Many e-commerce businesses consider supply chain management one of their biggest challenges. Running a successful e-commerce business and handling logistics in-house can be tough, especially if your business receives large orders.
As a result, many savvy e-commerce businesses outsource supply chain operations to third-party logistics providers, or 3PLs.
3PL companies, like QuickBox, offer various services to e-commerce businesses of all sizes, such as inventory management, order fulfillment, and returns processing. This frees e-commerce businesses from the hassle of handling logistics in-house, allowing them to focus on what they excel at.
But why use a 3PL? Here, we'll explore some common pain points and the biggest advantages of third-party logistics.
Common Pain Points 3PLs Solve
Businesses face various logistics hurdles when it comes to their supply chain operations. Whether you run a small or large business, here are common pain points you might face and how working with a 3PL company can help you solve them effectively.
Slow Shipping
Nearly nine out of 10 U.S. customers expect to receive online orders within 48 hours. Fulfilling many orders within a short period can put an enormous strain on your team, especially if you receive a large order volume and have a lean team.
Sadly, slow delivery can harm your business's reputation. Partnering with a reliable 3PL can expedite delivery turnaround times. For instance, at QuickBox, we guarantee a 95% delivery rate within two days across the United States.
Order Errors
Businesses are prone to making order fulfillment errors, especially when there's high product demand. Errors such as sending incorrect quantities, dispatching the wrong product, or shipping to the wrong address can ruin your brand's reputation. Worse still, they can lead to lost business opportunities, as 17% of customers leave brands after just one negative experience.
Reliable 3PL providers have advanced systems in place to prevent order fulfillment errors. For example, at QuickBox, we have sophisticated systems in place that guarantee a 99.8% order accuracy rate.
Inventory Management
Real-time inventory management is a huge challenge for many businesses. In fact, 45% of supply chain professionals consider it a significant issue.
If you aren't tracking your inventory in real-time, your business could be susceptible to overstocking or stockouts. These issues can affect your business's supply chain efficiency or lead to missed sales opportunities.
3PLs can assist with inventory management. For instance, at QuickBox, we use sophisticated real-time inventory tracking systems that support FEFO (First Expired, First Out) and FIFO (First In, First Out) inventory management methods.
In-House Fulfillment vs. 3PL Fulfillment
Still unsure whether to keep fulfillment in-house or outsource to a 3PL? Here are some major reasons why hiring a 3PL might be more beneficial than handling logistics internally.
Scalability
Handling logistics in-house may seem feasible when you're starting out. However, as your business expands and product demand spikes, fulfilling orders can quickly become challenging.
3PL providers already have all the infrastructure in place to handle complex logistics. By partnering with a 3PL, you can easily scale your operations up or down depending on market demand.
Costs
Setting up an in-house logistics operation from scratch requires substantial investment in technology, equipment, and personnel. These expenses can strain finances significantly, especially for small and medium-sized enterprises.
By working with a 3PL, you won't need to invest in costly technology, labor, or warehouse space. You also won't need to worry about recurring expenses such as fuel, wages, rent, software subscriptions, or insurance.
Efficiency
Handling supply chain operations in-house can lead to various issues if your team doesn't have seasoned logistics professionals. 3PL companies have the experience and expertise to handle various logistics tasks.
Whether handling returns or multi-channel orders, 3PLs have the technical know-how to navigate complex logistics challenges. This expertise can prove invaluable for businesses seeking to enhance their operational efficiency.
How To Choose the Right 3PL Provider
Selecting a suitable 3PL partner is critical to the success of your business. Before settling for the first 3PL you encounter with an enticing pitch and low quote, here are key factors to consider when selecting a 3PL partner.
Service Offerings
3PLs aren't all built the same. While some offer a variety of services, others specialize in a few areas. Choose a 3PL provider that provides the services you require.
For instance, if you run a business in an industry with a high return rate, like the apparel industry, you'll want to partner with a 3PL offering returns processing.
Customer Support
You'll likely face logistics challenges occasionally if you run a busy e-commerce business. It's practically inevitable. And if those challenges arise, you'll need to get in touch with your 3PL provider.
Choose a 3PL with a dedicated customer support team or account managers who proactively address your queries and concerns. Ideally, the 3PL should offer customer support via your preferred communication channels and use multiple channels, including phone, email, text, online messaging apps, or live chat.
Warehouse Locations
Look for a 3PL with strategic fulfillment center locations. Choosing a 3PL with warehouses in strategic locations can enable you to ship products faster and reduce shipping costs.
