Over the past few years, the global e-commerce market has grown rapidly. Currently, more and more businesses are turning to online sales to expand their customer base and increase revenue. However, this unprecedented growth has led to a few problems, mostly related to new challenges in terms of logistics and fulfillment.
That is where third-party logistics (3PL) services come in.
A 3PL provider specializes in providing services related to logistics and supply chain management. They offer several services, including warehousing, inventory management, order fulfillment, and shipping. With their monumental growth, e-commerce businesses have been increasingly relying on 3PL services to help them manage these aspects of their business, and here’s why.
#1 3PL Solutions are Cost-Effective
One of the most important reasons why e-commerce stores rely so much on 3PL services is that they are cost-effective.
Instead of investing in their own warehouse, transportation, and shipping infrastructure, e-commerce stores can outsource these services to a 3PL provider. This allows the platforms to save money on the overhead costs associated with maintaining their own logistics network. These costs include everything from purchasing and maintaining resources and manpower like vehicles, employees, technology, and so on.
There’s also the fact that 3PL providers often have established relationships with shipping carriers and can negotiate better rates. This will further help your e-commerce business to reduce logistics costs.
#2 More Options for Scalability
As e-commerce businesses grow, they must be able to scale their logistics operations to meet the increasing demand. 3PL providers can offer these scalable solutions to meet the needs of your growing e-commerce business.
For example, a 3PL provider can offer additional warehouse space, more workers for order fulfillment, and access to a larger transportation network to accommodate increased shipping volume. Doing all this on your own will not only cost you more money and time, but it will also have you divert your focus from the core e-commerce operations of your business.
This is especially a good option for locally-run e-commerce stores. They can find local 3PL services with warehouses spread across the city or state.
Take Southern California as an example. The e-commerce market is booming there, and speedy delivery is vital. 3PL provider Sooner Express offers fulfillment services across this region thanks to its warehousing services in Moorpark and Simi Valley.
This makes it very convenient for the provider to ensure efficient delivery in that region. Thus, e-commerce businesses in that region are dependent on this 3PL provider and others like it, so that their customers receive orders on time and distribution operations can be scaled up whenever necessary.
#3 Offers More Expertise
Most e-commerce businesses, especially the new ones, lack the expertise and resources necessary to manage their own logistics operations effectively. That’s why they turn to third-party logistics services.
3PL providers specialize in logistics and supply chain management. They have all the experience and knowledge necessary for handling complex logistics challenges in the e-commerce industry. With that, they can provide you guidance on how to optimize your logistics operations, improve your inventory management, and streamline the shipping process.
By partnering with a 3PL provider, you can benefit from their expertise and focus on other areas of your business, like marketing and product development.
#4 Better and Efficient Use of Technology
Logistics operations these days have become increasingly dependent on technology, and that’s a good thing. Tools like warehouse management systems (WMS) and transportation management systems (TMS) are being used by these 3PL providers to manage their day-to-day operations more effectively.
However, these technologies can be expensive to implement and maintain. 3PL providers can afford them because they manage many businesses, and these technologies won’t sit idle for them. For your e-commerce business, though, investing in the same technologies will not only be expensive because of the cost but because you might not be able to use them to their full potential.
#5 Faster Delivery Times
Delivery times are critical for e-commerce businesses. Customers expect fast and reliable shipping, and delays can result in lost sales and damage to your e-commerce brand’s reputation.
3PL providers can help e-commerce businesses achieve faster delivery times by providing access to a larger and better transportation network and a more efficient shipping process. Through a 3PL provider, you can even provide express and same-day deliveries, something that will be impossible to maintain efficiently on your own.
Based on the above-mentioned reasons, it’s easy to see why e-commerce businesses are so reliant on 3PL providers, and if you run an e-commerce business of your own, you, too, shouldn’t hesitate to work with them.