3PL stands for third-party logistics, and refers to the outsourcing of an ecommerce business’s logistics - including warehousing, fulfilment and distribution management - to a third-party business (also known as a 3PL provider) that deals with supply chain management.

A third-party logistics company acts as an ecommerce fulfilment business, providing the services required to outsource logistics.

As an ecommerce retail business owner, you may find that as your business grows, fulfilling your own customer orders becomes increasingly difficult to keep on top of. Alternatively, as a smaller business, outsourcing your order fulfilment and logistics services to a 3PL provider can be a much simpler, cost-effective method of establishing a presence within the ecommerce industry.

What Is the 3PL Process?

For a comprehensive guide to our fulfilment process, see our How it Works page.

Receiving Your Products

Of course, the 3PL service provider cannot ship your online business’s orders without first having inventory. This initial step refers to your items being accepted for delivery to the 3PL warehouse, as well as the storage of said items.

Warehousing

As soon as your inventory has been received by the warehouse, products are stored within the fulfilment center. For ease of access within inventory management software, each product has an individual SKU (Stock Keeping Unit) and assigned location within the warehouse.

At DEVLND, we have years of valuable experience with both warehouse management and inventory management, so you can be sure that your products are in the safest of hands.

Picking Orders

As soon as your customer places an order, the third-party fulfilment process begins. If you are aware of the phrase “pick-and-pack”, this is, of course, the first half of that process.

Occasionally, some fulfilment services will ask for orders to be uploaded manually to their inventory system. At DEVLND, our system integrates with a huge range of ecommerce platforms in order to speed up and smooth out the creases of the order management process. See our integrations page for further information.

Packing Orders

Once the order has been picked, the items are then packaged ready for shipping.

Packing materials vary from warehouse to warehouse, and often depends on your creative preferences, your 3PL company’s preferences, and the type of item being shipped to your customers.

Below are some examples of packing materials commonly used by third-party logistics shippers:

• Boxes - often unbranded, so as to retain brand identity through 3PL management. Easier to store/ship on pallets that most other packaging.

• Padded mailers - Envelopes reinforced with padded material such as recycled newsprint, bubble wrap or other materials with cushioning properties.

• Polybags - refers to bags made from polyethylene, the #1 plastic type used across the globe.

• Packing tape - sturdy tape used to seal packaging, cardboard boxes etc.

• Dunnage - material used to secure products in place within warehouse packaging during shipment.

Shipping

When it comes to order shipment, most third-party logistics providers will purchase and print labels on behalf of the merchant.

At DEVLND, we work with carrier partners to give you the best deal on shipping costs. See our partners page for further details.

As soon as your order is shipped, integrated tracking technology will send details of shipment to the merchant’s ecommerce store.

Returns Processing & Reverse Logistics

Many 3PLs, including DEVLND, will offer you a returns service; processing the items sent back by customers, as well as restocking (or disposing of) the products within the warehouse.

Often, you have the option of having your 3PL company provide return labels for your customers. Not only does this mean you won’t have to deal with returns in-house, it also allows your customers to track their return order with ease.

What Are the Advantages of Using a 3PL Provider?

Cost-Effective

Due to third-party logistics services specialising in the logistics sector, you will find that they have a wider reach than a smaller business’s supply chain network.

Often, 3PL businesses have a bigger influence over negotiations than self-fulfilled businesses - this can help reduce overhead costs, something that can be invaluable to small ecommerce businesses.

As well as making these cost savings, working with a supply chain management company will also help you save on infrastructure pricing - such as your own warehouse space, staff, technology, transportation services, etc.

Improved Customer Satisfaction

Without stating the obvious, the bottom line is if your customers are not 100% satisfied with the experience they’ve had with your business, then you are likely to feel the strain of it. Choosing a 3PL partner that has valuable experience with clients and customers will allow for better reviews, returning orders, and an improved overall customer experience.

Without the help of 3rd Party Logistics, you may struggle to fulfill aspects such as affordable next-day shipping rates (Amazon’s influence on the industry), efficient returns processing, keeping on top of inventory levels etc. These are undeniably key concerns when it comes to retaining customer satisfaction. If your competitors are able to offer these things which you cannot, it might be worth looking into what 3PLs offer in order to optimize your customers’ experience.

More Efficient Inventory Management

One aspect of a 3PL partnership that is often disregarded is the chance to upgrade and improve the efficiency of your inventory management.

A large portion of reliable third-party logistics companies, including DEVLND, offer tracking and warehouse management systems that integrate with your ecommerce platforms and sales channels. This may also feature real-time, precision inventory tracking for ease of keeping on top or your customer orders.

These featured tools will also allow you to optimise and market your business accordingly, gaining valuable new insight into your customer base. By outsourcing logistics operations to a 3PL provider, any improvements you wish to implement are most likely going to be less hassle than if you were handling the entire supply chain by yourself.

What Are the Disadvantages of Using a 3PL Provider?

Responsibility of Error

Finding a good, reliable 3PL partner usually means that they will take responsibility for any warehouse errors that may occur. However, this does not mean that they will interact directly with your customers.

More often than not, the customer will not be aware of who the middleman is regarding the order shipment process, therefore, when products arrive late/go missing, all complaints will still reflect on your business, regardless of who is at fault.

Stock Less Accessible

Inventory kept in 3PL locations will essentially be out of your hands and more difficult to access directly. Of course, your 3PL partner will most likely sync their inventory system with your warehouse management, however, naturally, it will be more difficult to correct any stock issues if there is that degree of separation between you and your products.

Understanding of Your Business

If you are operating a business that requires specific logistic needs (e.g. temperature-controlled transportation), some third-party fulfilment companies may not be the best option for your ecommerce business. Moreover, some larger 3PL companies have hundreds of clients from all over the world, and may struggle to give you the attention/expertise you need to run your business.

At DEVLND, we work closely with all of our 3PL clients, allowing for a simple, smooth logistics experience for both you and your customers.

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