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Comparing 3PL Fulfillment Providers In logistics and supply chain management, 3PL is a buzzword that most companies keep hearing around. But what is it? What does it mean and how can it help your company? Here is a simple definition: Third-party logistics services refer to outsourcing certain parts or components of your supply chain. For example, you might hire an outside company to deliver and pack your goods for you. You can also get 3PL services to manage your stocks and materials. You may need to do some hiring depending on how many outsourcing companies you will hire to perform these duties for you. A third-party company refers to any one who offers a package to your business for the performance of certain tasks related to your business. If you want a fast delivery for your goods, then you can opt for a truck driver. Similarly, you can also hire someone to pack your goods for you. When your company needs to send stock from one warehouse to another, you can hire third-party couriers like a van, truck, or ship. Or you can use 3PL providers to ship your items from one warehouse to another. In other words, you can have a provider that takes care of the entire transport, storage, packing and shipping needs for you. Why would you hire a 3PL provider instead of investing in warehouse equipment, eliminating the need for fulltime warehouse staff or hiring more drivers or warehouse assistants? First and foremost, hiring a 3PL provider actually saves you money. This is because you no longer need to rent additional space for storing your inventory or pay for the costly lease of a large warehouse. Instead, you can invest your money into purchasing the equipment you need to run your business more efficiently. Furthermore, hiring a 3PL also gives you access to flexible outsourcing plans. You can hire full-time employees or contract them on a part-time basis. This means that you won't have to spend time training them how to handle the shipping, receiving, and storing of your products. A good 3PL provider can take care of all these functions so that you can focus your attention on managing the rest of your ecommerce logistics process. 3PL services include freight forwarders, loading warehouses, trucking companies, customs brokers, as well as depots and drop-off depots. The most common services include the following: warehousing, reverse logistics, and shipping. All these services are necessary for running any kind of ecommerce business. Warehousing helps you store your products for long periods of time and make sure that your customers always have access to them. On the other hand, reverse logistics makes it easier for you to receive your goods. Reverse logistics simply means that the goods are loaded into a truck and later sent to the delivery warehouse of your customer. If you don't have a large warehouse, then this kind of logistics will be very helpful to you since you won't have to pay a lot of money to rent warehouses. Good fulfillment services include freight forwarders, full-line and online fulfillment providers, as well as pickup and delivery warehouse services. Finally, warehousing ensures that your products stay fresh and in perfect condition until they are purchased by your customers. It is a crucial service for all kinds of ecommerce businesses since you cannot be sure when a product will be ready to be sold. Good fulfillment services include packaging solutions, special inventory, and packaging slip that ensure products arrive in good condition. The first thing you should do when choosing your warehousing provider is to ask what their experience is in the field. Find out how long they've been in business and check the performance of their latest fulfillment efforts. A good provider should have experienced freight and customs handlers that can handle all kinds of shipments. Freight handlers should be knowledgeable about all kinds of shipping services such as air freight, ocean freight, and land transportation. Customs handlers should know how to pack fragile items, handle currency shipments, and have access to multiple forms of import and export documentation. Another important factor you should consider when comparing 3PL providers is their ability to manage an extensive inventory. An efficient provider will keep an extensive inventory of its goods, both in terms of big and small lots, as well as in terms of end-to-end inventory and packaging. This will allow you to quickly evaluate the current state of your inventory and find out what packing and shipping options are best for your current orders. Finally, ecommerce logistics providers need to have a good ecommerce fulfillment network in place. You may be able to reduce shipping costs by contracting with 3PL companies directly or through a fulfillment company that is partnered with them. However, in the real world, it's usually cheaper and easier to outsource the storage and inventory of your goods to third-party providers anyway. The most critical factor in your fulfillment network is security, so ecommerce logistics providers that offer dedicated servers and DAS (data acquisition system) access are usually the best ones to go with.
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