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What Is 3PL And How Does 3PL Work_Featured

What is 3PL and How Does 3PL Work?

Is your ecommerce business growing? If so, you likely know that order fulfillment is an essential part of your operations. As your business ...
Laura Isaacs
October 21, 2019

Is your ecommerce business growing? If so, you likely know that order fulfillment is an essential part of your operations. As your business increases and more orders start coming in, you might find that in-house fulfillment is no longer feasible. When this happens, you might consider outsourcing your fulfillment practice to a third-party logistics (3PL) partner. 

What is 3PL and How does 3PL work? 3PL fulfillment services refer to outsourcing the legwork associated with fulfillment and logistics services. This might include:

  • Pick and pack fulfillment
  • Kitting and assembly
  • Reverse fulfillment and reverse logistics
  • Retail inventory management
  • Packing and shipping of orders

What is 3PL?What Is 3PL

Third party logistics or 3PL refers to outsourced logistics services. Logistics services like pick and pack, managing inventory and shipping orders. Your 3PL partner can take care of logistics services that might be unproductive or costly to perform in-house. In many cases, taking advantage of 3PL services can some with a cost savings. 

When it comes to 3PL fulfillment, logistics companies offer a wide array of services. In fact, third-party logistics services run the gamut of the supply chain. 3PL fulfillment services can include things like:

  • Distribution
  • Shipping and receiving
  • Transportation
  • Warehousing and warehouse management

When working with a 3PL partner, you’ll want comprehensive services. R+L Global Logistics offers partners comprehensive third party logistics services. This means that R+L Global’s 3PL services blend seamlessly. This creates inclusive services to handle your business’s fulfillment needs.

How Does 3PL Work?How Does 3PL Work

3PL warehouse services are often compared to 4PL, or fourth party logistics. 4PL services add an extra degree of separation between your business and your logistics partner. Businesses can contract with a 4PL to obtain 3PL services. The 4PL partner manages the relationship with the 3PL partner. This practice is also known as “double brokering.” 4PL services offer robust services, including management of the supply chain process, manufacturing, assembly and more. This lets you focus more on customer service and your bottom line.

Third party logistics services are important because they keep you competitive in the marketplace. The packaging and shipping of products can be expensive and difficult. With ecommerce giants like Amazon and Zappos reigning the marketplace with 1 and 2-day shipping, fast-acting 3PL partners are even more important. Third party logistics partners specialize in supply chain management, which can help your business optimize the fulfillment, distribution and shipping processes for efficiency and cost effectiveness. 

What is the 3PL Order Fulfillment Process?

If you are considered working with a 3PL partner for fulfillment, you likely have any questions. Third-party logistics doesn’t have to be a mystery, as the 3PL order fulfillment process can be quite simple. 
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Receiving

The fulfillment process begins as before a consumer clicks “order” at your ecommerce store. Before a 3PL partner can ship out the order to the customer, they need inventory at their warehouse. This is called receiving. This is the acceptance of inventory into a warehouse or fulfillment center for storage. The products are entered into a warehouse management software for visibility. Each SKU you are storing as a separate area in the warehouse. Items might be stored in a bin, on a shelf, or on a pallet. It is important that you work with a 3PL partner like R+L Global, with lots of storage space at strategic locations for your business and customers. Third-party logistics partners should be able to scale with you as your business grows. 

Picking

The picking process starts soon after your ecommerce customer clicks “submit order.” R+L Global takes advantage of a sophisticated warehouse management system that can plug into your ecommerce interface so you’ll the picking process can begin immediately. With this software tool, you’ll also have instant access to shipments, inventory levels and other information to keep processes streamlined. 

When your order is pushed to your 3PL partner, the picking process takes place. This is the process of physically finding your item in the warehouse and preparing it for the next step in the fulfillment process.

Packing

When the items in the order have been picked, it’s time to start packing. This will prepare your customer’s products for shipping. Packing materials like boxes, bubble mailers, packing tape, poly bags and bubble wrap are the tools of the trade. You might find that some 3PLs charge for these packing materials as an additional line item. Others include material costs in service costs.  Sometimes picking and packing are combined. When combined, they are pick and pack fulfillment services.

