In today’s fast-paced business world, logistics plays a critical role in ensuring that products reach the consumer with ease. But as the supply chain landscape evolves, managing order fulfillment challenges in-house can often be overwhelming — especially as your business grows. Thankfully, partnering with a third-party logistics provider (3PL) can help you overcome these challenges and elevate many of your other operations in the process.
By helping you streamline your logistics operations, reduce costs, and increase customer satisfaction, a 3PL partnership can offer numerous benefits to burgeoning e-commerce brands or established enterprises alike. To better understand these benefits, let’s explore what a 3PL does, the key advantages of collaborating with one, and how to choose the right partner for your business needs.
What is a 3PL?
A 3PL offers outsourced logistics services to companies of all sizes. Some of the most common 3PL services include:
- Transportation
- Warehousing
- Inventory management
- Order fulfillment
- Shipping optimization
- Reverse logistics and returns management
Essentially, 3PL providers as an extension of your business, handling the operational aspects of getting your products to customers. By leveraging their expertise, businesses can streamline their own logistics processes, reduce costs, and focus on their core operations like product development and marketing.
The Benefits of Partnering with a 3PL
Whether it's the gains in logistics and warehousing efficiency or fewer obstacles when building a brand, working with a 3PL order fulfillment provider can bring many benefits to the companies that leverage their services. Here are the top five 3PL benefits.
1. Cost Savings
Managing your logistics in-house can be costly. One of the biggest 3PL advantages is the economies of scale and shared resources that they provide, helping companies reduce their overhead costs. The main expenses that 3PLs provide savings on are:
- Warehousing
- Shipping
- Transportation
- Labor
- Safety and compliance
3PL solutions already have the infrastructure in place needed to optimize your order fulfillment processes. They've invested into building their logistical framework so that you don't have to.
2. Expertise and Efficiency
3PL providers specialize in logistics and supply chain management, which means they’re equipped with the knowledge, technology, and tools to optimize processes. Their expertise ensures that your goods are stored, managed, and shipped efficiently, and their tools help them maximize your throughput so that your products can reach customers faster.
3. Scalability and Flexibility
As your business grows, your logistics needs will change. Some companies offer highly seasonal products and may require additional storage during peak demand, while others may be pivoting to a new retail fulfillment model to tap into new markets. Whatever your business's needs may be, utilizing 3PL services lets you scale operations up or down as needed, without the hassle of managing additional infrastructure or staff.
4. Improved Focus on Core Business Activities
Logistics is time-consuming, and handling your supply chain workflows in-house can draw valuable time and resources away from more mission-critical processes. Outsourcing your logistics operations to a 3PL fulfillment partner means you can allot more time to strategic activities like:
- Product development
- Crafting compelling marketing campaigns
- Building deeper customer relationships
- Making more sales
Your business has enough to worry about without getting weighed down by logistics. Working with a 3PL lets you refocus your attention to more central business operations so that you can get back to building your brand.
5. Access to Advanced Technology
If you're like many businesses, you don't have the time or the money it takes to implement leading warehousing logistics technologies. 3PL providers already have the state-of-the-art supply chain technologies in place to make your order fulfillment pipeline flow smoothly, like:
- Software, such as warehouse management systems (WMS), transportation management systems (TMS), and real-time tracking tools
- Hardware, such as autonomous vehicles, drones, collaborative robots (cobots), and RFID tags
- Fleets of freight trucks and carriers
Partnering with a 3PL grants you access to the tools and tech needed to make smarter order fulfillment decisions and perform your warehousing workflows faster. The result is greater visibility and control over your supply chain, as well as a logistics infrastructure that lets you get more done.
When to Consider Partnering with a 3PL
Not every business needs a 3PL from day one, but their logistics needs will often change. It's important to understand which factors you should consider as you assess whether it's time to explore 3PL solutions so that you'll know when you should make the switch. A few signs that it may be time to consult with a 3PL fulfillment provider are:
- Your logistics costs are skyrocketing due to supply chain bottlenecks, rising shipping costs, or other factors.
- You’re struggling to meet delivery deadlines, dampening customer satisfaction.
- Your current storage space can’t keep up with demand — a good problem to have until customers walk away because their desired products are out of stock.
- You’re planning to expand into new markets, such as the subscription box industry.
- You want to improve customer satisfaction with faster shipping options or a smoother post-purchase experience.
Another way to tell if you need 3PL services is to assess the complexity of your picking and packing operations. Complex orders may require kitting and assembly services, and highly tailored products may need custom packaging that's as unique as the products they hold. 3PL providers have sophisticated processes that ensure even the most intricate orders are picked, packed, and assembled right every time.
How to Choose the Right 3PL Partner
Finding the right 3PL partner is critical for achieving a successful collaboration, so knowing what to look for is a must. Here’s how to evaluate potential providers:
- Assess their capabilities. Does your prospective 3PL partner adhere to the rigorous standards that enable fulfillment by Amazon (FBA)? Do they offer reverse logistics and coordinate with last-mile shippers? Ensure that your 3PL can handle your specific needs, such as e-commerce fulfillment, temperature-controlled storage, or international shipping so that you won't have to compromise on your inventory management processes.
- Check for industry experience. 3PLs with experience in your industry will better understand the unique challenges and compliance requirements you face, so try to find one that operates in your vertical.
- Evaluate technology and integration. 3PLs may use certain logistics tools and platforms to complete their workflows, and they'll need to be compatible with the other tools in your stack. Make sure your 3PL's technology seamlessly aligns with your systems, allowing for complete integration and real-time visibility.
- Review their track record. References are always helpful. When you evaluate 3PL partners, ask for references or case studies to gauge their performance, reliability, and customer satisfaction rates.
Another important factor to consider is scalability. You want your business to grow, and you need a 3PL partner that can grow alongside you. Choose a 3PL that will let you throttle their services up or down easily and fluidly adapt to your changing needs.
Real-Life Impact: Success Stories of 3PL Partnerships
Here are two stories of how clients experienced real-life benefits by partnering with a 3PL.
- E-Commerce Brand Expansion. A small e-commerce company struggled with delayed orders and high storage costs. By partnering with a 3PL, they gained access to multiple fulfillment centers, reducing shipping times and costs. The result was higher customer satisfaction — and a 35% increase in repeat purchases.
- International Market Entry. An established retailer wanted to expand into international markets but was daunted by customs regulations and shipping complexities. A 3PL with expertise in global logistics helped them navigate these challenges, ensuring smooth entry into new regions.
QuickBox's supply chain expertise and dedicated team of support staff have leveraged logistics time and again to create real business value. The only question: What can we do for you?
Partnering with a 3PL is a Game-Changer
In an era where customer expectations for fast, accurate deliveries are higher than ever, partnering with a 3PL can be the strategic advantage your business needs. From cutting costs and improving efficiency to enabling scalability and accessing advanced technology, the benefits are clear. As supply chains become more complex, choosing the right 3PL partner ensures you’re not just keeping up with logistics demands — you’re staying ahead of them.