How To Select a Service Provider for 3PL eCommerce Fulfillment

If you're like most business owners, you're always looking for ways to improve your bottom line. One way to do this is by outsourcing some of your operations to a third-party logistics (3PL) provider. The right 3PL can save you time and money by handling tasks such as warehousing, shipping, and customer service.

When it comes to 3PL providers for eCommerce fulfillment, there are a lot of options to choose from. But how do you know if 3PL is right for you? And once you've decided to use 3PL, how do you choose the right provider?

In this article, we'll answer these questions and more. We'll give you an overview of 3PL services and explain how to select a 3PL that's a good fit for your business.

What Are Fulfillment Services?

Fulfillment services are logistics supply chain services that handle the storage, packing, and shipping of products on behalf of an eCommerce business. They are often used by businesses that sell physical goods online, such as apparel, home goods, and beauty products. Normally, fulfillment services are used for inventory monitoring, pack and ship orders, and customer service for returns and exchanges.

A fulfillment service aims to ensure orders are fulfilled accurately and efficiently so that customers are happy and businesses can run smoothly. They can be very helpful for businesses that are growing rapidly and need assistance with order fulfillment but are not yet ready to invest in their own warehouse space and staff.

Fulfillment services can also be a good option for businesses with seasonal spikes in demand or that sell products difficult to store and ship, such as large or delicate items.

What Are the Different Types of Fulfillment Services?

There are many different types of fulfillment service options, which can make it challenging to know which is right for your business. Below we cover the three main types of fulfillment services:

In-House Fulfillment

This is when a business handles all of its fulfillment, using its staff and warehouse space. This can be a good option for businesses with a small product catalog and a stable sales volume. The downside of in-house fulfillment is that it can be expensive and time-consuming, especially as your business grows.

Scaling an in-house operation can be difficult, so it's important to make sure you have the space and resources to do it before committing to this option.

Dropshipping

Dropshipping is a fulfillment service where products are shipped directly from the manufacturer to the customer. It is common for companies that use drop shipping to have their inventory stored at the manufacturer's warehouse. As orders come in, the company will contact the manufacturer, who will pack and ship the products to the customer.

Dropshipping can be a good option for businesses that are just starting and don't have the capital to invest in inventory. It also eliminates the need for a physical warehouse.

Third-Party Logistics (3PL)

A business can outsource all or part of its fulfillment operation to a third-party logistics provider. This can be a good option for businesses of all sizes, as it allows them to scale their fulfillment operations quickly and efficiently.

The Benefits of Using a 3PL Provider

3PL fulfillment companies offer a variety of supply chain services, including storage, packing, shipping, returns processing, and customer service. 3PL providers usually have their storage and staff, which allows them to offer a high level of service.

The growth of eCommerce has led to an increase in the number of 3PL providers as businesses look to outsource their fulfillment operations. During the pandemic, there was a surge in demand for 3PL services as businesses scrambled to keep up with online orders.

The advantages of using a 3PL provider include:

Cost Savings

The main advantage of using 3PL fulfillment companies is that it allows businesses to outsource their fulfillment operation to a company that specializes in logistics. This can save businesses time and money, as they do not have to invest in warehouse space or staff.

3PL providers can also offer a higher level of service than businesses could provide on their own. The economies of scale that 3PL providers enjoy allow them to pass on savings to their customers through lower prices.

Flexibility

3PL providers offer various services, allowing businesses to choose the services they need. 3PL providers can also scale their services to meet the changing needs of businesses. As businesses grow, they can add more services, such as returns processing and customer service.

Efficiency

3PL providers specialize in logistics, which allows them to fulfill orders more quickly and efficiently than businesses could on their own. The use of 3PL services can help businesses to improve their customer service.

Customer Service

3PL providers usually have staff dedicated to customer service, which allows them to provide a high level of service. This can be a valuable asset for businesses, as it can help improve customer satisfaction.

Peace of Mind

When businesses outsource their fulfillment operation to a 3PL provider, they can focus on their core business and leave the fulfillment to the experts. Having a fulfillment partner can give businesses the peace of mind that their orders will be fulfilled accurately and on time.

Scalability

3PL providers can scale their services to meet the changing needs of businesses. This allows businesses to grow operations without investing in warehouse space or staff. 3PL services can be a valuable asset for businesses looking to scale quickly.

Access to Technology

3PL providers usually have the latest technology, which allows them to fulfill orders more quickly and efficiently. 3PL services can give businesses access to the latest technology and help them improve their fulfillment operation.

