There are several benefits to outsourcing fulfillment to a 3PL, as shown by the list below. While each 3PL company may have a different set of talents, they all provide inventory management, packaging, and delivery services that help businesses maximize their earnings.
1. Save time and money
You may save money by outsourcing fulfillment to a 3PL. If you hire a 3PL, you won’t have to buy or rent the warehouse space, logistics operations, manpower, or technology needed for in-store delivery.
When you’re a small business, doing the job yourself might be cost-effective. These expenses include storage space, forklifts and other equipment, warehouse management software (WMS), recruiting and labor costs, workers’ compensation coverage, and liability insurance.
Saving time is another advantage of outsourcing fulfillment services to a 3PL. Working with a 3PL rather than packing boxes, waiting in line at the post office, or setting up fulfillment infrastructure allows you to focus on more essential activities such as product development and marketing instead of doing it all yourself.
2. Leverage industry expertise
As an ecommerce specialist, it’s unlikely that you have the time to be well-versed in all aspects of shipping and delivery. That’s where a 3PL comes in: your 3PL will be knowledgeable and up to date on current industry shifts and complexities, so you don’t have to.
The most significant advantages of a 3PL are that it increases supply chain efficiency and ecommerce success. In addition to these resources, 3PLs may enlist the services of marketing firms, bespoke packaging providers, and additional consultants in order to continue to improve supply chain efficiency while also assisting with ecommerce success.
3. Expand your reach
If you’re only operating in one location, you’re limiting your company’s potential. Working with a 3PL might assist you in growing your business.
The capacity of a WMS is restricted by the size of its supply chain. The majority of 3PLs have a larger distribution network than in-house fulfillment has. A 3PL with warehouses all over the country can assist you save money on shipping and transit time for purchases.
For example, if you have items sent from Las Vegas to New York City, the freight charges will be greater than if they were transported from a more central location.
How does 3PL pricing work?
The cost of a 3PL is determined by the 3PL’s pricing system, as well as your company’s unique requirements. The following are several of the most prevalent 3PL costs.
Costs and Definition
Onboarding costs: Costs of 3PL fulfillment services and technology setup.
Inventory receiving costs: The 3PL process of accepting and storing incoming products. There are a number of different ways to charge for receiving, including per-unit, per-pallet, and flat fees.
Inventory storage costs: When you store your items at a 3PL’s fulfillment center, you’ll be charged for storage space. The price of warehousing varies depending on the SKU or unit.
Order pick and pack costs: Some 3PLs charge by the pick, so you’ll be charged for each item in the order.
Packaging costs: Some 3PLs charge for packing materials such as boxes and airfill as a distinct line item, while others integrate them into the delivery.
Kitting costs: Kitting and assembly refers to any measures taken to pack or arrange items before sending them. Because each customer’s requirements are so different, kitting fees are not always the same.
Shipping costs: The fee a 3PL charges to transport an order from their fulfillment center to your client’s address. The cost of delivery varies based on such factors as shipping time, zones, and dimensional weight.