In 2019, 14.1% of global retail sales happened online. That share continues to steadily rise to 17.5% by 2021, showing that the global consumer is moving their shopping habits online. According to research by Nasdaq, by 2040, 95% of all global retail transactions will occur online.
China is already fast adopting the online retail model, and over 33% of all retail transactions occur online. With $672-billion in sales, China leads the way in eCommerce consumer spending. The US lags considerably in second, spending just over half that, with $340-billion in sales. The UK makes it into the top-3, and 2020 will see it break into the $100-billion+ sales club.
Still, the global trend is evident – eCommerce is on the rise, and it’s eventually replacing traditional retail altogether. Unfortunately, the “mom &pop store” is on its way out, and the rise of Amazon and other e-retail giants continues to climb to new all-time highs.
How 3pl Fulfillment Revolutionizes Your eCommerce Business
Do you think fulfillment can change the results of your eCommerce business? Suppose you have a robust dropshipping model, and you need to expand, or you’re a newbie starting your career online this week. In either case, you can benefit from fulfillment regardless of your experience, strategy, or model.
Making the transition from selling out of your garage warehouse to using a 3PL service can make an almost unbelievable difference to your business. Most people assume that they don’t have enough sales volume to justify using a 3PL eCommerce fulfillment center. Maybe you thought about it before and couldn’t justify the expense?
Sure, 3PL costs money – that’s a fact. However, do you know the value of your time? How much time are you dedicating to your logistics? Maybe you started that merch business on your YouTube or Twitch channel, and the orders are picking up? You’re probably making more trips to the post office, and its part of your daily routine now.
What could you be doing with that time during the week?
As an entrepreneur, we’re sure you’ve heard people preach on about time being your most valued asset. So, why are you spending it standing in line at the post office? Hiring a fulfillment center to pick, pack, ship, and track your orders is the way to go.
The best part about using a 3PL eCommerce fulfillment solution for warehousing and logistics is that you never have to worry about customer returns. Some companies can manage the entire customer service experience for you.
In this post, we’re going to unpack the top 11 reasons to use a 3pl eCommerce fulfillment center for your online business.
1. Benefit from a Purpose-Built Specialist Business with Market Experience
Do you know what it takes to be a top-performing fulfillment company? Do you know how to organize a complete logistics strategy from top-to-bottom?
Don’t worry, neither do 99.8% of all other eCommerce entrepreneurs. As a business person, you leverage the expertise of others. You look to surround yourself with experts in their field, while you focus on the vision and direction of the business.
By handing logistics over to a fulfillment center, you step out of the way of that side of your organization. You no longer have to control it; you have to manage it. By looking at reports, and measuring your analytics and statistics, you can find ways to improve and cut costs, refining your logistics, without ever needing to control the process.
Why add logistics departments to your business? Do you want to start payroll for more employees to handle your logistics? It sounds so much easier to pay a 3PL warehouse and logistics firm to handle all of that.
These companies have extensive experience in moving all types of products anywhere in the world. You get to leverage the industry knowledge they gathered over the years they have in business.
You capitalize on the networks and supply chains they understand and continue to develop. You benefit from the relationships they have in every department, from customs and clearance to local vehicle maintenance for delivery vans.
They do the hard work of getting your goods to your customer while you work on growing your business.
2. Extend the Reach of Your Online Business
More markets are coming online in the digital era. As the 2020s unfold, more people are looking to buy online. The implementation of social distancing and new social hygiene habits are going the keep people out of physical retail locations.
We’ll see a rising trend of people starting to buy more online. The consumer-mindset is beginning to experience a shift, where placing a barrier between the source and delivery will be a safer solution. Online offers precisely that; it mitigates some of the risk involved in the transaction.
Globally, people are making the shift online, and mobile is responsible for a large portion of the new traffic flowing through eCommerce marketplaces.
Mobile accounts for over 50% of all online transactions. If you’re a retailer, you need your site optimized for mobile customer experiences, and fully integrated for Android and iOS mobile platforms. Failing to optimize into the future of eCommerce will leave your business falling behind.
Prepare your business to reach globally and plan strategies to reach markets around the globe. With selling products in virtual marketplaces, you expand your reach over what’s possible with a brick-and-mortar business.
Some 3PL eCommerce fulfillment solutions have established international logistics systems working closely with local freight forwarders and logistics companies to fast-track your orders. Finding the right fulfillment center with a dependable logistics strategy can significantly impact the accuracy and efficiency of your shipping process.
3. Take the Warehouse Out of Your Home
Suppose you’re an up-and-coming eCommerce entrepreneur looking to start scaling into your new-found success – good for you! It’s time to get out of the basement or garage before you begin to take other rooms over in your home for a makeshift logistics department.