Global Reach

3PL providers usually have a global network of warehouses and operations, which allows them to fulfill orders anywhere in the world.

Increased Sales

Using 3PL services can help businesses increase their sales by allowing them to reach a larger customer base. As 3PL providers usually have a global network of warehouses and teams, they can help businesses expand their operations into new markets.

Improved Customer Satisfaction

3PL services can help businesses improve customer satisfaction by providing a higher level of service. Using 3PL services can also help businesses improve their customer retention rates.

How To Find a Fulfillment Center

Finding a fulfillment center can be divided into three main steps: research, evaluation, and selection.

Research

The first step in finding a fulfillment center is to research your options. There are a variety of fulfillment centers available, so it is important to find the one that best meets your needs. You can research logistics service providers online or by talking to other businesses in your industry.

The best way to find a fulfillment center is to ask for recommendations from other businesses in your industry.

Evaluation

The second step in finding a fulfillment center is to evaluate your options. You should consider each fulfillment center's cost, location, services, and reputation. It is important to compare the different options and choose the fulfillment center that is right for you.

Once you have a list of potential fulfillment centers, you should review their websites and contact them to learn more about their services.

Selection

The third step in finding a fulfillment center is to select the one that best meets your needs. Once you have chosen a fulfillment center, you should contact them to learn more about their services and discuss your specific needs.

Things To Consider When Looking for a Fulfillment Center

There are a few things to consider after selecting a fulfillment center. They included:

Services Offered

Fulfillment centers offer a variety of services, so you'll need to decide which ones you need. Do you need them just to store your products, or do you need them to handle returns and customer service as well?

For example, if you need help with warehousing, pick a center that offers this service. Ensure that the center provides services specific to your industry.

Location

Consider the location of the fulfillment center. It should be close to your customers or suppliers to minimize shipping costs. The goal is to deliver your products to the customer as quickly and cheaply as possible.

If you are selling internationally, choose a fulfillment provider close to a major port. This will minimize the time and cost of shipping your products overseas.

Cost

Compare the costs of different fulfillment centers. Make sure to consider all the fees, including setup costs, monthly fees, and per-order fees. You should also ask about any minimums, such as a minimum number of orders per month. Understanding all the fees will help you compare apples to apples when considering different providers.

Don't forget to factor in the cost of shipping. Many providers will give you a shipping discount, but it's still important to compare rates. Shipping costs can quickly eat into your profits, so finding a provider that offers competitive rates is essential.

Finally, don't forget to factor in the cost of returns. Many providers will charge a restocking fee for returns, so you'll need to factor that into your costs. Additionally, some providers will require you to pay for return shipping, so that's something else to keep in mind.

Returns can be a major cost for an eCommerce business, so you want a provider that offers a return policy that makes sense for your business.

Shipping Times

One of the most important things to consider when choosing a fulfillment provider is shipping times. Make sure to find out how long it takes for orders to be shipped. You should also ask about the center's average shipping time.

Additionally, find out if the center offers expedited shipping. If you need orders to be shipped quickly, you'll want to ensure the center can accommodate your needs.

Capacity

Make sure the fulfillment process you choose has enough capacity to handle your current and future needs. You should have a good idea of your product volume and shipping needs before looking for a fulfillment center.

Consider the following when determining the capacity you need:

• The size of your products: The center will need enough space to store your products. The size affects the amount of storage space you'll need and the number of orders you ship.
• The number of orders you receive: The center will need enough staff to pick, pack, and ship your orders.
• The frequency of orders: The center will need to be able to handle the frequency of your orders. If you ship orders daily, you'll need a center that can work with that shipping schedule.
• Your growth plans: You should choose a center that can accommodate your future growth. If you plan to grow your business, make sure the center can handle an increase in orders.

The fulfillment center you choose should be able to accommodate your current and future needs. If you're unsure about the capacity you need, ask the provider for their opinion. They should be able to give you a good idea of the size of the facility you need.

Technology

Make sure the fulfillment company is using the latest technology. This will help them keep track of your inventory and orders. The latest technology can also help the center automate some of its processes, leading to faster shipping times and lower costs.

When you're looking at different providers, ask about their technology. Find out what software they use and how it benefits their customers. Additionally, you should ask about their plans for upgrading their technology. You want to ensure the provider you choose uses the latest and greatest technology.

Flexibility

The fulfillment center should be flexible and able to adapt to your changing needs. They should be able to scale their services to meet your growth.

