Outsourcing fulfillment services are a common solution for businesses overwhelmed by their current responsibilities. When a business outsources their fulfillment operations, they’re handing certain operations over to a third-party (3PL) to handle. In some cases, the 3PL will take full control of these operations, while in others, it will only have partial control.
By outsourcing your fulfillment operations, you can improve certain facets of your business. Ways that outsourcing can benefit your business include:
While its benefits may seem appealing, there are many aspects of outsourcing fulfillment that you need to consider before you decide to utilize it.
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Businesses tend to handle their fulfillment services themselves. However, sometimes, they will outsource this responsibility by hiring a fulfillment company to take care of this responsibility.
Businesses can either hand over all of their fulfillment operations to a 3PL or continue to run certain operations while outsourcing the rest. It all comes down to the individual needs of the business itself.
Sometimes it’s not always obvious when you should hire a 3PL fulfillment provider to take over some or all of your fulfillment operations. Before hiring a 3PL, take a look at the following problems below.
One sign that indicates when you should outsource your fulfillment operations is when you can no longer keep up with the order volume you have. Whether your warehouse is running out of space or you can’t ship orders out consistently, having a third-party take over at least some of your fulfillment operations is a good idea.
Many accidents could occur during the shipping process that could cause a customer to return their goods to your warehouse. Some of these reasons can include:
These scenarios are sometimes hard to avoid but are a reality of the transportation industry. However, if you notice that the amount of returned packages that don’t meet customer expectations is increasing, then you might need the help of a 3PL fulfillment company.
Processing returns in your inventory management system and then resending the order can take time. The more returns you have, the more backed up your warehouse will become.
Having a fulfillment partner can reduce this stress for you. By letting a third party take over your fulfillment operations, you can catch up on correcting your returned orders. Your outsourced 3PL partner can even help correct some of your returned orders for you.
The order fulfillment process can take a toll on your staff working within your warehouse. The busier your warehouse, the more workers you will need in your fulfillment center.
If the orders you have outmatch your warehouse team, not only will your warehouse become bogged down, but your workers will become fatigued from all the excess order volume they have to keep up with.
Instead of hiring more workers to expand your team, you could take the cheaper option of hiring a third-party fulfillment company. That way, all of the excess work is handled by your fulfillment partner and your team will only have to worry about the volume they can handle.
Every business owner wants to grow their company as much as they can. However, the more successful your business becomes, the busier your fulfillment operations will be. This is normal for any growing business but if you find that you’re spending more time worrying about things like managing inventory levels than your business’ next steps, then it might be time to consider getting some help.
There are many facets to focus on when you run your own business. Putting your focus only on your fulfillment operations will cause other areas of your business operations to suffer. Having a partner will make managing your fulfillment operations easier and will give you more time to focus on other responsibilities.
Fill out your quote with R+L Global Logistics today so you can get back to focus on running other areas of your business.
If you're having any of the problems above, outsourcing order fulfillment can be a great solution. In addition to being a solution to your fulfillment operations, there are numerous ways that outsourcing fulfillment operations to a 3PL will help your business thrive
Shipping rates give many shoppers the impression that they’re set and cannot be changed. Fortunately, that’s not the case when you use the order fulfillment services of a third-party.
Most third-party fulfillment companies have warehouses all over the country and even some overseas. Because they have so many different warehouse locations, they’re able to offer better pricing for shipping.
The rate can vary by the fulfillment company that you’ve partnered with. That said, you can expect to save anywhere between 15 and 35 percent on shipping when you choose a fulfillment provider.
Growing your business means reaching as many customers as you possibly can. If you need help reaching a larger pool of customers, then outsourcing your fulfillment operations to another company can help.
Since 3PLs have warehouses in different states and even in other countries, it’s as easy as ever to reach more customers. Many fulfillment companies that have warehouses in a variety of different locations, allowing you further reach than ever before.
If you want to spread your company’s reach, R+L Global Logistics can help. You can take advantage of our fulfillment and distribution services nationwide.
Customers may have questions regarding the details of their orders. When your business is already struggling with fulfillment operations, there’s a good chance you won’t be able to provide the necessary help needed by customers.
