3PL for retailers is a game changer. It makes shipping and delivery better. Retail fulfillment and inventory management is hard. A 3PL helps retailers overcome these hurdles. They streamline processes while improving efficiency, so your customers stay happy.
The International Warehouse and Logistics Association (IWLA) promotes best practices within the 3PL industry. These providers give retailers access to services that include order fulfillment, inventory management, and shipping. With 3PL support, retailers can focus on sales and growth, while enjoying cost savings and improved customer satisfaction.
We’ll show you how the right 3PL can take your retail business to new heights and improve how customers feel about your business.
Table of Contents
A Third Party Logistics (3PL) provider is a popular option for businesses that need to outsource their fulfillment and shipping needs. More retailers than ever are using 3PLs because of how competitive the market is for consumer goods.
In retail, customer satisfaction is king. The right shopping experience makes a big difference in customer gain and retention strategies.
A quality 3PL can provide services that make your business:
The demands of retail mean your logistics and supply chain management need to be run by experts. This frees up management and executive teams to focus on growing the actual business and finding new markets.
As we take a closer look at retail 3PL solutions, we'll explore three key areas where they provide significant benefits.
These areas include:
When you see the value 3PL solutions offer in these areas, the decision to change how you fulfill and distribute orders gets much easier.
The main goal behind many 3PLs is to manage inventory for retailers. They track stock levels and make sure goods are available when ordered online.
Retailers shouldn’t be worrying about inventory. As a business owner, you should be focused on sales. The technology used by 3PL services can automate many of the functions needed to keep your inventory on track.
Inventory management technology can handle things such as:
Once a 3PL company becomes more familiar with your company products and offers, they can do even more. With more data, a 3PL can even make recommendations for kitting and product bundles.
Without a 3PL, all these things would need to be tracked in-house and take valuable time away from things such as marketing and customer service needs.
3PLs can handle the entirety of the order fulfillment process. From the moment an order comes in to when the product is shipped to the customer, your logistics are taken care of. Just like it does with inventory management, 3PL companies make this process more efficient and free up valuable time.
You get a fulfillment services partner that can take over:
With these processes automated, you grow other aspects of the company that may be getting neglected. A 3PL gives you the chance to grow and streamline your operations to the point where you can step back and actually enjoy the results of your hard work.
Outsourcing does come with a price. However, it has proven itself to be the more cost-efficient over greater periods of time compared to handling everything in-house.
3PL providers leverage their shipping volume and relationships with carriers to negotiate better rates for retailers. As a large scale logistics service, carriers know they can rely on them for steady work.
Relationships between 3PLs and carriers provide:
Cost-effective solutions give you the freedom to grow your business without fear. The company gains stability for growth and customers benefit from a variety of shipping options.
The key structures of 3PL retail logistics are order fulfillment, inventory management, and shipping services. These are the same solutions we’ve already reviewed.
Combined, these structures provide benefit to other areas as well.
For a business or a brand to really take off, you need loyal customers and the ability to keep up with rising demands. Getting started with a 3PL for retailers and their needs is a major part of getting that to happen.
Customer satisfaction can bring in success or drive it away completely. High standards set by major online retailers mean that today’s customers expect more than ever before from both online and in-store retailers.
The most demanded services include:
When you work with a 3PL with the right tools and technology, it makes meeting those demands much easier.
Retailers can partner with companies providing:
The moment of fulfillment is when customers have the most meaningful interaction with your business outside of enjoying an actual product. If you offer less than the best, it’s going to be noticed.
Instead, choose a 3PL solution like Fulfillment and Distribution. We offer tracking and visibility that helps retailers and customers to monitor shipments. The right services and support will drive up customer satisfaction and keep them coming back.
For many retailers, scalability is a complex issue. As a business grows, it faces multiple challenges.
These challenges can strain resources, lead to inefficient operations, and block growth opportunities. This is where a 3PL becomes your business’ most valuable player.
They offer solutions tailored to these scalability challenges:
These solutions help retailers avoid some of the bigger expenses that come with expanding a business. Warehouse space is one, but more space doesn’t do a company any good unless there is a staff and equipment to run it.
