What is 3PL? How Does Third Party Logistics Companies Work? Why do online stores use 3PL? Read and find out!
3PL is short for third-party logistics and it is used in supply-chain management and logistics to outsource elements of the company’s logistics and fulfillment services. The order fulfillment service providers are third-party sellers that fulfill orders for online sellers, physical stores, ecommerce stores, and etc. that don’t have their own warehouses or distribution facilities.
In other words, 3PL companies handle transportation and distribution for their client companies. There are 3PL services that focus on specific segments including freight shipping and product sourcing.
Any business or store that sells something tangible to someone else should consider 3PL companies. There are plenty of businesses out there that oversee the importance of 3PL and when they figure the overhead costs, the staff costs, and the expertise needed, they realize that a full in-house solution is not necessary and that 3PL is a more profitable option.
Before you decide to hire a 3PL company, you need to understand the services they offer:
- Procurement: This is how you get the items you sell. The products can be made from scratch in a manufacturing facility or sourced from overseas or domestic manufacturers. There are many 3PL companies that focus on procurement and can help you build, manufacture, and source ready items to sell.
- Transportation: Whether you are bringing items from overseas suppliers or domestic facility, transportation 3PL can streamline the paperwork, find carriers, meet your time schedule for an affordable price. There are 3 types of transportation domestic freight, import/export needs, and overseas shipping services.
- Distribution: This is a popular sector of the whole 3PL industry. The 3PL distribution service providers offer services that deliver your items to both B2C and B2B users including warehousing & inventory, product packaging & kitting, order processing, order packing, freight shipping for B2B sales, returns management, and stock level forecasting.
- Growth: There are a few ways that 3PL companies can help you grow your business by maximizing your sales reach. 3PL companies can help you develop and manage online stores, manage multiple platforms, connect sales channels to social media websites, and develop branding. These companies can also help you analyze and collect sales data to make informed category expansion and product development.
There you go – you know what is 3PL, how do 3PL companies work, and the services they offer!
— Bray Solutions (@BraySolutions) 18 de diciembre de 2018