Fulfillment companies can help with this problem because they provide service to customers throughout the week and at any time during the day. Some of the ways the customer service team of a 3PL can help your customers out are:
Another expectation that many customers have is for their goods to arrive promptly and on time. Fulfillment providers have the logistical capacity to do just that. In addition to on-time orders, customers also expect retailers to offer other options like
Providing all of these services can be overwhelming for a business to do all on its own. A 3PL can take care of these responsibilities for you so you can keep happy customers returning to your store.
Third-party fulfillment companies are experts at what they do. Their expertise will likely outrank yours in the realm of fulfillment operations. On top of their experience, your 3PL provider will also provide services for other retailers and businesses besides yours.
Given their experience and ability to provide services for other businesses, you can trust most 3PLs to complete all the responsibilities that you entrust to them. In addition to their experience, fulfillment companies also have the most relevant inventory management systems.
These systems help fulfillment companies keep track of items within the warehouse. When it’s time to ship the products, the 3PL can easily consult their inventory management system to locate them and prepare the products for shipment.
Many 3PLs employ strategic warehousing techniques to stay on top of all the inventory and orders they deal with daily. The techniques vary but they all help warehouses function at pique efficiency.
Our article discussing the benefits of outsourcing inventory management will provide you with additional information that will show you why outsourcing can be a good idea.
Outsourcing your fulfillment operations does have some advantages. Before you outsource, however, there are aspects of outsourcing fulfillment that you should know before you hire a 3PL.
One thing that you should be aware of when you outsource your fulfillment operations to a third-party is that you likely won’t have the same level of control over your shipments anymore. While letting someone else handle your fulfilling orders for you might be appealing, it may create some anxiety for some businesses.
3PL providers have their standards when it comes to running their warehouse. This includes how they:
The ways that a 3PL handles freight might not be a good fit for the type of products your business is selling. Certain products might need to receive specialized treatment that a third-party provider doesn’t allow.
Certain 3PL fulfillment providers won’t accept items that are perishable or are hazmat. You also won’t be able to customize your orders with packaging or personalized notes for the customer.
Since you won't have much control over how a third-party fulfillment partner operates their warehouse, you will need to determine the needs of your goods and business. When you’ve determined what preferential treatment your products need, you can start searching for a 3PL that will best serve you.
There are two types of 3PL fulfillment companies that you can choose from. The first is the general-purpose 3PL which takes care of products that do not require special treatment. Since these providers don't offer specialized services, you can expect them to be cheaper.
The second type of 3PL provider is called a niche-specific provider. This particular 3PL can be divided into three subcategories which are:
Each of these different providers will cater to the unique needs of your products. Regardless of which one you need, you can trust that there is a 3PL fulfillment provider for a variety of different industries.
Another thing that you should consider is if you have the order volume to justify hiring a 3PL. Products that belong in a small niche or items that don’t generally sell often will result in low order volume. The table below reflects some of the fees that 3PL fulfillment companies have.
|Fee Type||Fee Charge|
|Receiving/Intake Fees||Hourly Rates: $20-50Per-Unit Rates: $5-25|
|Storing Fees||By Pallet: $5-15By Cubic Foot: $.30-$.55By Individual Bin: $1-2.50|
When you have a low order volume, there’s no real reason to outsource your fulfillment operations. Since you won’t be making the profits to cover the costs of a third-party fulfillment provider, you would only be wasting your money by hiring one.
If your warehouse can’t keep up with orders because your warehouse is completely disorganized and not because you have too many orders, then you should seek out a better inventory management system.
The point of hiring a 3PL is to make running your business easier and not harder. Before meeting with a 3PL and asking them questions about their capabilities, there are some universal characteristics that you should look for.
When you start researching a provider, don’t let first impressions like their appearance be the only thing that you judge them on. Taking a deep dive into their services to find out what they offer is a much better way to determine what you can expect if you were to hire them. Some services, like cross docking, are essential to have.