When looking at different providers, ask about their flexibility. Find out how they handle changes in product volume. Ask about their plans for scaling their services. You want to make sure they can adapt to your changing needs.

Are Fulfillment Centers Worth it?

Fulfillment centers can be a valuable asset for businesses that need help with storage, packaging, and shipping. They can save you time and money by handling storage, packaging, and shipping. They can also help you scale your business by giving you access to their resources and expertise.

Whether a fulfillment company is right for your business depends on your specific needs. As you research fulfillment centers, consider the cost, location, and services offered to find the one that best meets your needs.

How Does 3PL eCommerce Fulfillment Operate?

3PL fulfillment centers store, package, and ship products for businesses. They can help businesses save time and money by handling these logistics tasks. Operations for 3PL eCommerce providers can vary, but most offer these key services:

Receiving & Inspecting Products

3PL providers will receive shipments from suppliers and check that the products meet quality standards. Third-party eCommerce fulfillment providers have receiving docks and warehouse staff to unload trucks and inspect products for damage. They will also count the inventory and update their system with the new product information.

The 3PL provider will then put the products away in their warehouse. Once the products are in the 3PL's warehouse, they are considered "in stock" and can be sold to customers.

Storing Products

3PL providers have storage facilities that can keep products safe and secure. They will use racks, shelves, and bins to organize products in the warehouse. eCommerce fulfillment providers will also monitor inventory levels so they know when to reorder products.

The 3PL provider will work with the business to create a storage plan that meets their needs. For example, if a business sells perishable goods, the 3PL provider will ensure that these products are stored in a temperature-controlled environment.

Picking & Packing Orders

Another key service offered by third-party logistics providers is picking and packing orders. When a customer places an order on a business's website, the 3PL provider will receive this order information and retrieve the products from their warehouse. They will then pack the products into boxes and ship them to the customer's shipping address.

3PL providers use order supply chain management systems to keep track of orders and inventory levels, ensuring orders are fulfilled accurately and promptly.

Shipping Orders

Third-party logistics eCommerce fulfillment providers will also ship orders to customers. They will choose the most efficient shipping method based on the customer's shipping address and the weight and size of the products.

3PL providers typically have relationships with shipping carriers, which allows them to get discounted rates, which can save businesses money on shipping costs. Third-party eCommerce fulfillment providers will also handle any returns or refunds for customers.

Shipping orders can be a complex and time-consuming task, but 3PL providers can make it easier for businesses.

Tracking Orders

Online commerce fulfillment providers can also track orders. This allows businesses to see where their products are at all times. Order tracking can be done using a tracking number or barcode. This information is typically accessible online so that businesses can check their orders' status 24/7.

Order tracking is a valuable service because it provides businesses with peace of mind and helps them keep their customers updated on the status of their orders.

Return Management

Third-party logistics eCommerce fulfillment providers can handle returns and refunds for customers. This can also be time-consuming and complex, but 3PL providers have the experience and knowledge to handle it efficiently.

When a customer returns a product, the 3PL provider will receive the returned product and inspect it. They will then process the return and update their inventory levels. If a customer is entitled to a refund, the 3PL provider will return the money to the customer.

Subscription Fulfillment Services

Third-party logistics fulfillment providers also offer subscription fulfillment services. This type of service is designed for businesses that sell products on a subscription basis, such as monthly boxes of product samples.

The 3PL provider will manage recurring orders and shipments, which can be a valuable time saver for businesses. The 3PL provider will handle all the fulfillment tasks, and the business can focus on other things.

Kitting & Assembly

3PL eCommerce fulfillment providers can provide kitting and assembly services.

With kitting and assembly, the 3PL provider will receive the products, assemble them according to the instructions, and then ship them to the customer's shipping address.

Freight Forwarding Services

Lastly, third-party logistics companies offer freight forwarding services. 

With freight forwarding, the 3PL provider will handle pallet orders from pick-up to drop-off, domestically and internationally. 

How To Find a 3PL eCommerce Partner

Finding a 3PL company is much the same as finding any fulfillment company. When choosing a 3PL provider, it is important to consider your needs and budget. You also want to select a provider with a good reputation and quality services.

Depending on your needs, there are a few ways to track down 3PL companies. The three main ways to search for 3PL companies are online directories, word-of-mouth recommendations, and industry association lists.

Searching Online

There are a few key ways businesses can search for and find 3PL (third-party logistics) providers, depending on their needs. If you're looking for a local 3PL company, a good place to start is by searching online using the term "3PL companies near me." This should bring up a list of providers in your area. The next step would be to check out each company's website and see what services they offer. 

