Benefits of 3PL Service for an Ecommerce Business
There is a multitude of benefits ecommerce companies can potentially gain by outsourcing supply chain management and logistics to a value-added 3PL provider. Third-party logistics is the coordination of people, products, and facilities and an end-to-end logistics solution that maximises productivity and profitability through combined resources distribution, transaction and fulfilment.
What is a 3PL Service?
3PL or third-party logistics in logistics and supply chain management is essentially a variety of external services and processes that allow you to outsource operational logistics from warehousing all the way through to delivery. 3PL operation is a very flexible and scalable, integrated solution to a business that includes distribution, transportation, warehousing, raw materials provision, inventory forecasting, packaging, freight forwarding and fulfilment services.
These services can be tailored explicitly based on the business needs, market conditions, products and delivery service requirements. Hence the 3PL services are more than just logistics support for a business. With the objectives of improving efficiencies and reducing the cost-3PL services integrate all aspects of the supply change management of a business and the value-added services related to the production or procurement of goods.
The globalisation of Third Party Logistics
With a larger extent of services and efficiency, the third-party logistics market is expanding rapidly along with the astonishing growth of ecommerce and new technology worldwide. Most of these 3PL providers are successfully and cost-prohibitively landing in global markets through strategic acquisition, organic growth and mergers.
According to PRNewswire, the 3PL market will increase significantly beyond 2020, with an approximate total valuation of more than $1.5 trillion by the year 2025, with the emergence of online business in Europe and Asia.
The reason why a 3PL has been generating a massive sum of revenue and is an integral part of ecommerce business is that it takes care of the entire logistics and supply chain management. So, business owners can focus on other crucial aspects of business like product development, sales, marketing, and so on.
Benefits of 3PL service in ecommerce business
Third-party logistics services encompass logistical responsibilities which are more than just shipping. 3PL explores all the aspects of warehousing, freight transporting, optimising inventory control, tracking, efficient provisioning of products, and so on.
Here are some of the purposes 3PL services chiefly concentrate on behalf of ecommerce businesses.
1.Efficiency in any business size:
The most significant advantage of a third-party logistics service is that it can tailor its logistics operations wholly based on the business size and its entire supply chain needs.
2. Visibility and reporting:
Most 3PL services assure efficient shipment management by using transportation management systems (TMS). This technology lets them attain 360-degree visibility into every operation and Helps business owners to keep track of all the updates.
3. Cost reduction per order:
3PL services have more leverage with freight companies to lower cost per order and improve fulfilment time compared to internally managed operations. For a larger order volume, 3PL services provide cost justification in multiple aspects like voice picking, automated sortation, conveyance systems, and so on. Reliable transport and logistics companies in Melbourne also cover good inventory forecasting and can help business owners optimise inventory levels and save on inventory holding costs.
4. Customisable value-added services:
3PL services cover all the responsibilities of data processing of orders, inventory tracking, product repacking, sub-assemblies, and just-in-time services just the way the ecommerce retailer's supply chain requires. Reliable 3PL providers also use the latest technologies and software like Warehouse Management Systems (WMS) and Systems Applications and Products (SAP) for product lifecycle management maximisation.
5. Benefits in international logistics:
In terms of international trading, third-party logistics can benefit the ecommerce business with all kinds of documentation, customs and laws that are varied from one country to another.
6. Possible expansion in new markets:
With the help of international 3PL service, an ecommerce business can expect boundless possibilities in any topography without having to make significant investments like having its own warehousing space around that area. 3PL will reach out to the customers with efficient shipment logistics management and help you with a better customer experience and available referral programs among the targeted customers in new markets.
7. Consolidation service:
One of the benefits of third-party logistics service is freight and cargo consolidation- which is a safe and secure way of shipping a large number of small packages at a specific location all at a time. This facility helps business owners to cut off a significant amount of costs once again.
8. Risk mitigation:
Delayed shipping is a common cause in the ecommerce business for a number of reasons. To avoid unforeseen circumstances like this, 3PL services take responsibility for alternative arrangements to deliver and fulfil the product orders feasibly, as quickly as possible, with the accountability of any potential loss or damage of the shipped goods.
9. Order fulfilment and better customer experience:
Using a third-party service as an external part of an online business assures customer satisfaction. Customers expect their ordered products to be delivered right on the due date. With the help of a broader distribution network, 3PL facilitates faster shipping in any part of the world.
10. Resource network:
3PL service providers have a vast resource network available that allows ecommerce companies to be benefited from volume discounts, faster delivery service, and lower overhead in every step of the supply chain efficiently.
In today's competitive business landscape, increasing the efficiency and speed of an ecommerce company's warehousing and overall logistics operations under a reasonable budget and cost is imperative. But having in-house logistics services, including the end-to-end supply chain, inventory and freight management, e-fulfilment, and transaction in different locales and geographies, is not quite feasible.
With increased technological advances, logistics companies in Melbourne providing 3PL service as an external part of business plays a significant role in increased efficiency in all the areas mentioned above.
