How 3PLs set retailers up for success

Great in-house order fulfillment isn’t easy.

Brands struggle with high warehousing and transportation costs and complex supply chains.

It is very difficult to scale in-house fulfillment. ??

That’s why?57% of eCommerce companies are outsourcing some or all of their fulfillment processes – up from just 29% in 2020.

For many growing brands, it’s more important than ever to reassess their fulfillment processes and determine the benefits of a trusted third-party logistics (3PL) provider to streamline operations and balance costs.

And?meet customers’ high expectations, most of all. ?

What is a 3PL??

“3PL” stands for Third-Party Logistics and refers to the outsourcing of logistics and supply chain management functions to specialized companies that are separate from the businesses they serve.??

3PL providers partner with retailers and provide a wide range of services that can include transportation, warehousing, inventory management, order fulfillment, packaging, freight forwarding, and customs brokerage, among others. By leveraging the expertise and resources of 3PL providers, businesses can focus on their core competencies while benefiting from the specialized knowledge, infrastructure, and technology offered by these external logistics partners.?

The benefits of a third-party logistics provider?

Outsourced eCommerce fulfillment allows brands to focus on developing products and scaling core competencies, while their logistics partners manage warehousing and distribution, order processing, inventory management, and shipping.??

Here are some of the benefits created by partnering with 3PLs:??

• Streamlined Operations and Cost Savings:?Retailers and brands can streamline operations and achieve significant cost savings by partnering with a 3PL. 3PLs provide expertise, infrastructure, and efficient operations designed to reduce overall transportation, warehousing, inventory, and shipping costs. Organizations can tap into economies of scale through established logistics networks, as well as access cutting-edge technologies.? ?

• Flexibility and Scalability:?Businesses’ logistics needs will change as they grow and evolve. 3PLs are equipped to handle demand fluctuations, seasonal spikes, and sudden supply chain disruptions. They can scale to meet business needs, market dynamics, and customer expectations.? ?

• Supply Chain Visibility and Analytics:?3PLs provide visibility and key insights into supply chains with advanced tracking systems, real-time data analytics, and robust reporting capabilities. And many leading 3PLs integrate new technologies like machine learning and GenAI to further support their retail partners. Supply chain transparency means better decision-making and continuous improvement.? ?

• Risk Mitigation and Expertise:?Global?supply chains are complex and prone to constant disruption. 3PLs mitigate risks and ensure compliance with relevant regulations. Their extensive industry knowledge and risk management protocols mean more resilient supply chains.?

The Pick-to-Light system guides Radial’s personnel through the picking process quickly and easily, boosting the quality of order fulfillment.

What to look for in a 3PL

When selecting a 3PL, retailers should consider the following:

• Industry experience: Assess the 3PL’s expertise and experience in your?specific industry?or niche. An experienced 3PL will understand your industry’s challenges and offer tailored solutions. ?

• Customer base:?Research the 3PL’s reputation by requesting customer references or case studies. Look for feedback on their reliability and responsiveness.? ?

• Services offered:?Evaluate the range of services offered. Consider whether they offer the specific logistics functions you require, like transportation, warehousing, inventory management, fulfillment, or?value-added services. ? ?

• Network coverage: Consider the 3PL’s geographic reach and network. Ensure their warehouse locations, transportation routes, and distribution capabilities align with your needs. ? ?

• Technology:?Determine what technology and automation are available. Look for advanced logistics software, warehouse management systems,?real-time inventory visibility,?and?reporting capabilities. Robust technology solutions improve supply chain visibility and provide critical data for decision-making.? ?

• Scalability:?Assess the 3PL’s ability to scale operations up or down depending on demand. Determine whether they have the resources and infrastructure necessary to handle order volumes,?maintain quality during seasonal peaks, and scale for future growth.? ?

• Pricing model:?Understand the 3PL’s fee structure, including any additional charges for peak seasons or value-added services. Ensure pricing is transparent to avoid hidden costs. ?

• Communication:?Ensure the 3PL offers clear communication and regular updates, along with dedicated customer support.? ?

• Compliance and security:?Verify that the 3PL adheres to regulatory requirements, such as customs and security protocols. Check for certifications and licenses to ensure the safety of your products.

A 3PL should create a partnership mindset. Partnership means mutual support and an investment in each other’s successes. A partnership mindset means the 3PL will seek to add value above and beyond SLAs to help retailers grow sales and improve customer experience for the long term.?