Alternatively, you can search using the term "eCommerce 3PL," which will bring up companies specializing in eCommerce logistics. Further specifying your specific industry, such as "3PL for [industry]," can assist in filtering the results more.

Online Directories or Marketplace

Another way to find 3PL companies is through online directories or marketplace platforms. These platforms bring together 3PL providers and businesses looking for logistics services, making it easier to find the right provider for your needs. Although it may take some time to sift through all the options, this is a good way to get an overview of what's available and find a company that meets your specific requirements.

Finally, if you know any businesses that use 3PL services, you could ask them for recommendations. This is often the best way to find a reliable and reputable provider, as you'll get firsthand information from someone who has used their services before.

References

Make sure to ask for references. You should contact these references and ask about their experience. You can also ask the references for their opinion on the provider's shipping times, customer service, and pricing.

Online reviews can also be helpful when you're looking for a fulfillment center. Make sure to read the reviews and see what other people are saying about the provider. The reviews can give you a good idea of the provider's shipping times, customer service, and pricing.

The Better Business Bureau is another good resource. You can check to see if the provider is accredited and if they have any complaints against them.

Reputation

Research the reputation of the fulfillment center. Read online reviews and talk to other businesses in your industry. Find out if they are happy with the service they're receiving. You should also ask about the center's customer service to see if they are responsive to questions and concerns.

Research the center's track record. Make sure to find out how long they've been in business and ask about their experience with eCommerce businesses. Additionally, you can ask for references from other businesses that use the center.

Further Considerations

There are many 3PL eCommerce fulfillment providers to choose from. Here are a few key things to keep in mind:

Make sure the provider has experience with an eCommerce business.

• They should understand your business model and how to integrate their services with your eCommerce platform. The provider should also have a good understanding of shipping carriers and how to get the best rates and customize their services to meet your specific needs.

Consider the provider's pricing.

• Get quotes from several providers to compare prices. The provider's rates should be competitive. This is an important factor, but it should not be the only factor you consider.

Ask the provider about their security procedures.

• They should have a robust system in place to protect your inventory. Securing your inventory is vital to protecting your business. The provider should also have insurance to protect your business in case of loss or damage.

Make sure the provider has a good customer service team.

• You should be able to reach them easily by phone or email. A good customer service team will be responsive and helpful. The provider should also have a robust system for tracking orders and resolving any issues.

Once you've compiled a list of potential 3PL companies, you can start narrowing down your options by considering things like their size, location, services offered, and pricing. It's also a good idea to read online reviews of each company to get an idea of their level of customer service.

Reading reviews can be a helpful way to learn about potential red flags or issues you may not have considered otherwise. After you've done your research, you should be able to select the best 3PL company for your eCommerce business.

The right provider will be able to offer the services you need at a price that fits your budget. 

What Is the Best 3PL in the U.S.?

There are many factors to consider when choosing the best 3PL for an eCommerce provider. Below we highlight:

• Rakuten Super Logistics, now ShipNetwork: We are a leading provider of eCommerce fulfillment services. We have strategically located 3PL fulfillment warehouses spread across the U.S., handle a wide range of products, and provide custom packaging and branding solutions. Due to the expansive network and reach, we can provide our clients with an efficient and cost-effective solution for their eCommerce needs. We have also been ranked as one of the best 3PL providers for Shopify.

When choosing the top eCommerce 3PLs, it's important to consider your specific needs. Each business has different requirements when it comes to eCommerce fulfillment. The best eCommerce 3PL companies for your business may not be the best for another business. Take the time to find a provider that can offer the services and solutions you need.

Conclusion

If you're looking for a 3PL service provider that can offer scalability, flexibility, and cost savings, ShipNetwork is a perfect choice. With over 20 years of experience in eCommerce order fulfillment, we have the knowledge and expertise to provide you with a solution that fits your needs.

Our team is committed to providing excellent customer support, so you can rest assured that your orders will be handled with care.

Contact us today to learn more about our services and how we can help you take your business to the next level.

Sources

• How to Find a 3PL Provider
• 7 Tips to Find the Perfect 3PL for Your Fulfillment Network
• The Future Of Supply Chain Tech: Drivers, Trends And Opportunities
• The Cold Chain Is A Top Opportunity For Third-Party Logistics Providers
• Global Third Party Logistics (3PL) Market to Reach $1.3 Trillion by 2026