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The rise of 3PL companies has developed alongside the boom in eCommerce. With 2.14 billion online shoppers worldwide and as we further enter the digital age, future online consumer habits will only increase.
Therefore, eCommerce businesses are under pressure to provide elevated customer service that exceeds expectations to survive in this innovative but highly competitive market. One key area to providing this level of service is the ordering and delivery of a customer's products.
Due to standards set by brands like Amazon and Jon Lewis, consumers expect faster delivery times, with 41% of global shoppers saying they hoped to receive their order within 24 hours. Only 31% are willing to wait 2 to 3 days for a delivery. Brands must ensure they have the resources and expertise to meet these expectations.
Many businesses, therefore, call upon the expertise and resources of a 3PL company to help them streamline operations and logistics. So, what is 3PL, you may be asking? And how can it support my business to improve customer experience?
What is 3PL?
A 3PL or Third-Party Logistics provides a service that supports an eCommerce business in managing its supply chain. When businesses begin to grow, day-to-day operations can become too time-consuming and complicated to handle in-house; therefore, they outsource elements of their warehousing, distribution, and fulfilment services to help them meet demand and customer expectations.
Typically services provided by 3PL companies include:
- Inventory management
- Shipping coordination
- Retail distribution
- Order fulfilment
- Customer service
So rather than managing your warehouse and doing distribution in-house, you store your stock in the warehouse of a 3PL company, with your products being directly shipped from your manufacturers. Then, when a customer places their order, the items are automatically shipped from the 3PL warehouse to their delivery address.
Using 3PL companies allows for a seamless and simple process, ensuring that items are automatically shipped to customers via an integrated IT system when they purchase from your website. In addition, it removes the requirement for in-house distribution, allowing you more time to focus on your business.
To highlight its success and reputation, 85% of Fortune 500 and 95% of Fortune 100 companies use 3PL services in some capacity.
In addition, for many eCommerce businesses, 3PL has provided a lifeline to weather the recent supply chain crisis brought by global issues such as the Covid-19 pandemic and the War in Ukraine. Unfortunately, supply turbulence brought about by natural disasters, political instability, and regulatory challenges is increasingly occurring, with exports reporting significant disruptions occurring every 3.7 years. Continued supply chain issues make the expertise and resources of a 3PL company even more essential.
If you would like a detailed insight into the order fulfilment process, discover our fascinating guide, ‘A Beginner’s Guide to the Order Fulfilment Process’.
How can 3pl Companies Elevate an eCommerce Business?
Using a 3PL company has a wide range of benefits to help you maximise performance and improve customer experience. Supply chains are already complicated, and as your business grows, so does their complexity.
Many successful businesses reach a point where it is a financial and operational advantage to seek support from 3PL companies. So, here are the benefits that using a 3PL company could have for your business.
1. Saves Time and Money
Most business owners understand that fulfilling customer orders can be challenging and time-consuming. The time and money spent on these efforts could be better spent elsewhere in the company.
Using 3PL companies allows you to outsource the practical aspects of the supply chain, instantly saving you an abundance of time that otherwise would be spent packing and shipping orders. This allows you to focus more on improving and growing your business rather than worrying about fulfilling customer orders.
While there are upfront costs when using a 3PL company, the long-term savings will outweigh the initial investment. For example, during your partnership with the provider, you will save money on inventory space, warehouse maintenance, and extra labour, on top of potential cost saving on carrier rates, as these are negotiated on your behalf by the 3PL company.
2. Access to the Latest Technology and a Team of Experts
Outsourcing your logistics to a 3PL provider will place you in the hands of specialists with vast experience and knowledge of order fulfilment, up-to-date knowledge of industry best practices, and the latest developments in logistics and technology. All of which allows for an improved and seamless process and an elevated customer experience.
Furthermore, you will be provided access to the latest technology and software, for example, warehouse picking automation, that will optimise logistic functions on your behalf.
Due to their expertise and technology, 3PL companies will also be updated on fluctuating shipping costs and foresee potential issues that affect logistics and supply chains.
3. Ability to Reach New Markets
One of the main methods for a business to grow is to expand its reach internationally. However, there are significant barriers for an eCommerce business to implement this, from legal regulations differing from country to country to investing in infrastructure abroad.
Many 3PL companies have international capabilities, such as fulfilment centres and warehouses worldwide, and the expertise to navigate and deal with foreign legal systems and regulations, customs clearance, duties, and tax. This allows you to test new markets without legal headaches and substantial operational investment.
4. Increased Flexibility and Scalability
A major advantage of 3PL is that it can offer businesses the scalability and flexibility to use resources based on the current needs of the business. Put simply, it is far easier to navigate low and high seasons with the support of a 3PL, as they have the networks, systems, and processes in place as well as the ability to to be able to scale resources, including labour, transportation, or space, to handle increased periods of demand. This ensures delivery expectations are met, and the customer experience is not negatively affected.
Due to these resources and expertise, they are also less likely to be overwhelmed by disruptions in the supply chain caused by political and natural events, as well as changes and challenges in regulation.
5. Customer Satisfaction
The advantages listed above all come down to one key goal, to improve customer experience. Partnering with a 3PL can elevate the experience in several ways, including:
- Quicker Delivery Times - By having access to essential resources, the latest technology, and in-depth industry knowledge, 3PL’s can shorten transit timeframes, optimise delivery routes, and ensure punctual shipments as well as provide late order cut-off up to 10pm for next-day delivery in some cases. The streamlining of delivery procedures can lead to improved customer experience and expectations.
- Increased Order Accuracy - 3PL’s are able to utilise the latest advanced technologies and processes to prevent common errors such as missing items or sending the wrong order, which can lead to customer complaints.
- Improved Inventory Management - They can also support improving your business’s inventory management by providing real-time monitoring of your current inventory levels and automated replenishment processes. This allows for continual product availability to meet consumer demands and decreases the chances of stock delays and deficiencies.
- Elevated Customer Service - 3PL companies can also support your business with your customer service responsibilities, including complaint handling, inquiries, and returns. This can improve customer relations and satisfaction levels and increase the likelihood of repeat business and customer loyalty.
Looking for an Expert 3PL Provider for your Business?
At Core Fulfilment, our mission is simple, to serve your customers better. We are committed to providing a simple and seamless order fulfilment service that ensures that you can improve customer experience while allowing you to spend time growing your business. To discover more about our order fulfilment process, explore our dedicated page.
So, if you are considering outsourcing or switching your order fulfilment for your business, we’d love to hear from you and become part of our journey. You can either contact the team for a chat or visit our HQ in Crewe and see how we work in person.