As an e-commerce business owner, finding ways to scale and improve your operations is key to success. One strategy many companies have turned to is partnering with a third-party logistics provider, or 3PL. A 3PL can handle key logistical functions like warehousing, shipping, and fulfillment so you can focus on growing your business. If you're considering working with a 3PL, learning from examples of other e-commerce companies can help determine if it's the right move for you.
E-commerce businesses rely on third-party logistics (3PL) providers to help manage inventory and fulfillment. 3PL services offer an efficient way to handle the storage, packaging, and shipping of products without the high costs of doing it in-house. Many e-commerce companies leverage 3PL to scale their operations as they grow.
Businesses like Shopify, Wayfair, and Chewy outsource most of their logistics to 3PL companies. They handle millions of shipments per year, so maintaining their own warehouses and shipping operations would be hugely expensive and complicated. Instead, they partner with large 3PL providers that have an established shipping and fulfillment infrastructure already in place. This allows the companies to focus on their core business of selling products online rather than managing complex logistics operations.
Working with a 3PL, an e-commerce business can access advanced warehouse management systems to keep track of inventory. The 3PL handles intake of new product shipments, storage of items, picking and packing of customer orders, and shipping. Their inventory management software gives the business real-time data on what products are in the warehouse, available quantities, and alerts if anything is running low. This level of insight and control helps businesses keep the right amount of stock on hand to meet customer demand.
As an e-commerce company grows, a 3PL partnership provides flexibility and scalability. The business can easily increase or decrease the amount of warehouse space and staffing as needed based on sales volume and seasonal changes. The 3PL has the infrastructure to quickly scale up or down to match the company's needs. This agility is vital for fast-growing e-commerce brands and helps them provide the best possible customer experience regardless of company size or time of year.
In summary, outsourcing logistics and fulfillment to a 3PL provider offers e-commerce businesses efficiency, streamlined operations, data-driven inventory management, and the flexibility to scale as needed. The key is finding a 3PL partner with the experience, technology, and infrastructure to meet a company's unique needs and support its growth.
Once an ecommerce business starts gaining significant traction, order fulfillment and shipping accuracy become increasingly important. To scale efficiently, many turn to third-party logistics (3PL) providers. A 3PL partner can help ensure consistent, on-time delivery and a great customer experience.
Let's imagine the following to see this in a tangible 3pl example.
EcoToronto* is an ecommerce company that sells sustainable goods. As their business grew quickly, managing logistics in-house became unfeasible. They decided to partner with a 3PL to handle warehousing, order fulfillment, and shipping.
After evaluating several 3PLs, EcoToronto chose one with expertise in ecommerce and a track record of high shipping accuracy. The 3PL took over EcoToronto’s logistics operations, giving EcoToronto more time to focus on their core business.
With the 3PL handling logistics, EcoToronto immediately saw improvements in shipping accuracy and customer satisfaction:
Order fulfillment errors dropped by over 60% in the first month. The 3PL’s advanced warehouse management system and rigorous quality controls reduced picking and packing mistakes.
On-time shipping improved by over 80% as the 3PL optimized the entire fulfillment workflow. They identified and fixed bottlenecks, ensuring most orders now ship within 1 business day.
Customer complaints about shipping delays, errors or damaged goods declined dramatically. The 3PL’s logistics expertise and dedicated support team provide quick issue resolution.
Return rates decreased as the result of fewer delivery or product issues. The 3PL’s streamlined returns process also made it easier for customers to return items when necessary.
By outsourcing logistics to a qualified 3PL partner, EcoToronto has been able to scale their business efficiently while also improving the customer experience. The benefits of working with a 3PL—reduced costs, improved accuracy and faster shipping—have allowed EcoToronto to focus on growth and better serving their customers.
As an ecommerce business owner, you understand the importance of an effective supply chain and shipping partner. The examples showcased here from leading ecomm companies highlight the range of benefits a third-party logistics provider can offer. From shipping expertise and scalability to cost savings and improved customer experience, a 3PL partnership may be key to reaching your business goals. Now is the time to evaluate if outsourcing fulfillment and shipping to a 3PL is the right move for your company's needs and budget. With many options available, you can find a provider tailored to your ecommerce model and facilitate future growth. The possibilities for your business are vast; a 3PL partnership could help make them reality.