Plenty of myths and misconceptions exist about working with 3PLs.
PICK A PART INVENTORY DRIVERS
Freight forwarders are different from 3PLs in that they’re specifically dedicated to matching up brands with drivers or carriers. Their team negotiates the contract with a partner, resolves any issues, and communicates between your internal team and the distributor.įreight brokers: Act as intermediaries between brands and drivers. So, what’s the difference between a freight forwarder, 2PL, 3PL, and 4PL?ĢPL: Couriers collect parcels from your warehouse and deliver them to an end customer.ģPL: Inventory is stored, picked, packed, and shipped by a third-party company.ĤPL: Providers manage the fulfillment partners (3PLs) you’re working with.
A warehouse team member gets a picking list to collect the items that have been ordered.
PICK A PART INVENTORY SOFTWARE
When an order is placed on your ecommerce site, it’s either manually forwarded to the 3PL or automatically pushed (if its software integrates with your online store).The 3PL receives your inventory at its warehouse and organizes each SKU.While the 3PL fulfillment process can vary depending on the provider and services you’ve agreed on, the typical process looks like this: In the same report, 37% of merchants indicated that they planned to hire or change 3PL fulfillment providers in the coming year. Shaun Broughton, Managing Director of Asia Pacific for Shopify, said in Shopify’s 2022 Future of Commerce report. “Supply chains are not the sexiest part of retail, but it’s probably the most important part that companies need to invest in,” Supply chain disruptions are happening with increasing severity and frequency, with experts reporting significant disruptions now occur every 3.7 years. Unfortunately, the acts of political instability, natural disasters, human resources shortages, and regulatory challenges that we’ve seen in the past two years aren’t an exception to the rule. That gives ecommerce merchants the capacity to do what they do best: develop, market, and sell products.įor many successful ecommerce businesses, 3PLs have been-and will continue to be-the secret ingredient that have allowed them to weather the recent supply chain crisis. Because the process is simple and seamless with a 3PL, customers never think twice about the handoff between received orders and fulfillment. When a customer places an order online, items are then automatically shipped from the 3PL’s warehouse. Instead of managing your own warehouses and doing distribution in-house, you can store your stock in a 3PL vendor’s warehouse, with the stock shipped directly from your manufacturers. Partnering with a 3PL ultimately allows a merchant to focus on other aspects of their business. Common 3PL services include warehouse and inventory management, order fulfillment, shipping coordination, retail distribution, exchanges, and returns.
If you’re ready to partner with a 3PL for the first time or considering multiple 3PL partners to diversify and mitigate risk, here’s what you need to know to find and select the right vendor.Ī 3PL (Third-Party Logistics) is a partner or service that helps ecommerce merchants manage their supply chain. These shipping and fulfillment experts house your inventory in their warehouses, and pick, pack, and ship products to your customers. There’s a reason the services of 3PLs are in high demand. As the ecommerce market has grown exponentially, so too has the 3PL market, which is forecast to reach $1.75 trillion by 2026. That’s why 90% of Fortune 500 companies turn to third-party logistics (3PL) providers to help. It’s difficult to focus on marketing, product development and relationship building when you’re devoting all your time to negotiating shipping contracts or putting out fires. If you’re in the process of scaling your ecommerce business, you probably already know this to be true, particularly when it comes to logistics, shipping, and fulfillment. Growth may come with opportunity, but it also invariably comes with growing pains.
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