Third Party Logistics Companies Uk - If you own an e-commerce business, order fulfillment is an important part of your operation. As your business grows, you may find that fulfilling customer orders in-house is no longer possible.
That's where third party shipping comes in! This guide covers everything you need to know about 3PLs to determine if they are right for you.
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Third-party logistics (or 3PL) refers to the outsourcing of e-commerce logistics processes to third-party businesses, including inventory management, warehousing, and fulfillment. 3PL providers allow e-commerce merchants to do more with tools and infrastructure to automate retail order fulfillment.
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We don't really know who coined the term "Third Party Shipping", but companies in the 1970's and 80's began to move inward and outward shipping services to third parties.
With the introduction and growth of e-commerce in the 1990s and 2000s, the term 3PL became more widespread and 3PLs expanded their services. Supply chain integration of warehouse operations and logistics services into what we call third-party logistics.
When researching 3PLs, you may come across the term 4PL. A 4PL adds a level of separation between e-commerce merchants and the 3PLs that deliver their products: When a business contracts with a 4PL, the 4PL manages and manages the 3PL's services for customers. This is sometimes called "double brokering".
4PL companies often provide supply chain management to customers, including 3PL services, manufacturing, inventory procurement, etc.
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If you are considering working with a 3PL company or are new to outsourcing, what goes on in a 3PL fulfillment center can seem like a black box.
So what happens in a 3PL warehouse when a customer clicks "Submit Order" in your online store? Come explore the entire process from start to finish.
A 3PL cannot ship orders without inventory on hand. "Receiving" inventory at a 3PL warehouse refers to receiving incoming inventory and then storing it.
For example, at , we require customers to fill out a Warehouse Receipt Order (WRO) so that we know what and how much we have received. This allows us to receive in an organized and timely manner, which means that we can begin to process your order more quickly and efficiently.
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Once we receive your inventory, we will store your items in our fulfillment center. Each SKU has a specific storage location, on a shelf, in a container or on a pallet.
Different 3PLs have different storage capacities; Not all 3PL warehouse spaces are created equal. It's important to work with a 3PL that has enough storage space for your current inventory - as your product line and order volume grow, your 3PL's warehouse should grow with you.
Note: A 3PL is different from an unclaimed warehousing company, which only matches you with excess space in warehouses without operating any logistics centers.
When the customer places an order, it is time for the 3PL implementation process to begin. (You've probably heard the term "pick and pack" before - that's the first half of it.)
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Some 3PLs require you to manually upload orders into their system. Sometimes, this includes schedules, including order details, customer delivery details, etc. This can be an inefficient and complicated way to manage orders.
Other 3PLs have sophisticated technology that integrates directly with your e-commerce platform or marketplace. This complete 3PL software integration brings orders, shipping, inventory tracking and stock levels, and more in one place to streamline the fulfillment process for automated logistics.
Once the order is sent to your 3PL, it is assigned to the warehouse picking team. Pickers receive a list of selected items, quantities and storage locations on site to collect the products ordered from their location.
Once all the ordered items have been received, it is time to package them safely for shipping. The packaging materials used depend on your 3PL's capabilities, your brand preferences, and the items being shipped.
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Some 3PLs charge packaging materials as a separate line item, while others include them as part of their fulfillment management services.
As experienced service providers, 3PLs select the best packaging materials to protect your products and achieve the lowest practical weight. They also optimize packaging so you don't have to share shipping.
Dimension weight is a shipping pricing method that takes package size into account to determine shipping rates. Using the right packaging materials can help reduce shipping costs.
If you want your brand to shine through your shipments, make sure you partner with a 3PL that lets you use custom packaging like boxes and inserts. Often, receiving a package is a customer's first personal experience with your brand, so branded packaging can make a big impression.
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The next step is to ship your order. Most 3PLs will purchase and print labels on your behalf. Some 3PLs prefer shipping partners, while others compare shipping costs from different carriers. The latter allows the 3PL to offer the customer the most appropriate price for the delivery speed selected by each customer.
Carriers such as DHL, USPS, and UPS receive orders from 3PL warehouses for shipping. The shipping and shipping speed for each order depends on the cooperation and policy of the 3PL, as well as the shipping options chosen by the customer and the end customer.
After the order is shipped, the 3PLs with the above integrated technology will automatically send the tracking details to the merchant's online store.
Many 3PLs also offer returns processing services. If a customer returns an order by returning it to your 3PL, your 3PL will return and restock or discard the item, depending on your policies and preferences.
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You may choose to have your 3PL provide return labels for your customers. This provides convenience for both you and your customers; You do not need to manage your returns at home and customers can easily track the status of their return orders.
In addition to shipping orders, 3PL fulfillment services may vary depending on the provider you choose. Here are some useful features and logistics services offered by 3PLs.
Inventory management involves more than just storing your products. A 3PL should allow you to easily sync inventory with your online store, view actual inventory levels at each third-party fulfillment center, and proactively prioritize inventory to prevent stockouts.
Once your 3PL receives and stores your inventory, you can check the volume and units sold per day for each product. This provides complete access to what can be sent to your customers at any time.
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Depending on the technology and workflow of the 3PL, you can also send a real-time stock count back to the store's website so that your customers know immediately when the product is out of stock.
Combine these trends with the fact that most popular online retailers offer two-day shipping and free shipping options, and it's clear: customers expect fast and affordable delivery at the click of a button.
As we'll discuss in the next chapter, the location of a 3PL warehouse can make or break your ability to deliver to customer expectations by keeping inventory at your shipping facility. Working with the right 3PL can help you offer 2-day shipping to your customers at an affordable price.
Third-party logistics providers often have relationships with carriers that allow them to offer discounted rates to their customers; However, the biggest cost savings for 2-day shipping come from spreading your inventory across multiple regional fulfillment centers.
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When working with a 3PL with multiple warehouses, you can distribute inventory across fulfillment centers to ship each order from the 3PL warehouse closest to your customer. This model is called inventory distribution.
With the right technology, 3PL companies can automate the order fulfillment process using powerful algorithms that route each order to the optimal fulfillment center.
If your customers are geographically distributed across the country, you may want to distribute your inventory across multiple fulfillment centers. This puts your inventory closer to your shipping location, which means you can provide guaranteed two-day advance shipping for customers in the surrounding area. It can be cheaper than air express shipping.
Allocating inventory isn't necessarily cost-effective for everyone, especially if you don't ship a lot. However, as your online business grows, having a network of fulfillment centers can help you reach customers more effectively.
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Distributing inventory across 3PL warehouses can also help you in the event that your order does not move out of a specific fulfillment center (for example, during extreme weather). Inventory distribution also helps with inventory management: when you store items in different areas, you have backups in case you run out.
Finding a 3PL that can handle both B2C and B2B will make your life easier if you are using a multi-channel logistics strategy. The B2B Fulfillment Suite and EDI capabilities enable merchants to sell across the entire B2B ecosystem, with retail shipping (following orders on the retailer's website) and wholesale shipping (including brick-and-mortar stores) connected to everyone. Big seller.
Whether it's fulfilling orders on your website or selling in a targeted store, you can use a 3PL to centralize multi-channel inventory management and act as your back-to-back logistics hub.
3PLs can help you
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