At some stage, you have to learn to let go. Holding onto control of your logistics will end up limiting your company and your success. You need to trust in the power of the process. 3PL companies and warehousing solutions take the hassle out of handling your inventory and shipping your orders.
With a 3PL eCommerce fulfillment solution, you get a warehousing solution, and you never have to handle your inventory again. When assessing your new 3PL warehousing partner, make sure you enquire about the rate card for warehousing space.
The 3PL partner needs to be transparent about its fee schedule for storage space. Some 3PL warehouses offer specials with low prices on the first three square feet of storage space.
However, the following rate for additional storage will probably be triple the rate of other alternatives. Be careful with hidden costs in the contract when checking your terms of service.
4. Enhance Your Customer Service Strategy
Do you have the time to handle all your customer service emails and returns messages? Can customers phone you 24/7 to get an answer about their shipping information? We didn’t think so. As a one-person solo business, there’s no way you can manage all your client requests.
However, you realize that customer service is a vital component in your business. If you don’t have a customer service component in your company, it will eventually cost you money. Why do all of this yourself when you can have a 3PL partner do it for you?
When you hire a 3PL fulfillment partner, look for a firm that includes customer service as part of the package. These companies have teams of reps dedicated to servicing their clients (which are your clients). Many of them run 24-hour service call-lines and online chats.
The 3PL partner should invest in training its customer service teams. You get the benefit of professional customer service agents handling all your customer communications. You get competent, functional agents at your disposal, and they aren’t even your employees.
They essentially take care of your customer service, and you never have to deal with an angry customer about issuing a refund ever again – what a pleasure. Sure, we know that 3PL firms charge for this service, but in this case, we think it’s money well invested in your sanity.
5. Focus on Your Business Competencies
As a business owner, you need to learn the power of focusing on your business core competencies. As an entrepreneur, look at your business functions and ask yourself what you can automate and abdicate, and delegate away from your time.
The more time you can free up in your schedule, the more you can focus on the things that matter in business – like planning on that new branch opening in Tokyo next year. You get the idea – you need to be focusing on the bigger stuff for your business, not the finer details. A 3PL company helps you make that shift away from worrying about what’s going on with your logistics.
Imagine if you never have to worry about shipping your stuff anymore? The partner handles all your returns, and you never have to worry about it again. The 3PL company issues you on-demand reporting on all your metrics, allowing you to see where you can improve your processes, and if the company is meeting your expectations.
By releasing the duties of logistics and warehousing to a 3PL solution, you free your time to focus on finding new products to sell, new markets to penetrate, and new profits.
6. Effortlessly Scale Your Business
If you’re working out of your house and wondering where you’re going to fit your next batch of inventory – you need a 3PL solution. There’s no sense in having to receive your stock and try to squeeze it into the dining room while your partner goes mad at you for cluttering up the entire house.
With a 3PL solution, you get someone to take care of warehousing and shipping your products anywhere in the world. However, there’s more to it than that. Your 3PL solution will scale with your business as you grow. With another department handling your logistics and warehousing, you never hit the brick wall where demand starts to outstrip your capacity to store and supply.
You get to upgrade your supply chain as you need more capacity. It’s a seamless transition, and you scale hand in hand with your 3PL provider. The 3PL provider should make this facility clear to you from the beginning.
As you scale, you’ll find that economies-of-scale start to reduce your costs significantly. Your 3PL partner should offer a sliding scale of cost benefits that increase as you spend more with the company and demand more resources. When you start to reach a point where you feel you are not getting enough value out of the deal, speak to your account manager.
If you’re bringing the company a significant amount of business, you have negotiating-power over your rates. In this economy, 3PL providers are looking to secure as much business as possible. By building your business in lockstep with a 3PL provider, you give yourself a track record that can benefit you round the negotiating table later in your relationship.
7. Lower Logistics Costs for Your Business
Your 3PL provider will have an established network of local service providers. These are relationships that take years or even decades to build. By hiring the right 3PL company, you benefit from all those networks, and you have them at your fingertips, ready to execute on your orders.
Think about the cost of establishing those networks? It took many hours of dedicated service to develop those lines of communication and build and budding relationship into a stable, respected commitment over the years. You can’t put a price on that.
However, these relationships and the years of experience shows up in your shipping costs. Using a 3PL service might come with some fees, but you save dramatically on your shipping fees. If you’re shipping bulk, your 3PL partner will arrange industry discounts to pass on the savings to you.
Your 3PL provider will have a network of partnerships with many local service providers from companies like FedEx and UPS. You benefit from the speedy delivery networks founded by these firms, at discounted rates issued by your 3PL provider.
