How do you currently manage your fulfilment? Are you finding it harder and harder to manage as your eCommerce business scales? Then you could reap some very tangible benefits by switching to a 3PL; most notably, cost savings. Find out how in this latest guide from the 3PL team.
What is a 3PL?
Before we delve into the many ways switching to a 3PL can save you money, we’ll first define what one actually is.
In the simplest sense, a 3PL is a company which specialises in carrying out fulfilment on behalf of other companies.
A good 3PL will be able to take care of the entire, end-to-end, fulfilment process including such tasks as inventory management, warehousing, order processing, customer service, shipping and more.
The key to making outsourced fulfilment work for your business is to find a 3PL that truly understands your fulfilment requirements and as such can leverage its expertise to generate savings for you.
How do 3PLs save eCommerce businesses money?
So now that we have a clear understanding of what a 3PL is and does, let’s take a closer look at the myriad ways that they can save eCommerce businesses money.
You can focus on what you do best
As you’ll be aware, running an eCommerce business is a considerable challenge in and of itself.
Having to also become an expert in logistics and fulfilment adds considerably to that challenge.
We’re willing to bet you started your eCommerce business because you were passionate about marketing and selling your products – not because you had a burning desire to become enmeshed in the world of shipping and logistics.
Outsourcing the fulfilment of your products to a 3PL frees you from the need to spend hundreds of hours getting to grips with the fulfilment industry. Instead, you can focus on what you do best – running your eCommerce store – whilst a set of external experts focus on making your fulfilment process as good as possible.
Most importantly, by outsourcing to a 3PL you won’t be making the costly mistakes that you’d experience if you tried to manage fulfilment yourself.
Which brings us to our next point…
Access to expertise
There’s a quote attributed to Plato which says, “each man is capable of doing one thing well. If he attempts several, he will fail to achieve distinction in any”.
It’s a quote which is particularly relevant to the world of fulfilment.
By outsourcing your fulfilment to a 3PL, you’ll be getting time-served experts to take care of your fulfilment for you.
Many 3PLs have teams of people with combined decades of experience. This experience translates into a smooth, consistent fulfilment experience.
What’s more, 3PLs stay up to date with the latest developments in fulfilment and logistics, and also have extensive industry contacts and networks. This means that 3PLs will be the first to identify the latest cost saving ideas in fulfilment.
No need for in-house investment
Fulfilment can be an expensive business. From investing in warehousing space to recruiting order fulfilment teams, trying to run all of your fulfilment in-house can quickly become an expensive endeavour.
Plus, not only can running fulfilment in-house involve considerable financial costs, it also means that you’ll have a large amount of your capital tied up in fulfilment infrastructure – when it could be better invested in other ways of expanding your eCommerce store (such as in product R&D or sales and marketing initiatives).
By outsourcing your fulfilment to a 3PL, you’ll be in a position to use the capital you’ve saved on more productive uses.
You’ll benefit from economies of scale
Because many 3PLs have multiple customers, they are able to produce economies of scale which they are then able to pass on to you.
The sort of savings you can expect include things like low-rates for shipping. This is because a 3PL will be dealing with many different couriers, on a high-volume basis, meaning they’ll be able to negotiate the kind of highly-competitive rates that you wouldn’t be able to command on your own.
You’ll benefit from the latest technology
Trying to purchase and manage the latest fulfilment tracking technology yourself can prove to be incredibly costly (as anyone involved in a corporate IT project will be able to attest to).
A good 3PL on the other hand, will offer you access to a cutting-edge fulfilment tracking platform which will provide you with complete visibility over your inventory, orders, sales channels and more. So, you’ll benefit from the latest fulfilment technology, without having to make the investment directly yourself.
You’ll benefit from process improvements
3PLs are always looking at ways in which they can streamline their fulfilment processes.
Whether it’s changes to the way in which inventory is stored or allocated, improvements to the pick and pack process, or the elimination of errors in delivery, it’s in a 3PL’s interest to continually improve their fulfilment processes.
And, of course, you and your customers also benefit from these process improvements.
3PLs must continually innovate in order to stay ahead of their competitors, and you’ll be the beneficiary of this.
That’s also a considerable amount of time they spend on improvements that you don’t have to – so you can focus on what you do best, whilst your fulfilment just gets better and better in the background.
You can access new markets
For many eCommerce businesses, it’s not practical or feasible to sell to customers in international locations.
The amount of bureaucracy and arrangements required to ship products internationally can be off-putting – but of course, that means you miss out on a whole slew of potential new customers!
Outsourcing your fulfilment to a 3PL changes that.
A good-quality 3PL will be able to handle international shipping on your behalf, dealing with any potential duties or other requirements. It’s highly likely that they already take care of international shipping for many of their existing customers anyway.
This not only saves you money in terms of reducing the amount of labour time you have to spend dealing with couriers, but can make you money too as you gain access to entirely new markets for your products.
Is it easy to switch 3PL providers?
Perhaps you’re already using a 3PL provider, but aren’t enjoying the benefits listed above?
If that’s the case, it’s probably time to think about switching to a new 3PL. But, what’s involved? Is it difficult?
Here at 3PL we have extensive experience in helping eCommerce brands switch from their current 3PL to us. We do so in a way which is seamless and ensures there is no disruption to your fulfilment – either for you, or your customers.
If you’re thinking about making the switch, but would like to chat through the process first, speak to one of our team today. They’ll be more than happy to answer any questions you have and explain how switching 3PLs works in more detail.
Time to start saving money on your fulfilment?
If you want to enjoy all of the benefits outlined above, then it’s time to think about outsourcing your fulfilment to 3PL.
We are an award-winning, UK-based third-party logistics provider that works with multiple leading eCommerce brands. As such, we’re adept at unleashing cost savings in fulfilment that we can then pass on to you.
Speak to 3PL about outsourcing your fulfilment today
For more fulfilment, logistics and shipping advice, read the 3PL blog…