The result? Improved customer satisfaction and operational efficiency — a win-win for your business and customers.
Technology
Assess the 3PL provider's tech stack. Your chosen company should provide integrations that work seamlessly with your preferred e-commerce platform, ERP, and CRM.
Advantages of 3PL Logistics
Many businesses are choosing to work with 3PLs to streamline their logistics processes. In fact, nine out of 10 Fortune 500 companies use 3PLs. Whether you run a startup or a large enterprise, here are third-party logistics benefits you'll get if you work with a 3PL.
Cost Savings
Outsourcing logistics to a 3PL can significantly reduce your overhead expenses. Working with a 3PL means you won't need to rent warehouse space, purchase logistics software, or pay in-house logistics professionals.
And best of all? 3PLs work with multiple businesses and have strong relationships with various carriers, enabling them to negotiate better shipping rates for their clients.
For instance, at QuickBox, we have relationships with multiple carriers, including DHL, UPS, and FedEx. This enables us to provide our clients with cost-effective shipping solutions.
Improved Efficiency and Speed
3PLs can enhance operational efficiency through their use of advanced technologies. For example, at QuickBox, we use real-time inventory tracking systems to help businesses maintain optimal inventory levels.
3PLs can also accelerate order processing and delivery. At QuickBox, we have multiple warehouses in strategic locations across the U.S. This enables us to fulfill orders faster.
Expertise and Scalability
Handling supply chain operations requires specialized knowledge in various areas, such as warehousing, inventory management, and order fulfillment. 3PLs have professionals who are experts in the ins and outs of logistics. From regulatory compliance to transportation management, 3PL professionals are well-versed in industry best practices.
3PLs also have the infrastructure and resources to scale quickly, depending on business needs. Whether you receive a large, unexpected order or get a seasonal spike in demand, a 3PL can adjust to your needs accordingly.
At QuickBox, we have a team with over 100 years of combined e-commerce fulfillment experience, and we offer tailored solutions for businesses looking to scale.
Focus on Core Business
Handling logistics in-house can expend significant time and resources. Outsourcing logistics frees up precious time and resources, allowing businesses to prioritize tasks they excel at, like marketing, product development, and customer experience.
This focus on core competencies can increase productivity, customer satisfaction, and revenue.
Integrations and Technology
3PL companies use advanced technologies, such as warehouse management systems (WMS) and order management systems (OMS). They also help businesses integrate these technologies with their existing in-house tools.
These sophisticated technologies provide end-to-end visibility across supply chains, enabling businesses to monitor shipments and track inventory. By integrating 3PL technologies into their operations, businesses can streamline and optimize supply chain operations.
For instance, a WMS can enable a business to keep tabs on inventory levels and replenish inventory at the right time in appropriate quantities to prevent stockouts.
Global Reach and Flexibility
Market analysts forecast that 33% of e-commerce spend will be cross-border by 2028. While international expansion presents a massive opportunity for e-commerce businesses, it's fraught with complexities, such as navigating regulatory hurdles.
Partnering with a 3PL can allow businesses looking to enter new international markets to expand their operations with minimal hassle. 3PLs partner with multiple international carriers and have warehouses scattered across the globe.
They are also well-versed in global logistics, such as customs requirements. These qualities make 3PLs beneficial for small and medium-sized enterprises that may not have the resources to manage international logistics.
At QuickBox, we partner with multiple international shipping carriers such as DHL, ePost Global, Passport, UPS, and Asendia, helping our clients expand their market reach.
How Working With a 3PL Can Maximize Return on Investment (ROI)
Outsourcing supply chain operations can significantly boost ROI by reducing overhead costs. It's no wonder that 80% of shippers report that 3PLs helped them lower overall logistics costs.
Besides lowering overhead costs, partnering with a 3PL like QuickBox can allow you to maximize ROI through zone skipping.
With zone skipping, you can combine packages headed to the same destination zone and ship them as a single shipment rather than sending each package through multiple zones. This can significantly lower your shipping costs and boost profit margins.
Get Started With QuickBox
Outsourcing supply chain operations to a 3PL offers various 3PL benefits, such as improved efficiency and speed, cost savings, and easy access to global markets. Best of all, it can allow you to focus on your core business while leaving logistics to experts.
Want to experience these 3PL logistics benefits? Contact QuickBox to learn more about how our 3PL services can help drive your brand's growth.