Another way you can determine whether a 3PL fulfillment provider is a good partner to do business with is if they have a good reputation. You can find out what kind of reputation the 3PL has by looking into things like:
Lastly, an experienced 3PL provider usually makes for a reliable partner. This doesn’t mean that you need to work with a fulfillment company that has three to four decades of experience. A partner with five to 10 years is a safer bet.
R+L Global Logistics is one such 3PL that does have many years of experience that you can count on.
The financial stability of a 3PL fulfillment provider is an important but sometimes overlooked part of the vetting process. If you hire a fulfillment company only for them to go out of business at some point in your relationship with them you’ll have a real mess on your hands.
Some ways you can determine if a fulfillment company is stable is if they have new clients and repeat customers. Looking into a company’s financial plan will give you a good indicator as to how they prepare and handle disasters as they come up. Checking the cash balance of the company is useful as well.
The transportation industry can be affected by various outside factors. Disasters can be anything from extreme weather phenomena to labor shortages. You need to know that when things get rough your 3PL fulfillment partner will still be able to perform.
When you hire a fulfillment company to take over some or all of your fulfillment responsibilities, you’re handing them over an important part of your business. Therefore, you deserve a partner who will always stay in touch with you regarding the order fulfillment services they perform on your behalf.
Any information that a customer expects to have is information that you should expect to have and more. Your 3PL partner should be able to always have the following information on standby:
Good communication between a 3PL fulfillment company and the business they’ve partnered with will help foster a long-term relationship.
When you choose R+L Global Logistics as your 3PL fulfillment provider, we’ll assign you a customer service representative that will be able to provide you with any information you need promptly.
Before you move on to interviewing the 3PL fulfillment provider you should schedule a walk-through of one of their warehouse facilities. Conducting your research is effective and shouldn’t be neglected.
However, seeing how the 3PL conducts its warehouse operations firsthand will be very revealing. Going on a walk-through of a 3PLs warehouse will show you things that you wouldn’t have learned from your research.
You could spot potential problems that might be concerning. Likewise, you can just as easily discover that the research you’ve done on the 3PL lines up perfectly with what you’re seeing in their warehouse operations.
Once you’ve concluded that you need the assistance of a 3PL and have found the one you want to approach, you should prepare some questions that you will want to ask. Getting to know your 3PL and how they operate will help you determine if they’re the right fit for you.
The first thing that you should know about your 3PL when you’re interviewing them is if they have the space to take on some or all of your order volume. Knowing how many square feet their warehouses have isn’t a good enough indicator as to whether or not you should hire them.
When you ask them if they can take on your order volume, be sure to listen to any details they provide about how they handle the order volume of other retailers and businesses.
Knowing that a 3PL fulfillment provider has enough workers to take on new business is just as important as knowing they have the space to do the same. The last thing you want when you hire another company to take on your fulfillment responsibilities is to work with a partner that’s overwhelmed by the order volume they already have.
A 3PL fulfillment company would not be able to operate without the assistance of an inventory management system. This technology is what allows the 3PL to store, retrieve and load orders for shipment quickly.
You need to have the assurance that their system will work efficiently for you. That way, you’ll know that your orders will arrive at customers promptly. Additionally, a good inventory management system will give a 3PL the ability to update you with current information regarding your fulfillment orders.
A 3PL provider needs to know about your business as much as you need to know about theirs. They need to know aspects about your order volume and what type of products you have that they’ll be responsible for handling.
Some other questions they might ask about your business can include things like:
If a 3PL starts asking questions like these, that's a good sign that they’re serious about getting to know you and taking on fulfillment responsibilities for your business. The more they know about your business, the more they will be able to answer questions you ask about their capabilities as well.
Before meeting with a 3PL fulfillment company, make sure you’re prepared to answer questions about your business operations.
At R+L Global Logistics we provide all of the fulfillment services that you could need. The services that we can offer you with are:
Our distribution services reach all across the country from as far West as Los Angeles to as far East as Miami. With our array of services and country-wide distribution, you can trust that your customers will always be satisfied when you have us as your 3PL provider.
Start your relationship with a 3PL fulfillment company you can trust by filling out your quote. If you have any questions, then click the “contact” button on top of the screen to speak to a member of our team.