Imagine receiving 1000+ orders in a month and getting stressed handling and delivering them on time. The result? Your customers will be disappointed, and your sales will drop. But with a 3PL for eCommerce in action, you can improve the supply chain logistics so your orders are fulfilled without fail.

However, before partnering with a 3PL provider, you must understand what it means and how it supports your business from the ground up. It can help you choose the right one and save recurring hiring costs.

So, if you haven’t started leveraging 3PL and want to understand how it works, this blog acts as your supporting guide. It explains how third-party logistics improves the operations and how you can choose the right partner for this job.

What is 3PL for eCommerce?

3PL, or third-party logistics, is outsourcing warehousing, shipping, order fulfilment, reverse logistics, and other supply chain activities. Instead of handling these logistics operations yourselves, you can depend on the service provider with access to advanced tools and the right skills.

So, while the outsourcing partner focuses on meeting customer expectations, you can focus on growth and expand your operations without worrying about your storage capacity.

How 3PL Works in eCommerce

It is recommended that any brand handling over 500 orders should outsource the order fulfilment responsibility so they can focus on what’s more important. The third-party logistics in eCommerce work in three stages:

• Warehousing

The first step is to send your products to the 3PL warehouse for storage, ready to ship. For storage, you must coordinate with the fulfilment centres and fill out the “Warehouse Receiving Order”. It specifies the product quantity and name to avoid confusion. Once the partner receives your inventory and categorises it, they store it on their shelves for dispatch.

• Order Acceptance

When your customers place an eCommerce order, the 3PL initiates the process by retrieving the item from their storage. They match the product SKU with the order information so there’s no mismatch, and customers receive exactly what they order. Afterwards, the warehouse team sends the product to the packing department.

• Packing and Shipment

Once the department receives the parcel, they pack it in an appropriate container as per the product’s weight, measurements, and branding. They put the appropriate shipping label on the box and prepare the package for pickup. The team also sends a shipment confirmation once the package leaves the warehouse.

Key Services Offered by eCommerce 3PL Providers

Your 3PL service provider handles the entire order fulfilment cycle, so you don’t have to take care of anything except due diligence. Below are the main services you can expect from the logistics company:

1. Storage

3PL companies store inventory in a designated space, so you don’t have to invest in warehousing. The service providers offer more than storage services. They offer expert advice on how you can efficiently manage your inventory levels.

2. Inventory Management

The service provider handles the product inventory using Warehouse Management Software, so both parties can keep track of the stock level. It helps forecast demand and avoid product unavailability at the time of order. The problem is especially prevalent in quick commerce operations.

3. Order Picking

The companies have sufficient resources to pick products for every new order. They follow a pre-set SOP to reduce time and maximise operational efficiency. In case a wrong product is picked and shipped, it can severely impact the business’s reputation.

4. Packaging

Once the staff picks the order, they carefully pack it in the correct box with the labelling. 3PL companies for eCommerce focus on standard and customised packaging as per the order demand.

5. Shipping

3PL logistics companies take care of the shipping, right from transportation to arranging return pickups. They also follow several quality checks that are performed with advanced technology.

6. Order Tracking

You and your customers receive live order tracking information so you know the status at all times. Customers can track this information to ensure that they are available to receive the parcel and avoid any kind of miscommunication.

7. Reverse Logistics

The eCommerce 3PL providers take care of reverse logistics so the products can reach the warehouse from customers’ addresses.

Benefits of Using 3PL for eCommerce

3PL services for eCommerce companies help scale your business and handle all the supply chain activities so you can save time and operational expenses. Here is how it benefits further:

• Cost and Time Efficient

Partnering with a third-party logistics provider helps save on operational costs like warehousing, packaging, inventory management, and order fulfilment. Additionally, by depending on the service experts, you can save time and focus on other aspects of your business.

• Tech-Enabled Management

3PL companies are well-equipped with inventory and warehouse management software, so you don’t have to invest in technology. Simply outsource your tasks, and they will fulfil your orders on time.

• Minimum Risk

You are handling nothing in-house and outsourcing the entire order lifecycle to an expert. As a result, you don’t have to worry about incorrect deliveries or slow speed. You can expect that they will deliver the orders at a faster rate and efficiently.

3PL Pricing in India

The package of 3PL in India varies depending on the SKU count, volume, type of products, and geographical location. It is best to consult the top-rated 3PL companies to fetch the prices and make a decision. A typical pricing structure includes the following:

• Storage fees
• Picking and packing
• Shipping
• Return processing
• Add-on expenses

When Should You Use a 3PL?

Although there is no exact time to partner with a third-party logistics provider, it is advisable to use the service once:

• Your monthly orders cross 500
• You want quicker order fulfilment
• Your inventory and warehousing expenses are consistently increasing
• You want to target a huge pool of customers in a single geographic area

3PL vs In-House fulfilment

While third-party logistics services are often prioritised in today’s competitive times, not every brand is sure if they are better than in-house fulfilment. Below is a quick comparison so you can understand the right option for yourself:

How to Choose the Right 3PL Partner

It is imperative to choose a third-party logistics partner that adds value to your business. Here is how you can finalise on a partner that profits you in the long run:

• Industry Experience

Look at the track record of the service provider so you know they are trusted and have the required experience to fulfil your requirements.

• Pricing Model

Analyse the cost structure of different 3PL partners and identify the one that fits within your budget without compromising on the services. Additionally, ensure that there’s 100% transparency and no hidden costs.

• Customer Service

Hands-on support is crucial for smooth operations. So, ensure that you partner with a third-party logistics company that offers real-time visibility and proactive resolutions.

• Technology Integration

Automation has become the backbone of 3PL providers as they manage inventory more efficiently and enable live tracking facilities. It helps companies scale without worrying about under- or overstocking.

Challenges of Using 3PL (and Solutions)

Although third-party logistics is critical to simplifying eCommerce operations, there are a few downsides which cannot be ignored. They can only be understood and overcome smartly. Here’s how:

• Minimum Control

When you assign a 3PL company to handle your logistics, you are no longer in charge of the operations. Whether a product reaches the customer on time and correctly depends entirely on the third party.

However, if you choose the right partner that always keeps you in the loop, you can participate equally in the decision-making process.

• Communication Gap

There has to be continuous communication regarding inventory levels, order fulfilments, and other logistics-related information. But with multiple brands to handle, giving updates becomes complex for the service providers.

Autonomous operations play a key role here, as companies can use tech-enabled warehouse management software for regular updates. Once the communication route is sorted, you can stay updated at all times.

• Time-Consuming Process

Partnering with a 3PL for an eCommerce platform can be time-consuming and tedious. As a brand, you have to ascertain that your data moves seamlessly. However, it is challenging for companies that still lack technically sound resources.

Choose a 3PL partner that offers strong technical support and a plug-and-play integration with major marketplaces. It not only saves time but also makes the transition to eCommerce platforms seamless.

• Wrong Partnership

One wrong decision about choosing the 3PL service provider and your sales suffer. The orders may get late, the parcels may be sent poorly, or the delivery information may be incorrect.

Make sure you are comparing at least 4 to 5 experienced and reliable service providers before making a decision.

Best 3PL Companies for eCommerce in India

With so many third-party logistics companies to choose from, it is crucial that you do thorough research and find a business that matches your requirements. Compare your operational workflow, tech needs, inventory profiles, and customer expectations to choose the best partner for deliveries. It helps establish a long-term partnership and streamline your supply chain without worrying about delays.