A 3PL, or Third Party Logistics Provider, is a company that provides logistics services (such as warehousing, shipping, and/or order fulfillment) to other businesses. Once your e-commerce business reaches the size where you can no longer comfortably keep up with your daily orders, you probably need to start looking at 3PLs. Logistics providers come in all shapes and sizes, and they don’t all offer exactly the same services. But, in general, you can expect a 3PL to provide some combination of the following:
Receiving, Warehousing and Storage
Once your business has grown to a certain size, you’ll need somewhere to store your inventory. Unless you’re a major retailer, chances are you don’t need an entire warehouse of your own. That’s where 3PLs come in. Just submit an ASN (Advance Shipping Notification) if required, and ship your inventory to the 3PL’s warehouse/fulfillment center. Once your products arrive, your 3PL will scan and securely store them so they’re ready to ship when orders start coming in.
Of course, in order to keep track of and manage your inventory, you’ll need some powerful software. Any good 3PL will have an integrated logistics platform that allows you to upload product information, manage incoming orders, see how much inventory is in stock at any given time, and set your shipping and returns options. Ideally, the system will integrate with a variety of online shopping carts, like Shopify, Magento, BigCommerce, and others. That way, when a customer visits your online store and makes a purchase, their order will instantly transfer to the order management platform for fast order fulfillment.
Order Picking and Packing
When an order comes in from your online store, employees at the 3PL’s fulfillment center will pick the items ordered from the warehouse shelves and pack them according to the 3PL’s procedures, taking into account any specific packing requirements you have. As logistics experts, your 3PL will choose appropriate packaging to protect your items in transit, while also avoiding excess packaging in order to achieve the lowest possible dimensional weight. (As a side note, don’t underestimate the ways in which adding some flair to your basic packaging can enhance the customer experience. A great unboxing experience adds excitement to the purchase and leads to happier and more loyal customers!)
Transportation and Shipping Coordination
Once an order has been picked and packed, it has to be shipped to your customer. Top tier 3PLs should be able to ship an order the same day it’s received or, if the order comes in later in the afternoon, the very next business day. Your 3PL will work with you to determine which shipping carriers and services you prefer to use, or you can rely on their expertise to choose the best options for your brand.
After the order has shipped, the 3PL can provide the carrier’s tracking number. Often, the 3PL’s integrated logistics platform automatically sends tracking details to your online store, where your customers can easily view them.
Did you know that 80% of online customers say they would be unlikely to buy from the same vendor again if returns are not easy? Returns shouldn’t be painful for you or your customers. Most 3PL inventory management platforms will let you set up a returns profile so that the system can automatically approve or deny returns based on your policy.
Your customers are your most important asset, but answering their questions and solving their issues can be a time-consuming endeavor for businesses of any size. If you have the time and resources, you could handle customer inquiries in-house. Sometimes, however, it makes more sense to outsource. While not traditionally the role of a 3PL, some logistics providers have the ability to take customer support off your hands. If they offer this service, they will learn your products and policies inside and out, handling your customers’ inquiries with as much attention and care as you would yourself.
“Simple Global has been a key partner in MVMT’s success. We often hear horror stories about other third-party logistics firms but have had nothing but amazing things to say about Simple Global. From four to 1,000 orders a day, they’ve been able to scale with us since the conception of the brand. We don’t consider them a service provider, but an extension of the MVMT team.”
Jake Kassan, Co-Founder and CEO
Simple Global provides easy-to-understand 3PL services and transparent pricing – you’ll never be surprised by hidden fees. From shipping rates to work order fees, you’ll always know exactly what you’ll pay.