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Shipping

After your order is packed, it’s time for shipment. Your 3PL partner will print shipping labels on your behalf. Some partners use preferred carriers for shipping your products, others network with a variety of shippers to get you the best price. 

The chosen carrier will pick up the product from the warehouse. Speed of shipping depends on what is offered by your business. 

After the item is shipped, warehouse management software can push tracking information into your ecommerce or business enterprise system using shipping API. This means businesses and customers can easily track orders as they travel on their shipping journey.

Returns and Reverse Logistics

Customer returns happen. This process of returning items to the warehouse is called reverse logistics. Once a product is returned by the customer, it could be returned to inventory, refurbished, recycled or disposed of. Every ecommerce business should have a reverse logistics strategy in place.

Your 3PL partner can include shipping labels with each order to ensure returns make it back to the proper warehouse. This can be convenient for businesses, as they won’t have to handle returns in house. Additionally, customers can also track the status of their return as it moves through the reverse logistics process.

Other 3PL Partner Services

The fulfillment process is just part of what an established 3PL partner like R+L Global Logistics can do for you. Other 3PL partner services include:

  • Inventory management: Keeping track of inventory involves much more than storing products. Standards in supply chain visibility ensure that your 3PL partner can easily sync their warehouse management software to provide real-time inventory information. Your 3PL partner can strategically order more inventory and push out-of-stock notifications so your customers always know what is available to them.
  • Distributing inventory: When working with a robust 3PL partner like R+L Global Logistics, you can take advantage of our vast network of warehouses and fulfillment centers. This means inventory can be stocked at strategic locations around the country. This network of warehouses makes it easy to get your customers their orders quickly. 
  • Kitting and assembly: Does your ecommerce business deal with products like subscription boxes, customized gift sets or other pieced products? A 3PL partner can assemble each kit to make sure the customer gets the whole item.
  • Transload/Cross docking: Are your products on the move? Services like transload and cross-docking can move your products from fulfillment center to distribution without even touching the ground. 

When to Choose a 3PL Partner for Your BusinessWhen To Choose A 3PL Partner For Your Business

Most ecommerce businesses can benefit from working with a 3PL fulfillment partner. Regardless of your industry, product or platform, outsourcing logistics services can be a wise move. Here are a few situations in which outsourcing logistics to a 3PL partner might be a wise move:

  • You need more space to store inventory: As your order volume goes up, you’ll need more space to store your inventory. A business that might have started in your garage or a storage space needs to expand to a warehouse when orders meet a certain threshold. Additionally, outsourcing to a 3PL can help you manage inventory levels and stay organized more efficiently. You can focus on growing your business and scaling your products without worrying about the legwork and logistics of storing items.
  • You’re shipping a high volume of orders per month: Once your order volume reaches 100 orders a month, it might be time to outsource shipping and logistics. Performing low-value tasks like kitting, assembly and preparing items for shipping can eat away at your bottom line. Doing these activities yourself can also hold back growth.
  • You want to speed up shipping: Amazon offers two-day shipping to Prime customers. This has set the bar for other ecommerce companies to provide quick shipping. If you’re still fulfilling orders yourself, this can be a difficult task. Leaving fulfillment to a 3PL partner can help you speed up the order fulfillment process, allowing your business to stay competitive in the world of quick deliveries.

Third Party Logistics BenefitsThird Party Logistics Benefits

You’ll find a number of reasons why outsourcing to a 3PL partner could be wise for your fulfillment practices. While different 3PL companies have different fulfillment offerings, you’ll find that working with a partner like R+L Global Logistics offers the solutions you need. From managing inventory, packing and shipping to other logistics services, R+L Global has the reliable logistics services you need.
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Benefits of working with a 3PL like R+L Global Logistics include:

  • Save money and time: When you invest in 3PL services, you no longer need to invest in warehouse space, transportation, warehouse technology and distribution and fulfillment labor. You might find that as your business grows, in-house fulfillment becomes more expensive. Outsourcing fulfillment to a 3PL can help you save time and money. It gives you time to focus on growing your business and other essential practices, like sourcing new products and marketing. 
  • Expand your business reach: Working with a 3PL partner can help your business expand the reach of your business. R+L Global Logistics has a network of fulfillment centers across the country. This can help reduce the transit time of you products and help lower the cost of shipping items. 
  • Industry expertise: R+L Global Logistics' fulfillment and distribution team brings years of industry experience to the table. By working with R+L Global as a 3PL partner, you have instant access to their knowledge about industry trends and complexities. This allows you to leave the logistics to the professionals while you focus on growing your business.

