What is 3PL Fulffillment – The Ultimate Breakdown

Are you interested to once and for all learn what is 3PL Fulfillment and clarify all the unanswered questions?

Then this article is a must read.

Keep on reading to find out all the questions around what is 3PL Fulfillment!

Superior ecommerce fulfillment services are a necessary component for successful ecommerce companies. While logistics and the back end of things may not be as glamourous as your marketing and branding, it is still an essential feature of your companies’ success.  

Great 3PL partners help make your ecommerce fulfillment a breeze by handling all order fulfillment services, providing inventory management, as well as a good shopping experience for your customers. This guide will inform you of everything you need to know when it comes to 3PL ecommerce fulfillment.

What is 3PL?

First, let’s breakdown the term ‘3PL.’ 3PL is an abbreviation for third-party logistics, which is the outsourcing of logistics for your company from warehousing and storing your products, to fulfillment, distribution and delivery.

‘3PL ecommerce fulfillment’ is basically allowing your fulfillment partner to handle all of your fulfillment needs pertaining to your ecommerce orders.

What’s the meaning of Third-Party Logistics Fulfillment?

3PL Fulfillment is a form of outsourcing that allows businesses of all sizes to focus on their core competencies while leaving the logistics functions to a specialized provider.

3PL providers offer a range of logistics services, including transportation, warehousing, cross-docking, inventory management, and order fulfillment. These providers are responsible for managing the movement of goods from one location to another, ensuring that products are stored safely, and making sure that your orders are fulfilled in a timely manner.

3PL Basics – How do you know when it’s time to outsource eCommerce fulfillment?

When you realize you no longer have the time or resources to fulfill orders on your own, its time to contact a top fulfillment company to outsource these tasks. At first glance, it could seem like a celebratory moment of victory that your company is growing at such a pace that you now have more orders than you can handle alone. However, that moment of victory can quickly turn into a moment of overwhelming chaos if orders are extremely slow getting to your customers.

An experienced 3PL partner will save you time and money while maintaining the entire fulfillment process with advanced order management technology. 3PLs prevent you from needing a warehouse to fulfill and ship your own products or hire any employees to help you do so. You will be able to free up space in your home or garage because your inventory will now be stored in a safe, secure warehousing facility. Your 3PL partner should have special order management and automation systems in place to optimize inventory from beginning to end.

At Fulfyld, we make order fulfillment easy. Its our job to handle the entire logistics process so that your supply chain can move as seamless as possible, and you can focus on other aspects of your business like building your brand.

7. Advantages of 3PL

There’s an immeasurable amount of advantages of 3PL. A reliable fulfillment services provider will be able to provide your company with these benefits:

1. Flexibility and scalability

A great 3PL partner will have an ample amount of space for your inventory and the ability to scale seamlessly as you grow.  

2. Free up time to focus more on building your brand

Outsourcing your order fulfillment gives you more time to focus on other tasks like marketing, advertising and building your brand.

3. Experience and insight of your 3PL partners

Your fulfillment partner should be able to provide specific insights and suggestions that ultimately help create the best experience for your customers based on analytics and reports. As experts at e-commerce fulfillment, Fulfyld provides distinct insights and strategies needed for success.

4. No warehouse lease, hiring of employees, etc.

One of the greatest benefits of outsourcing fulfillment is the fact that you don’t have any responsibilities as it pertains to a lease or mortgage on a commercial building, nor will you have to worry about hiring any employees to fulfill your orders. As part of your fulfillment services, warehouse storage and experienced professionals who specialize in order fulfillment are included.

At Fulfyld, our knowledgeable warehouse team is highly skilled at order fulfillment and warehouse management.

5. World-class infrastructure and technology

It is vital that your 3PL partner has optimal infrastructure and robust technology to ensure your order fulfillment process runs as smoothly as possible. You should be able to leverage their company’s systems, which will help you control your inventory and stay informed with real-time updates about your orders.  

6. Dedicated logistics manager

While automated systems are definitely necessary, good old-fashioned humanity is still essential as well. Having an account manager that is dedicated to providing any support you may need is a great advantage to outsourcing your order fulfillment.

7. Reduced shipping costs

By leveraging the 3PL providers’ distribution network, you are able to get cheaper freight rates and reduced shipping costs.

