E-commerce business has given rise to several business operations, and 3PL is the most essential one. A 3PL service offers the logistical solutions an online company needs to operate to its capacity and be successful. They support various sectors and product categories, including manufacturing, food production, retail, and wholesale.
Each year, 3PL e-commerce fulfillment businesses manage an increasing volume of orders as more and more brands seek solutions to address their capacity and growth concerns. It is predicted that the worldwide 3PL industry will exceed $1.3 trillion by 2024.
Several leading 3PL service providers, including Red Stag Fulfillment, provide a unique solution for your company and handle order fulfillment. For information about outsourcing your order fulfillment, visit now.
Let’s discuss the role of third-party logistics (3PLs) in e-commerce.
The Importance of 3PL in E-commerce
Depending on the level of support you want for your e-commerce firm, 3PL suppliers offer various services. Each 3PL e-commerce fulfillment partner will be fundamentally different from another, depending on your business model and product category.
3PLs play the following role in e-commerce businesses.
It Helps to Manage Your Business Supply Chain
The success of an e-commerce firm depends on a well-functioning distribution network. A 3PL offers a network of various services that are essential to maintaining a smooth logistical operation. From warehousing to shipment, they will offer solutions that will impact the supply chain of your business positively.
It Helps to Provide Warehousing Service
Small and mid-sized e-commerce businesses don’t own a warehouse as it puts extra strain on an already limited budget. Typically, a 3PL will take care of your storage needs. It will invest in the facilities and equipment needed to run the warehouse efficiently. Because a 3PL can spread its overhead costs across multiple clients, warehousing is expected to be even more cost-effective.
It Helps to Provide Unification Service
E-commerce companies usually ship various small items to a single address. In this scenario, the amount of the purchase may be less than overall storage and shipment costs. This is where a 3PL’s consolidation services are particularly handy. A 3PL will consolidate such products in a single consignment, also known as freight aggregation or cargo aggregation. As a result, the seller makes some profit instead of reducing it.
Responsible Order Processing Service
An online store has accomplished nothing if it does not complete the orders. Order processing involves ensuring that the customer receives the products ordered and deals with any related issues. Items must be delivered on time, with the right equipment, and in expected quality. While it may seem obvious, incorrect fulfillment is a problem in e-commerce. In order to overcome this issue, your purchasing and shipping needs should be handled by a trusted third-party logistics service provider.
Moreover, 3PL firms can also handle returns for your business. If a product is returned, they can look over the complaints and decide whether the claims warrant a cashback or not.
For online merchants to scale and expand their business, third-party logistics are essential. This allows the business to focus on other areas and put more effort into creating new and better products/services and marketing strategies with scalable infrastructure.
Small businesses will continue to expand as e-commerce grows, and so should their use of 3PL services. By providing a first-class shopping experience to customers, 3PLs help drive business success. Furthermore, high customer satisfaction is strongly related to high conversion rates in your online business.