Producing and selling quality products alone do not guarantee customer satisfaction. To influence customer experience, you must ensure that the order fulfillment process is also top class. Logistics is an aspect of business operation that requires lots of experience, infrastructure, and proficiency. This is why it’s best to outsource it to a third-party logistics (3PL) company.
What is 3PL?
A third-party logistics service handles your order fulfillment. Once the buyer places the order online, the 3PL packages and ships the product, ensuring that it’s delivered on time. 3PL operations go beyond product delivery. It includes warehouse management, inventory information, and analytics.
Benefits of a 3PL for your eCommerce Business
Like every business decision, the benefits should outweigh the costs before adopting it. What benefits does your eCommerce business stand to gain from a 3PL service?
Partnering with a 3PL reduces costs incurred while running your business. If you have to fulfill orders in different locations, running the logistics will be challenging. You have to spend considerable financial resources on inventory maintenance, vehicle procurement, maintenance, logistics staff salaries, etc.
The logistics costs incurred are not limited to money. As the business owner or manager, you will spend a lot of time managing logistics staff and resources. Since you have only 24 hours a day, it naturally takes time away from improving your products and other ways of satisfying your customers.
Additionally, running an in-house order fulfillment places more demand on your staff, who are unlikely to have the experience and training needed to handle complex logistics functions. Even if you manage to hire fully highly competent staff, it takes a considerable chunk of your budget. These resources will be better spent by outsourcing your eCommerce order fulfillment to a 3PL while the extra is used to improve your products.
Most small and medium businesses can only afford to hire entry-level employees. It’s a practical way to run the company because they typically can’t afford to hire more experienced staff. However, some aspects of the business need high-level proficiency to maintain customer satisfaction. One such area is order fulfillment. Even if you manufacture and sell top-quality products, customers will be unsatisfied if they get their orders late or damaged.
3PLs ensure that your customers get top-notch order fulfillment even though you run a small eCommerce business. As a result, your customers can have a brand perception similar to much more prominent players in the market.
As a business owner, it is possible to train yourself to become proficient in handling logistics. However, the order fulfillment process is rapidly evolving, making it more challenging to stay updated. Outsourcing your deliveries to a 3PL ensures that your brand takes advantage of your industry’s best practices and meets your customer’s expectations.
Most businesses start with the owner and staff fulfilling all the orders. This is possible when you have less than ten deliveries to make per week. However, if you expect business growth, prepare to handle hundreds of orders weekly. To ensure consistency in customer satisfaction, you must increase capacity before expanding.
A 3PL makes it easy for your business to adjust when order volumes increase. An effective third-party logistics partner gives you access to the technology, storage space, and workforce needed to handle the present and plan future expansions.
Furthermore, you can add an international dimension to your eCommerce business without worrying about delivering your products across borders. The best 3PLs have warehousing facilities in strategic locations, which reduce order fulfillment time for international deliveries.
Although an efficient 3PL service gives you access to helpful features, they can also customize the service to suit your business best. Some companies require specific packaging requirements to enhance their brand image. For example, if you have several environmentally conscious customers, sustainable packaging effectively communicates such brand values and increases customer loyalty.
Also, some businesses require in-depth information and analytics on inventory management and order fulfillment. Your 3PL partner places all the data you need at your fingertips by providing the knowledge and technology required for proper management.
Improved fulfillment speed
With the right third-party logistics service, your buyers will receive their orders faster. Ensure fast deliveries by choosing a 3PL that manages warehousing facilities in more locations. Some facilities serve whole regions while others only serve locally. Customers receive their purchases faster with international facilities because the products are transported over shorter distances.
Covid-19 has caused several changes in the supply chain in several countries. Suppliers and distributors have had to adjust within short notice. Due to frequent policy changes, the supply chain issues had far more significant consequences on international deliveries.
Partnering with a 3PL ensures that you do not bear the order fulfillment risk alone. It also helps you stay ahead of sudden changes in the supply chain and what it means for your product’s order fulfillment.
Optimized customer service
A lot can happen between shipping and the final delivery of the purchase to a customer. If there’s a delay or other issue with the delivery, customers naturally reach out to the supplier for clarification. With an in-house logistics system, the supplier only has limited information to address the customer’s complaint. An effective 3PL service has the required software solutions that give real-time updates regarding the delivery status. This means that the customer can accurately estimate the delivery time. Also, if there are issues, the supplier has enough information to address them.
If your eCommerce customers are experiencing late or poor deliveries, it’s time to switch to a 3PL. Also, if you are handling your order fulfillments decently but need to expand in the future, a 3PL will make the process smooth without harming other business operations.