What is a 3PL?
3PL (or third-person logistics) refers to the service which allows businesses to outsource elements of operational logistics, such as warehousing and order fulfilment.
Ecommerce businesses can be time-consuming, you can never have enough time. Especially when you’re on your own and your business is growing. But 3PLs can provide that leisure to help you to focus on other parts of your business, such as increasing your sales.
Let’s look at some of its benefits and see how that can connect to increased sales.
3 Main benefits of using 3PL
Here are the main three benefits of using 3PL.
Benefit 1. More time for other tasks
The immediate benefit of a 3PL is how they take care of the most time-consuming tasks: storage, inventory management, picking, packing and shipping.
It’s going to be hard to go manage all of those tasks when your personal ecommerce business starts to get more orders. You’ll lose time to do other major tasks such as product development, re-stocking, marketing and so on. If you don’t have your products ready and you don’t reach out to more customers, then your business won’t last long.
But when you leave it to the good hands of the specialists, you’ll have that precious time and energy to do them.
Benefit 2. Save money
As your business grows, there are many investments to consider:
- Storage warehouse;
- Staff employment;
- Shipping materials; and so on.
However, investments are costly. If your business doesn’t drive, then you can end up in a situation where you can’t pay the rent and the salaries.
On the other hand, 3PL services can provide the upgrades you need at a much cheaper price. This is because 3PLs can be flexible depending on your business situation.
For example, if there’s a season when you get fewer orders, 3PLs will automatically scale down their costs. When your business is ready for holiday shopping, 3PLs will scale up with you.
Cheaper shipping costs
3PLs also provide cheaper shipping costs. This is possible because 3PLs regularly ship large volumes of goods, which leads to volume discounts from shippers. This means you can have more margin.
Costs are calculated based on various factors and different for each company. So, we recommend that you fully comprehend your situation before you start looking.
Once you start utilising 3PL and save money from the other expenses, you can use the funds for other enhancements, such as:
- gaining paid traffic;
- developing new or upgraded versions of products;
- improving your website’s design and usability;
- creating a mobile app version; and so on.
Benefit 3. High-quality order fulfilment
3PLs are the pros of order fulfilment, which involves intricate and heavily detailed logistics. Because they have a well-developed system, 3PLs can handle large amounts of orders that you won’t be able to handle alone.
3PLs also provide customisation services, such as fast shipping services, package wrapping, and temperature-control packing. They can also handle putting in personalised letters for the special ecommerce experience.
Instead of going through each order and adjusting the factors by yourself, 3PLs can do that much faster.
With the help of 3PLs, you can easily deal with returns as well. When a product is returned, 3PLs check the quality and report back to you. If the product seems to have no problems, it can be stored again in their warehouse until the next order.
Ways to increase sales using 3PL
Now that we know the top three benefits of 3PL, let’s look at how 3PLs can help increase your sales.
Keeping existing customers
Gaining new customers is also important, but ecommerce earns more through existing customers. 3PLs help to keep them from leaving your brand.
A smooth order fulfilment process leads to increased brand reputation and customer satisfaction. Once customers get that best experience, they’ll become repeaters expecting that same quality. 3PLs will provide that quality every day due to their expertise.
The same can be said for the quality of the products. Customers will expect the same performance from the product when they buy it after their first time. If they’re loyal to your brand, then they’ll anticipate for new or upgraded versions as well. Therefore, constant product development is also important to keep your customers.
3PL will manage your products with care, while you have more time to improve and develop your products.
As you lose time with more orders coming in, work can get sloppy. Customers are quick at catching a decline in service quality, and when they do, they go away. So, it’s best to avoid that.
More frequent marketing
Reasons are simple. Potential customers need to be aware of your brand.
For example, using social media is now the golden rule for raising awareness of your brand. This is expected as many modern people check their social networks almost every day.
Therefore, sharing user-generated content (such as videos and images) for the audience to engage is important. More engagement leads to raised brand awareness and can lead to the customer purchasing your product.
However, the process of choosing the best words and preparing the best graphics for your posts is not a simple task. You might be used to it now, but when your business gets bigger it’s going to be hard to make the time for the process.
Other marketing strategies are time-consuming as well:
- Case studies;
- Free trials; and more.
You won’t be able to fit all of these into your daily schedule alongside order fulfilment. You’ll end up picking, packing and sending every day because your customers are waiting.
Marketing is the main driver of raising your order numbers for your business. Just surviving the day by fulfilling orders isn’t enough.
But 3PLs can provide that time.
Again, they are specialists at the detailed logistics in order fulfilment. They can take away your workload and complete it more efficiently.
Once you start using 3PL, you won’t have to worry about delivering your products to your existing customers. 3PLs will still be able to handle the orders even if the number increases, so there’s no need to worry. You can use your time to focus on reaching out to new customers.
Expanding your market internationally
If people around the world know about your goods, it’s a chance for more sales. 3PLs have courier partnerships which make this much easier for you.
3PLs can choose which courier to request depending on the condition of the package and where it’s headed. That way, 3PLs can provide the best solution for your order fulfilment.
Here in KeepSpace, we work with eight different shipping companies, each company having its own strengths.
3PLs have access to the fastest and cheapest way to ship internationally due to its partnership with couriers. This is beneficial when your product needs to be sent overseas.
You won’t have to go and search for various couriers on your own and pay expensive fees. 3PLs will do that for you, and your market will expand internationally.
Integrate and automate your store
Another way 3PLs can help you improve you improve and streamline your fulfilment process is to link with multiple ecommerce platforms while automating your processes.
You won’t have to check your orders and stock using different platforms and plugins. Instead, 3PLs utilise an API integration which allows you to check all of them in one platform.
API (Application Program Interface) is a software intermediary which allows seamless interaction between various applications, data and devices.
For example, online travel services utilise API. The API collects information that matches with your flight requirements from the airline websites. Then, the API delivers the matching information to be shown on the online travel service.
In the case of ecommerce, APIs work between the ecommerce platform and the 3PL’s management system. Orders and stock levels are sent directly to the 3PL’s platform directly from your ecommerce platform of choice.
The process is all automated, so it makes it easier for you to manage inventory. Also, API integrations eliminate the risk of human error as the data is pulled directly.
3 Main benefits of 3PL:
- More time to do other tasks
- Save money
- High-quality order fulfilment
Tactics to increase ecommerce sales using 3PL:
- Keeping existing customers
- More frequent marketing
- Expanding your market internationally
So, there you have it. The benefits of using 3PL and how to raise ecommerce sales using it.