The Process of 3PL

For people who are more technical, here’s how the ideal 3PL process should look like

graph LR
A[Company] -- Outsources to --> B[3PL Provider]
B --> C[Transportation]
B --> D[Warehousing]
B --> E[Cross-docking]
B --> F[Inventory Management]
B --> G[Order Fulfillment]

Important factors to consider when choosing a 3PL

While there’s no “one-size fits all” 3PL, there are several factors that are “must-haves” when choosing an order fulfillment partner so that you can select the company that’s best for you. A great 3PL should be able to provide several resources to your company ranging from storage, ecommerce fulfillment, customer service and branding, to expertise in logistics and robust technology.  Settling for a fulfillment provider that is missing one of these determinants may ultimately cause a disservice to your customers in the long run.

At Fulfyld, we offer fulfillment services for every step of the supply chain, so you can rest assured your order fulfillment is in good hands. Be sure that when you choose a 3PL, you can mark off each of these factors off as something they offer: 

Centralized location

Your 3PL should be centrally located in an area that allows your products to reach your customers in two days or less.

Fulfyld offers same-day order fulfillment and guaranteed two-day shipping services so that your customers never have to experience frustrating delays.

Seamless integration

It shouldn’t be a pain trying to integrate your store or marketplace with your 3PL’s system. An experienced 3PL partner has the ability to seamlessly integrate any store, shopping cart or marketplace with their software so that your orders and tracking information automatically update.

Receiving Management

Inventory shouldn’t be sitting on pallets for several days or weeks after your 3PL has received it. The longer it sits, the longer you have to wait for your inventory to be logged. This can be a serious burden and cause hiccups in your supply chain, because you can’t sell what your customers don’t see (no inventory in stock).  

Make sure your 3PL quickly places stock (your products) into inventory within the first two days of receiving it.

Inventory and Order Management

In addition to receiving and stocking inventory, another important factor is inventory and order management. Your 3PL should have a modern system that shows real-time updates of your stock levels and orders. This helps you to see when certain items are running low and provides forecasting data and analytics.  

Account Management and Customer support

As we mentioned earlier, having a dedicated account manager to act as your eyes and ears in the warehouse is critical to your business and ecommerce order fulfillment success. Additionally, having friendly, professional customer support to boost your customer experience is equally as important.

Process for on How The Refunded Orders are Processed

The reverse logistics process is just as pivotal as the traditional logistics process. When choosing your provider – definitely audit their processes. For example, at Fulfyld, we offer custom order returns based on your specific needs. This helps to make fulfillment easier and speed up the process because the faster your returns are processed, the faster your customers can receive a refund and your inventory can be placed on shelves again if it’s resalable. 

3PL specialization

Its important to research what products your 3PL partner already fulfills and whether they have experience shipping your products, so you don’t run into any issues in the future. For example, if your company sells supplements and vitamins but your potential 3PL partner doesn’t have the means or resources to ship items that must be stored in temperature-controlled storage areas, you now run the risk of shipping expired or damaged products. Therefore, its important to choose a 3PL partner that knows the unique details of your industry and can also offer the best fulfillment solutions for your company. 

Quick, accurate shipping

Not only is it imperative that orders are fulfilled and shipped quickly, its also important that they are shipped accurately. What good is it for your customers to receive an order quickly if the order is incorrect? Choosing a 3PL with great order accuracy, in addition to speedy shipping, is crucial to your company’s success.  

In addition to knowing the important factors of a great 3PL, there may still be specific questions you want to ask to determine whether you’re choosing the best fit for your company.

Questions to ask your potential 3PL partner

Here’s how you need to audit your potential 3PL partner

Picking and Packing

Here are the questions you should ask about their process, picking and packing:

• What type of products do you ship?
• Do you offer value-added services?
• Do you charge for additional items per order?
• Is there a charge to include marketing materials, such as inserts?

Fees

Here are the questions you should ask about the fees:

• What type of price model do you have for your services? (percentage of sales, flat-rate, activity-based, etc.)
• What is the initial set up fee? Are platform integrations included?
• What is the cost of managing product orders?
• Who pays for fulfillment mistakes?
• Are there any additional fees?*

* Several companies have hidden costs within their contract. Be sure to thoroughly read the term of an offer before signing the contract.

Shipping

Questions about shipping:

• Do you offer discounts on shipping?
• Is international shipping offered?
• How long will it take my orders to be shipped?
• Do you have an order management system that will track my orders?

Customer Support

To figure out if their customer support is up to your standards, this is what you as:

• Do you have account managers available to answer my fulfillment questions?
• What are your customer service practices?

To Summarize

To wrap things up, here’s a summary of things you need to know.