The 3PL provider can access much cheaper rates by opening accounts with the companies and using the volume of orders they push through the company to gain a discount.
If one supplier stops pulling its weight, the 3PL can adjust the strategy to favor the other supplier until the prices return to alignment with what they expect – it’s the power of the free market. You’re benefiting every step of the way.
8. Look for Customized Product Packaging
To stay ahead of the competition in a competitive eCommerce environment, you need to separate yourself from the rest. Branded packaging is one of the best ways to show your customer they are dealing with a professional brand they can trust.
There’s something about seeing a branded box that gives more credibility to the unboxing experience. As a dedicated eCommerce entrepreneur, it’s your duty to do everything you can to make your customer experience shine. Including branded packaging with your client’s purchase is just another way to make your brand stand out from the rest.
Speak with your 3PL provider and ask if they cater for this service, some do, and some don’t. It’s not s necessity for your business, and it’s going to add to your expenses. However, as far as a brand-building exercise for your label goes, it’s well worth the investment.
The customized packaging experience doesn’t have to limit itself to the branded box. You can include aspects of the entire unboxing experience with your 3PL provider, including coupons, brochures, and other custom inserts and marketing materials with every package they ship out.
Here’s a pro tip – Ask your 3PL provider to include a flyer asking your client to leave a Google review for your business. Offer them a coupon code as an incentive.
9. Cut Back on Operating Costs
Let’s say you decide to keep your logistics in house, which would be a terrible decision you’ll regret shortly.
In any case, you’ll have to end up hiring someone to do the packaging and the posting for you. There is going to need to be someone answering the phones for customer service and answering emails – unless you plan on doing all that yourself, all day, every day.
Hiring people requires salaries, employee insurance, and more costs on your bottom line. Why go to all that hassle? You can outsource all that to a firm that specializes in logistics systems proven to deliver consistent results. The cost of a 3PL subscription is a fraction of what it’s going to cost you to hire a permeant employee.
With a 3PL doing everything for you, you reduce your need for a workspace. There’s no need for a storeroom, packing room, or other related logistics stations in your home. All you need is your office and your laptop – there’s no need for packing tape, scissors, bubble wrap, and boxes anymore.
Those expenses add up[, and you’ll have more cash flow in your bank account, replaced with a reliable payment to your 3PL provider. Your 3PL provider can help you quantify all those costs through automated reporting.
You get the chance to integrate an entire inventory management system with your 3PL provider, letting you keep tabs on your stock in real-time.
10. Take Advantage of Purpose-Built Technology
Any entrepreneur can tell you that the most challenging aspect of founding a business from scratch – is building systems into the company. Founding a company is one thing, but going through all the details to create a network of interlinked systems that form an organization is complex.
It takes the world’s most talented entrepreneurs years, even decades, to build the world’s biggest companies. If you think you’re going to step out and create a logistics firm into your eCommerce company, you have better have a reason for adopting that strategy.
If that’s the case, you would want to start an empire, that’s okay, some people need to do that. However, for the rest of us who only want to build an eCommerce business, you should be okay with leaving the logistics to someone who knows what they’re doing.
11. Keep Your Workforce Small
If you have a 3PL fulfillment company taking care of your logistics and fulfillment needs, how many people do you really need to help you run the ship?
You’ll find that when you release that part of operations, you have plenty of time to switch your focus onto other aspects of the business.
With more time on your hands, you can get to the tasks you would usually never have the time to do.
As a result, you suddenly experience a boost in efficiency in other areas of your business, driving growth forward. You’ll surprise yourself at how you start performing in other areas of your company, and how you come up with solutions to other bottlenecks you couldn’t see before.
Implementing a 3PL fulfillment center solution in your eCommerce business will be the best step you make toward growth in your e-retailing career.
You’ll benefit from working with people that know the business of warehousing, fulfillment, and logistics.
You’ll find that you have the tools necessary to break into international markets to extend the reach of your business to new customers around the globe.
Take the business out of your home and move it into someone else’s warehouses. With 3PL, you no longer have a living room cluttered with boxes and bubble wrap.
Get your company a customer service strategy that works. Get 24/7 customer service for your clients while you sleep soundly at home.
Focus on your business competencies. Let your professional 3PL partner take care of the delivery end of the business. You have the time and the new energy to focus your efforts on sales and marketing.
Scale your business effortlessly while reducing your costs as you grow.
Introduce intuitive strategies like branded packaging and point-of-contact marketing connected to the unboxing experience.
Keep your workforce small while getting more done. 3PL gives you more resources to get more done with your eCommerce business.