3PL for eCommerce: Definition, Best Practices, and Guide

Updated: Nov 2, 2021

3PL eCommerce fulfillment services

Building your own business from the ground up can be confusing, especially when it comes to choosing the right shipping and eCommerce fulfillment services for you. Deciding whether to handle your operations in-house or to outsource is instrumental in scaling your business and requires a clear understanding of your business model and goals.

Understanding what’s best for your business starts with understanding the industry jargon, best practices, and how to correctly implement them. Below is a brief guide on everything 3PL to help you get started on growing your e-commerce business.

What is a 3PL?

A third party logistics provider (3PL), such as ShipBots, is a fulfillment center that stores your inventory and handles the picking, packing and shipping so that you can focus on increasing sales and marketability.

3PLs offer a wide variety of fulfillment and warehouse services, which may include:

  • Warehousing and storage

  • Inventory management

  • Shipping and receiving

  • FTL and LTL freight shipping

  • Picking and packing

  • Reverse logistics (returns)

Third party logistics companies serve as a link between your manufacturing operations and customers. Maintaining a smooth-running 3PL supply chain using the industry’s best practices will ensure that your customers are satisfied and your business is booming.

Top five 3PL best practices

Best practices not only help distinguish top 3PLs from their competitors, but they also ensure the best possible outcome: an orderly supply chain that maximizes efficiency while minimizing costs, making room for scalable growth.

Regardless of the size of your business, identifying and understanding these best practices will help make choosing your 3PL provider much easier.

1. Flexibility

Seasonal fluctuations, variability in sales volume, sudden business growth...can your 3PL adapt their operations to meet your needs? Typically, 3PLs have scalable resources—labor, warehouse space, and technology—to accommodate your ever-changing needs and ensure that you can deliver for your customer. By having not only the right resources but also a variety of scalable resources, you’ll be more responsive to customer demands.

2. Scalability

3PL companies that offer scalability are the ones to prioritize. As with flexibility, scalability is also necessary to guarantee simultaneous growth with your preferred 3PL.

If you run a small- to medium- sized business, you may consider a smaller 3PL for cost-saving purposes. However, keep in mind that as your business grows, your 3PL must be able to adapt as well. If you already run a large-scale operation, make sure you are choosing a 3PL that can handle the volume of products and returns necessary to maintain your operations while still reducing costs.