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E-Commerce and the 3PL – The Benefits of Teaming Up

3PLs offer experience, sharply-honed operations, and other advantages that let e-commerce companies focus on what they do best

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E-commerce is the driving force for warehouse and shipping industries, so a focus on efficiency of distribution is paramount to gain competitive advantage. Demand is an ever-growing constant, and the movement to appease that demand can produce a strain on an entity wanting to thrive within the E-Commerce world. Multiple factors can either make or break those that want to dive into these waters, but what is an inexperienced company to do? Enter the 3PL, and what it can bring to E-Commerce.

Third-party logistics service providers (3PLs) design their distribution facilities to be flexible and scalable to serve a wide range of clients—capabilities that align well with the needs of growing
E-Commerce ventures. But the advantages don’t stop there. Here’s a look at some of the potential benefits of teaming up with an experienced 3PL:

Expertise where you need it

Having a 3PL in your corner means a positive redistribution of focus. Many 3PLs have extensive experience in picking and packing high volumes of small orders quickly and accurately—expertise that can be invaluable to companies who are new to the e-commerce game. Retailers with existing distribution operations can also opt to use a 3PL to handle their e-commerce fulfillment while they concentrate on distribution to their stores.

Experiment in new markets

Utilizing a 3PL allows E-Commerce companies to wade into new waters. Be it new markets or new product offerings, this approach gives the client valuable insight into the actual potential prior to making a major investment, which can offer flexibility that a stand alone business might not have available.

Cost reduction

Depreciation is a very real expense when you’re running your own DC. By working with a 3PL, you can embrace the benefits of added tax advantages or the maintenance associated with the capital equipment you might have added to your facility.  3PLs offer a distinct advantage as well in the shipping cost category. Many 3PLs service multiple clients from the same facility. This allows them to consolidate parcels from individual clients into LTL (less-than truckload) or truckload shipments and negotiate lower rates.

Last mile potential

You want to be closer to your customer so they can experience that Last Mile service that is so important. Partnering with a 3PL can offer multiple locations to house client inventory, meaning faster deliveries and better customer service. In addition, returns are a problem for everyone. Many 3PLs specialize in handling returns, offering clients access to secondary markets, third-party wholesalers, and recyclers for damaged products.

Labor advantages

Hiring and firing, health insurance, union issues and the other responsibilities that come with managing a work force are often more than a growing company wants to take on. Experienced 3PLs can assume these tasks along with the paperwork and reporting burdens that go with them.

Scale seasonal peaks

Seasonal E-Commerce struggles are no joke, and being prepared for them requires flexibility and adaptability and Because 3PLs typically serve a diverse clientele with ever-changing products, they design their facilities to flex easily. This makes them well suited to handle fluctuating volumes, such as seasonal peaks.

Test drive new technologies

With new technologies and improvements being introduced each year, the desire to see how they could affect and improve your operations is justified. Similar to test driving a car so you can try out the model before buying it, selecting a 3PL that uses specific technologies allows clients to test the capabilities of those systems before buying them for their own facilities.

Surf the outside factors

The fortunes of e-commerce companies are notoriously hard to predict. You can be at the mercy of consumers, environmental factors, or the markets themselves. Using a 3PL allows companies to scale their operations up and down as markets fluctuate without the risks of investing in infrastructure or personnel, making it easier to ride the wave and stay balanced while doing it.

Don’t overlook how a 3PL can benefit your company’s E-Commerce growth strategy. By harnessing the power they can bring to your distribution needs, you could see your business break through it’s potential.

See Also

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