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

You are currently viewing 3PL for eCommerce: Definition, Best Practices, and Guide

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.

3. Metrics for Accuracy

Metrics are measurements of business activity. Metrics for analyzing accuracy are crucial to maintaining a good customer relationship, as mistakes in the supply chain can easily trickle down and affect the customer on the receiving end. Choosing a 3PL that incorporates these metrics in their integration system will prove beneficial to improving customer relationship management (CRM).

Examples of metrics for accuracy may include something such as the number of inventory errors in a given time period. Improvements can then be made based on the data to minimize such errors.

These metrics must be consistent and reliable so management can use the information to communicate goals throughout the organization. They create a framework to improve business decisions because they provide statistical evidence for improvement.

Knowing whether your 3PL provider regularly analyzes these metrics will not only help you in the long run, but also your relationship with your customers.

4. Consistent, Clear Communication

Whether it’s communicating within the company, between companies, or between companies and consumers, partnering with a 3PL company that can provide consistent and clear communication is necessary for the foundation of the partnership and customer relationship.

Communicating with your 3PL provider will reduce the chance for errors along the supply chain that may eventually negatively impact the customer. Effective communication will also help you better understand your customers’ needs so that you can successfully deliver.

5. Customer Service

With clear and consistent communication comes delivering excellent customer service. 3PL companies that can provide customer service and seamlessly process returns will undoubtedly improve customer satisfaction and allow you to restock your inventory more quickly.

Keeping in mind these best practices will facilitate the decision making process when choosing your 3PL provider.

How to find the perfect 3PL provider for you

Partnering with a 3PL provider is a 3-way relationship between you, the 3PL, and your customers. As such, it’s important to consider 3PL providers who are implementing best practices to ensure you are getting your money’s worth.

Third-party logistics providers that can accommodate all your needs, maintain accuracy, communicate efficiently, and invest in customer service understand that quality fulfillment services and management extend both to your business as well as your customers. The ability to quickly and effortlessly identify and address any issues is the hallmark of an effective 3PL, such as ShipBots.

At ShipBots, we prioritize not only your needs but also your customers’ needs. We offer best-in-class fulfillment center support and quality control with dedicated specialists who will address any issue while upholding your brand’s reputation. Feel free to request a quote with ShipBots.