Convenience is placing the order and getting the parcel on or before the delivery date. Today, this convenience has been embraced by 150 million Amazon Prime users who are enjoying fast and free delivery on every order. Amazon Prime is the world’s largest third-party (3PL) network. The giant allows other sellers, brands, and e-tailers to utilize the massive infrastructure and fulfillment services. To put Amazon’s drill in a statement, the giant manages the process from warehouse to shipment. Due to its worldwide services, it has become a common term in the e-commerce platform. Basically, Amazon packs, stores, ships, and delivers. How convenient!
Here, one thing comes into the spotlight for relieving the burden of incurring costs – third-party logistics services aka 3PL. In conventional times, firms used to have their in-house fulfillment service. Unfortunately, these services were unable to keep up with the increasing customers’ demands as the limited hands of the firm fell short against the increased orders. Since the companies weren’t able to fulfill the order delivery on time, the customers remained unsatisfied. Plus the cost of warehouse, and shipment turned out to be additional heads under expenses. The 3PL network took care of both the issues.
3PL Driving E-commerce Industry and Firms
In the past decade, logistics has matured its entire system and has enhanced its various branches. This is the fine reason why it is so successful in providing numerous advantages to the e-commerce industry. As e-commerce firms have to deal with the array of technological and operational involvements, micro-scoping financially, 3PL is a suitable choice to save cost. Similar to cost, there are many reasons through which 3PL adds value in e-commerce.
Risk Mitigation
In order to ensure the smooth operation of a company, third-party logistics handle the entire inventory process. Alongside the process, they also bear the responsibility of handling the risks related to the products. The seller’s business gets saved from the additional hassle of managing product insurance because the 3PL covers all damages. Because a third party takes care of the entire inventory, any damage, theft, or breakage becomes entirely their responsibility.
Additionally, they save the business from incorrect deliveries as their fulfillment center comprises trained personnel, skilled operational workforces, and cloud based technology backbone. When any false deliveries occur, 3PL facilitators take responsibility for the entire loss.
Wide Reach
When it comes to delivery and transportation, 3PL slays! While a company has limited transport on rent, a third-party logistic company has a wide range of options. This includes the use of waterways, railroads, and airways, which enables a business to reach clients abroad. When logistics perform, business grows which in turn brings goodwill and name. This not only shoots up the sales of the firm but the e-commerce sector as a whole gets an upgrade.
3PL surfers go above and beyond and ensure the stock is taken care of to the most minute detail. From tracking every parcel to handling the hectic affairs of the shipment, 3PL eases e-commerce across all bases.
How to Choose a 3rd Party Logistics Provider?
Presently when third-party logistics providers are turning tables, the e-commerce industry is picking up the opportunities offered to them. As the e-commerce players are no longer getting into the hustle, they can move ahead focusing on other business functions. Certainly, this network offers a profit making deal for brands under the e-commerce umbrella. Keeping in mind these advantages, here are some factors that the e-commerce industry considers while tying up with 3PL networking platforms.
Region and Order Numbers
This point is pivotal. In an effort to conquer every market, firms often take on the contract with 3PL even when they have no customer base there. To fully utilize a logistic service, e-commerce businesses must have a customer base in different countries where the 3PL can work for them. If the customer base is limited to a particular region then there is no value in working with 3PL partners.
The condition of choosing a logistic provider applies when it comes to ordering numbers also. If the order request is below 100 then there’s no sense in tying up with a third-party provider because on many terms it’s manageable. A firm getting more than 100 orders from different regions should consider 3PL as the Sureshot option as managing alone on such a level can get cumbersome for e-commerce businesses.
Increasing Business Operations and Cost
An increase in operations and cost is capable of throwing lemons. As the business grows, new verticals, business lines, and concerns crop up which keep the firm occupied. Plus a firm may not have all the resources to utilize on every function. In this case, leveraging the authority of one function is a feasible option to keep the extra burden off the shoulders without compromising on quality. Here, the best is to bring in 3PLs. While they pack and ship, you stay back and enjoy the services satisfying your customers.
Including resources, costs are also limited. Unfortunately, SMEs or e-commerce firms often tend to exhaust both warehousing, transport, taxes, and delivery. So, in case you are incurring less than what you’re spending, then it’s high to make a smart move.
Ask Questions
This isn’t a benefit but something e-commerce should take note of while partnering with the 3PLs. Here is a list of questions that e-commerce companies can ask to evaluate how efficient the entire process of a 3PL is.
How do they operate?
How many warehouses do they have?
How strong is their existing fulfillment network?
What’s their minimum and maximum order capacity?
What’s their preferred fulfillment route?
How do they handle unexpected order spikes?
Once all these questions are answered, it gets easy to examine logistic facilitators’ capacity and efficiency. Similarly, it will be easy to determine whether the 3PL network has expertise in shipping similar products and similar volumes like your company.
The Excellence
There’s more to shipping and warehousing than you think! By leveraging technology, logistics is pushing boundaries and revolutionizing the world. Tech has changed the entire face of logistics as they’re no more limited to performing their core functions. To facilitate an efficient and smooth process, tracking mechanisms are changing where new techniques such as RFID are on a roll. These sensors built on cabs, trucks, and cargoes determine the condition and location of the inventory. The GPS accuracy enables the warehouse, transport, and shipment to work in sync without any malfunction.
As discussed, the face and phase of logistics are still evolving. From RFID to flying drones all the functions are on the run to gain excellence. After seeing all the advancements brought into logistics, it is crystal clear that this mere term holds a lot on its shoulders. What’s kicking the e-commerce industry is what’s more in the bag. The industry is waiting for the logistics industry to come to its full potential in these upcoming years. Today, with the eyes of hope, every firm looks for the support this network provides.
Cloverbites By Rupesh Sanghavi 
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