If your ecommerce company has experienced or is poised to experience rapid growth, it might be time to consider working with a 3PL partner to lead logistics efforts. In many cases, 3PL partners are used with an ecommerce company seeks to scale their business in a way that facilitates growth. 

Getting a 3PL Price Quote

When you decide you’re ready to work with a 3PL partner on distribution and fulfillment, there are a few price considerations to take into account. Price shouldn’t be the deciding factor of your choice in 3PL partners, as reduction in errors and quick delivery are priceless to your business. 

Costs for 3PL fulfillment services can include:

  • Transportation costs: This includes the cost of getting your products from the manufacturer or wholesaler to your warehouse or fulfillment center. 
  • Receiving costs: Sometimes 3PL partners charge for offloading products into the warehouse.
  • Warehousing fees: Warehouses charge a fee for storage, often based on the amount of room your items take up in the warehouse. This might be a per pallet fee.
  • Pick and pack fees: Your 3PL partner will likely charge a fee for picking and packing your items. The cost of this price might go down per unit based on the number of units you move a month.
  • Shipping costs: Even though delivery might be free for customers, someone has to pay for it. The shipping costs your fulfillment partner charges you will move your package from the warehouse to the customer. Many 3PL partners can offer low shipping rates because they ship in a large scale. 
  • Account set up fees: Warehouse and fulfillment partners use advanced software to help you manage your inventory. There might be a fee to integrate into these systems.
  • Minimums: Your 3PL partner might charge a minimum for services, even if your business has a slow month.

Taking Advantage of 3PL PartnershipsTaking Advantage Of 3PL Partnerships

There are many reasons to take advantage of a 3PL partnership for fulfillment and distribution. Before creating a partnership, though, it is wise to do your research. You likely won’t be able to tell if a 3PL partner is a good fit for your business just by combing their website. 

Choosing the wrong 3PL partner comes with a headache. Not only could your business have to deal with unfilled orders or slow services, but you might also have to deal with upset customers. Poor service from a 3PL partner could lead to declining sales - not something you’d like to happen when you’re trying to scale a business. 

When you get it right with a 3PL partner, the ball is in your court. Orders will be fulfilled quickly, you’ll always know how much inventory is on hand, and customers will be wowed with service.

Working with R+L Global Logistics

So, how does 3PL work? Now that you understand more about how 3PL fulfillment works and what it takes to choose a partner, it’s time to get down to business with R+L Global Logistics. R+L Global Logistics is prepared to be your best bet in 3PL partners. 

Things to think about when selecting R+L Global Logistics for your 3PL fulfillment and distribution needs include:

  • Vast warehouse network: R+L Global Logistics has warehouses located strategically across the country on the east coast, west coast, and all throughout the U.S. to meet your needs.
  • Pricing: You’ll find that R+L Global Logsitics offers competitive pricing for fulfillment and distribution services.  Additionally, you’ll transparency and predictability in R+L Global’s pricing. All fees are outlined upfront, without hidden or surprise charges.
  • Shipping carrier rates: R+L Global Logistics can negotiate shipping carrier rates to make sure you’re getting the best price on shipping. 
  • Insurance: Do you need insurance coverage on your products while they are in storage or en route to their final destination? R+L Global has your back by offering the coverage you need. 
  • Customer service: R+L Global Logistics prides itself on offering top-notch service to 3PL warehouse, fulfillment and distribution customers. You can always chat with a live agent on your terms.
  • Management system tools: R+L Global Logistics offers state of the art e-commerce order management and fulfillment software. This makes fulfilling orders simple and hassle-free.

R+L Global Logistics offers scalable 3PL warehouse, fulfillment and distribution services to meet your growing business needs. needs. Regardless of whether you are an e-commerce business, retailer, distributor or even a manufacturer, you need a 3PL partner with experience in supply chain management. Call, chat or e-mail today to get started with R+L Global Logistics’ 3PL services.
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