In contrast, a 3PL has that from the start. You pay for the whole package instead of having to itemize all the expenses out yourself. This is something that businesses of all sizes are using to expand.
|Fortune 500 companies relying on 3PL services||90%|
|Clients reporting a positive relationship with a 3PL provider||91%|
|3PLs reporting improved profitability in 2022||79%|
|Global revenue for 3PLs in 2020||$961.8 billion|
|Expected annual 3PL revenue by 2028||$1.90 trillion|
With 3PLs able to easily handle increased order volumes and new sales channels, their popularity continues to grow.
The numbers above are proof that both 3PL providers and their clients are enjoying the benefits of a mutual relationship. By using a 3PL, retailers focus on growing their business while logistics tasks are expertly managed.
Picking the right 3PL makes a difference, and it’s a critical decision for any retailer. Who you choose can affect your operations, customer satisfaction, and even the growth of your business. The right partner will align with your business goals, understand your specific needs, and have the ability to grow with you.
In the next sections, we’ll go over:
The goal is to make an informed decision at the start and have standards set up early to track your success.
It's not just about finding the lowest price for the services you want. You'll want to consider the 3PL's experience, technology, scalability, and customer service.
Ask yourself some of the following questions as you’re comparing possible partnerships.
Some products require very specific storage and handling needs. Take cosmetics as an example. Improper packing and shipping can easily result in damaged goods and customer complaints. Other areas, like home appliance, might need workers capable of doing home setups and basic installation.
In both cases, the clients you have worked so hard to attract could be turned away because of a bad choice of partner. Even if you can’t find a 3PL provider that works in your industry specifically, look for one open to having their employees undergo the training necessary to handle your retail merchandise the right way.
Looking into associations like the International Warehouse and Logistics Association (IWLA) can show you best practices within the industry. The IWLA even has links to various government agencies that might regulate the products you need a 3PL to work with.
Once you've selected a 3PL, how do you measure their performance? Key metrics could include on-time delivery rates, order accuracy, and response time to issues. You want to set this up early on so if there is an issue, you catch on before they become major problems.
Here's how you can set up an evaluation plan:
1. Establish Clear Expectations:
Right from the start, define your expectations. This includes everything from delivery timetables to issue resolution. Make sure these expectations are agreed upon and understood by both parties.
2. Set Key Performance Indicators (KPIs):
KPIs are a set of measurable values you can track to see how well your company is meeting business objectives. For a 3PL, KPIs might include:
3. Regular Performance Reviews:
Schedule regular reviews that line up with your own finance reviews to evaluate the 3PL's performance against the agreed-upon KPIs. Keep communication open from the start. It will make things easier when discussing any issues, challenges, or opportunities for improvement.
4. Feedback and Improvement:
Like any business, a 3PL thrives on feedback. If the 3PL is consistently meeting or exceeding KPIs, let them know. If they're falling short, give them a chance to recover by coming up with a performance improvement plan.
5. Re-Evaluation and Decision-Making:
If feedback and improvement plans aren’t helping the 3PL's performance, it may be time to find an alternative. Remember, the goal of this partnership is to enhance your operations and customer satisfaction. When that isn’t possible, you need to do what you need to protect your company’s future.
If you’re currently working with a 3PL and struggling with poor performance, get in touch with the experts at Fulfillment and Distribution. We’ve been providing a variety of services for decades and have built up an amazing network of service providers for all kinds of industries.
Changing 3PL providers is tough. We can make it easier while providing you with even more ways to grow and expand.
Transitioning to a 3PL service may seem daunting, but with the right partner, it's a smooth and beneficial process. That's where Fulfillment and Distribution comes in. We offer 3PL solutions for retailers designed to support their operations and future goals.
Benefit from a variety of services:
Every retailer has unique needs, and we're here to provide a solution that fits perfectly with your business. Whether you're a small business looking for a little extra help with fulfillment, or a larger retailer aiming to streamline your operations, Fulfillment and Distribution has a solution for you.
We're confident in our approach to 3PL services, and that's why we're offering a risk-free quote. Let's discuss your needs and how we can help enhance your operations. Complete a quote request form or call us now at (866) 989-3082.