3PL is a cost-effective solution for companies that need to manage their supply chain and logistics operations.

By outsourcing these functions to a specialized provider, companies can focus on their core competencies while leaving the logistics functions to the experts. With the right 3PL provider, your company can improve its efficiency, reduce costs, and increase customer satisfaction.

FAQs

For all the unanswered questions, visit this section.

What is 3PL fulfillment?

3PL fulfillment is the outsourcing of logistics and fulfillment services for an ecommerce company by a third-party logistics provider. It covers all aspects of order fulfillment including warehousing, storage, distribution, and delivery.

When is it time to outsource eCommerce fulfillment?

It’s time to outsource eCommerce fulfillment when a company realizes that they no longer have the time or resources to fulfill orders on their own. Outsourcing can help save time and money and prevent a company from needing to hire employees or lease a warehouse.

What are the advantages of outsourcing eCommerce fulfillment to a 3PL?

The advantages of outsourcing eCommerce fulfillment to a 3PL include: increased flexibility and scalability, more time to focus on building your brand, expertise and insight from your 3PL partner, no warehouse lease or employee hiring responsibilities, world-class infrastructure and technology, and dedicated account management and customer support.

What factors should be considered when choosing a 3PL for eCommerce fulfillment?

Factors to consider when choosing a 3PL for eCommerce fulfillment include: resources for storage, ecommerce fulfillment, customer service and branding, expertise in logistics and technology, centralized location, and real-time order updates.

How does a 3PL help make eCommerce fulfillment easier?

A 3PL helps make eCommerce fulfillment easier by handling all aspects of the fulfillment process, providing inventory management, and offering advanced order management technology. It frees up time and space for the ecommerce company and prevents the need for a warehouse or employees to fulfill and ship products. A 3PL should also have dedicated account management and customer support to ensure a smooth and efficient fulfillment process.

What is 3PL Shipping?

3PL shipping, or third-party logistics shipping, refers to the outsourcing of logistics and distribution services to a third-party company. The third-party company, also known as a 3PL provider, is responsible for managing the storage, transportation, and delivery of products from the manufacturer to the end-consumer.

List of the 3 most important aspects of 3PL Shipping:

1. 3PL shipping refers to outsourcing of logistics services to a third-party company.
2. A third-party company, also known as a 3PL provider, manages storage, transportation, and delivery.
3. The 3PL provider is responsible for delivering products from the manufacturer to the end-consumer.

What are the benefits of a 3PL for retail order fulfillment?

Retail companies can benefit from using a 3PL for order fulfillment in several ways. Firstly, it can reduce costs associated with warehousing, transportation, and distribution, as the 3PL provider assumes these responsibilities. Secondly, it can increase efficiency, as the 3PL provider can handle a larger volume of orders, reducing lead times and increasing delivery speed. Finally, it can improve the customer experience, as the 3PL provider can offer more accurate tracking, better customer service, and faster delivery times.

List of the 3 most important pieces of information for benefits:

1. Reduces costs associated with warehousing, transportation, and distribution.
2. Increases efficiency by handling a larger volume of orders.
3. Improves the customer experience with accurate tracking, better customer service, and faster delivery times.

What is a great 3PL experience?

A great 3PL experience is characterized by reliable, cost-effective, and high-quality logistics and distribution services. The 3PL provider should have a deep understanding of the retailer’s needs and be able to provide customized solutions that meet those needs. Additionally, the 3PL provider should have a strong network of carriers, advanced technology, and a team of experienced professionals to ensure seamless operations.

List of the 3 most important pieces of information related to great 3PL experience:

1. Reliable, cost-effective, and high-quality logistics and distribution services.
2. A deep understanding of the retailer’s needs and customized solutions to meet those needs.
3. Strong network of carriers, advanced technology, and experienced professionals to ensure seamless operations.

How does a 3PL provider improve the delivery speed?

A 3PL provider can improve delivery speed by leveraging its network of carriers, advanced technology, and experienced professionals. The provider can optimize routing, choose the best carriers for each shipment, and use real-time tracking to ensure that deliveries are made on time. Additionally, the provider can offer flexible delivery options, such as same-day or next-day delivery, to meet the needs of the retailer and the end-consumer.

List of the 3 most important aspects of how 3PL fulfillment helps to improve delivery speed:

1. Leverages network of carriers, advanced technology, and experienced professionals.
2. Optimizes routing and chooses best carriers for each shipment.
3. Offers flexible delivery options, such as same-day or next-day delivery.