If You run an Online Store, You Need a 3PL!
Almost anything that a person needs or wants is available online. With the click of a button, you can order anything you want from an online store and have it at your house the next day.
Now, for the customer, this is a fairly simple process and is actually a rather pleasurable experience. For the shipper, there are a lot of steps required that the customer just doesn’t see. There are a lot of moving parts involved.
One of those biggest moving parts is that of the actual shipping process. And for online businesses, this is an area that can be a bit tricky to navigate, especially for drop shippers.
There is generally no warehouse, no distribution center, and a lot of middle-men. But, this is also where a solid 3PL comes into play.
In this blog post, we are looking at some of the ways that a 3PL partnership benefits online shippers. And if you are a drop shipper, pay attention because this applies to you more than anyone else!
The Role of the 3PL
Modern 3PLs offer services that are scalable and customizable.
But you do not need to have a physical business in order to take advantage of services that a 3PL offers. Things such as…
- Order processing
- Carrier Network Retention
- Software and Hardware solutions
- Supply Chain Management
- Invoicing and Auditing
- …and much more.
Ecommerce companies that are 100% online storefronts, typically use a third-party logistics company as a drop shipment source.
They have their products shipped to warehouses or fulfillment centers owned and operated by the 3rd party logistics company. As orders are received, they get inventoried, stored, and packaged.
Additionally, a 3PL can also set up individual carrier relationships, contracts for volume shipping, and negotiate all surcharges on behalf of their clients.
How an Online Store Benefits From 3PL Partnerships
Since a third-party logistics company offers services that are scalable and unique, it provides ecommerce businesses with a variety of benefits.
Some of the most impactful for any sized ecommerce business includes:
Most online companies operate their businesses with razor-thin profit margins.
This is due to the competitive nature of pricing and combining shipping costs, which is a service that today’s customer demands. Basically, if Amazon.com is offering it, your ecommerce business needs to match it.
The 3rd party logistics company offers multiple services that are aimed at helping the ecommerce business reduce their operating costs, which increases the profit margin, and thus – improves the bottom-line.
Improves Customer Service
The best 3rd party logistics companies use advanced technology solutions that can send instant updates for every order being processed. For example, if a customer in Maine orders a product from your online store, a third-party logistics company can pick it, packet, ship it and send communication to the customer via their platform of choice.
If they like and prefer email communication, they will receive updates from email. Texting and SMS notifications are also generally an option. This type of instant notification is a service that today’s customer expects, which improves the customer experience and strengthens the relationship.
Finding the Right Carriers
A leading cost for all retailers is shipping and receiving merchandise. A proven 3rd party logistics company maintains solid relationships with multiple carriers in different modes.
They can negotiate exceptional shipping rates on behalf of their clients, which again helps them to reduce their overhead expenses and increased profitability. However, they do not compromise quality when finding the right carriers. Every retailer understands the reality, a missed delivery or delivery error can make or break their business. Using the right carriers that are consistent, ethical, and deliver superior service to their customers benefits your business significantly.
Arguably the best feature or benefit that a third-party logistics company can provide an ecommerce operation is flexibility. Each service that is provided by a 3PL can be scaled back or expanded based on volume periods of the year. If your company is extremely busy during the holiday season, the 3PL can ramp up their operation to fit your growing volume needs. When business slows down, they can scale back the operation.
If you would like to learn more about creating a relationship with a third-party logistics company to help with your ecommerce solutions, contact the experts at Redwood Logistics today.