommerce logistics providers must provide a track record of success. eCommerce 3PL order fulfilment is an art form, and only the most skilled companies will be able to handle your company’s needs.
4. High-level industry references
eCommerce logistics providers should have a solid list of references. eCommerce 3PL is an ever-changing industry, so you’ll want to know how the provider has been successful in helping other companies grow.
When it comes to eCommerce fulfillment, timeliness is king. The key metric for success with eCommerce fulfilment is how quickly your customers receive their orders.
Finally, you’ll want to consider price points for eCommerce distribution services. Vigorous growth can lead to significant increases in shipping costs, so having more than one provider under contract may help with future cost projections.
Invenco is a global eCommerce logistics provider for eCommerce clients. We partner with eCommerce companies looking to grow their business and deliver the best customer experience.
Our fully-managed integrations and eCommerce 3PL logistics solutions are designed to scale with your business and deliver the best customer experience. Contact Invenco today so we can show you how we can help you succeed in the highly competitive eCommerce industry.