Updated: Oct 8
Third-Party fulfillment companies or 3PL providers are not a new industry option but have you ever thought about how they could benefit your business? Running a business is hard and no one will argue that fact. As the world becomes more interconnected with the internet and online shopping it becomes equally as hard to keep up with fulfillment demand. The days of 7 to 10 business days or even 3 business day shipping estimates are rapidly becoming ancient history. Amazon and other retailers now offer 2 day delivery or even same day delivery for much of their inventory. This has created an expectation among the new consumer, they want to know who will get their product out the fastest, but without sacrificing quality and care. So how do small businesses compete with large retailers that can meet these new fulfillment demands? Plenty of companies are now turning to technology-enabled 3PL providers.
What does it mean to be a technology-enabled 3PL?
A 3PL that is technology-enabled has created a process that is solely designed to be as efficient and speedy as possible to allow their clients to compete with everyone. The main offerings are still essential, the 3PL offers warehouse space, picking, and packing options but they have also created software to fully integrate with a client's store dashboard. Now information is flowing back and forth between a merchant and the fulfillment center, allowing for full transparency in all aspects of the order and fulfillment process.
What exactly is this order fulfillment technology?
This technology is a cloud-based software that begins to automate the process for an online retailer. It will automate the tracking of packages, inventory levels, picking, and packing. Making the process of the warehouse more efficient and timely to meet those expected, same-day or two-day delivery time windows. It works by integrating into different online stores and marketplaces so that the third-party fulfillment partner works as one with the merchant. It allows for real-time updates and information that are core to strategy and business growth.
Benefits of tech-enabled 3rd party fulfillment
1. 3PL Automation for time-saving efficiency.
Technology only works if it makes our lives easier, and this is exactly the purpose of tech-enabled 3PL’s. Gone are the days of sending over each order manually to a fulfillment partner, hoping to hit the deadline for your promised shipping window. The software now sends over the information the instant an order is placed online, allowing the warehouse to begin picking and packing. This frees up the need for any manual intervention in the fulfillment process by the merchant. They can focus on selling and marketing their business while the 3PL fulfills their orders in a timely and efficient manner,
Inventory levels are also tracked in real-time as well as what orders are shipped out for the day. These efficiencies translate into better management of the inventory ordering process, which begins to give a better picture of how the business is running in regards to popular items, or what items are not worth having for the client base.
2. 3PL fulfillment and discount shipping costs
Outsourcing to a tech-enabled 3PL is also a great way to understand who the client is while making sales. As the software tracks the packages and gives real-time updates and analytics, a business owner can now determine where the demographic for their store is and what they are expecting. 3PL providers will generally have multiple warehouses which can be utilized to have products closer to the customer. That decision becomes easy and efficient when it is known exactly where the product is going. Now peak shipping and ordering cycles can be tracked and supply chain management becomes easier as well. With the proper supply chain management information a business can optimize how and what to order from its manufacturers, ultimately cutting costs by determining what is most efficient.
3. Eliminate unnecessary errors
When the process of order fulfillment is automated you eliminate the need to manually enter information that would be sent to your fulfillment center. As we all know humans make mistakes and when this happens at the start of a process, it will cost money and possibly even a client. The information sent over to the warehouse is now less likely to be entered more than once or interrupted by a typo which saves money on returns, exchanges, or lost products.
Transparency in this process is also key, and with the real-time updates it can be determined how effective and accurate your partner is at handling your orders.
4. 3PL fulfillment center expert support
All businesses are successful because they have effectively met the expectations of their industry, however, they stay successful because they continue to adapt and change with those expectations. With a tech-enabled 3PL partnership the company can take advantage of the latest method to adapt and meet client expectations at the big box retail level. Customers can now expect to receive accurate information and answers to questions regarding their orders. The information makes the merchant confident because it is updated real-time and creates transparency that enhances the customer experience. The automated process also allows merchants to meet those fast turnaround times, which are all part of maintaining and growing a customer base. Customers not only buy the product, but they will also buy the service and ease of use in regards to handling shipping concerns or returns. Inventory is closer and more accessible to your existing customers and the information you now have gathered gives you clear and concise information to determine if you need to expand anywhere else to enhance client satisfaction all around.
If you are in the business of fulfilling orders online it makes sense you would need to consider anyone in that space to be your competition. Even if it doesn’t come down to products, you are competing every single time in regards to shipping speed. Customers are given so many options but they also want instant gratification or at least near-instant, technology makes this a very possible option.
The fulfillment process is important but also there are ways to make it easy and if that option exists it makes scaling much easier. When the manual work is taken out of fulfillment, a business can focus more on marketing and who they want to target. They save money and become more profitable. 3PL’s exist to make running a business that much easier and allowing them to grow beyond a small business. Bring down the unnecessary returns and exchanges, bring more clients to your business, and get those great customer reviews, bragging about how fast they got their items!