If you’ve been in the ecommerce space, you might have heard the terms 3PL and Warehousing thrown around. If you’re a new or smaller seller, 3PL might not be as relevant to you– yet. If you want to grow your business and become a distinguished brand, you’re going to want to keep reading.

In this article, we’ll do a comprehensive walkthrough of 3PL warehousing. The article will cover what it is, if you need it, and how you can find a partner that works for you.

Defining What 3PL Logistics Is

Third-party logistics (3PL) refers to outsourcing logistics and supply chain management functions to a specialized service provider. Basically, hiring someone else to take care of the logistics that come with buying inventory, storing it, processing it, managing it, and delivering it.

Dropshipping fulfillment platforms like Zendrop kind of already take care of that for you. However, there’s one key difference between that  and true 3PL: ownership.

Which is why as your business grows, it’s vital that you partner with a 3PL provider you can trust. 3PL companies manage a variety of tasks including warehousing, transportation, inventory management, order fulfillment, and shipping. This allows your business to focus on their core operations while benefiting from the expertise, technology, and scalability offered by 3PL providers. 

By moving from basic fulfillment to advanced logistics by leveraging 3PL services, companies can improve efficiency, reduce costs, and enhance customer satisfaction through more reliable and faster delivery of products. This is why Zendrop naturally offers 3PL services in both China and the United States for users whose stores grow into bigger brands.

Read More: Benefits of US 3PL Logistics

Understanding 3PL Logistics

So, how exactly do 3PL companies work? Here’s a deeper look into how 3PL companies operate and the comprehensive services they offer:

Warehousing

Warehousing is one of the main features a 3PL company provides. It’s a bit of an umbrella term, but generally covers all the tasks needed to operate a warehouse. 

• Storage Solutions: 3PL companies will assign your store a physical space in their warehouse for the storage of physical goods. As far as pricing goes, they’ll typically charge for storage fees, handling fees, shipping fees, value-add fees, and admin fees. The obvious benefit is that you won’t have to buy or rent your own warehouse, hire staff to run, and spend months setting up systems and training to make everything operational.
• Inventory Management: You can also benefit from advanced inventory tracking systems that monitor stock levels, manage reordering, and provide real-time data analytics. This means you won’t have to worry about stockouts and minimize losses on bad products.
• Cross-Docking: Warehousing also lets you massively accelerate processing times via cross-docking. This is a method where products are directly transferred from inbound to outbound transportation with minimal storage time, reducing storage costs and speeding up delivery times.

Transportation

Transportation and fulfillment are not the same thing. Transportation covers the supply-side of your business, dealing with things like pricing negotiation, getting products from your supplier, and more.

• Freight Management: Because we rarely see how goods get transferred from one country to another, we often take it for granted. The truth is, moving freight around is highly complex. 3PL companies will often take care of this themselves, coordinating the movement of goods via various transportation modes, including trucking, air freight, and ocean freight, to ensure timely and cost-effective delivery.
• Carrier Negotiation: 3PL companies will also leverage the size of their business to enter highly cost-effective contracts with various carriers to make sure your goods are delivered as fast as possible.
• Route Optimization: Lastly, being the 3PL space means these companies often have access to traffic, road, and route information you won’t. By utilizing advanced software to plan the most efficient routes, they can save you money and optimize delivery speed by reducing transit times and fuel costs.

Read More: Advantages of Zendrop's China Based 3PL

Order Fulfillment

So, not only do 3PL services get your products from the manufacturer to their warehouse and give you a space to store it all in, they’ll even take care of the order fulfillment.

• Pick and Pack: 3PL companies will usually have highly efficient systems in their warehouse to grab the right items as fast as possible. They’ll even provide packing services, giving you the option to repack your products in your own custom packaging. And since this all takes place in one spot, processing times are greatly reduced.
• Shipping: Shipping may seem simple, but there are loads of different regulations and policies regarding weight, size, irregular shapes, materials, and half a dozen other factors that determine the price and deliverability of a product. 3PL companies arrange and manage the shipment of orders to customers, including handling shipping documentation and ensuring compliance with regulations.
• Returns Management: Now this one can be a massive headache if you try to handle it on your own. Not only can improper returns management waste time and money, but it can even lead to your store and ads being delisted or blacklisted. Thankfully, 3PL companies will often handle processing returned goods, including restocking, refurbishing, and managing reverse logistics to handle returns efficiently and reduce waste.

Value-Added Services

Many 3PL providers offer additional services to enhance their core offerings. These depend on a case-by-case basis, since some companies might not have the facilities or resources to offer some of the more intensive services.

But generally speaking, many will offer:

• Kitting, Assembly, and Bundles: Combining individual items into ready-to-ship kits or assembling products as needed. They can even bundle some products together for you so it all arrives in one parcel.
• Customization: White label and even private label services such as personalized packaging, labeling, and product customization services to meet specific customer requirements.
• Quality Control: Implementing stringent quality checks at various stages of the logistics process to ensure products meet the required standards.

The main point is that 3PL services offer you a measure of control and customization that you can’t get from basic fulfillment services. 

Apply for Zendrop Select to Access Zendrop’s 3PL Services

Conclusion

Summary of Key Points

Though you may not need 3PL services right now, you definitely will once your business starts growing beyond a certain point. 3PL warehousing companies can offer a vital piece of supply-chain management that would remain largely hands-free.

As the ecommerce industry continues to grow in size, brand differentiation and market reach will become all the more important. With how easily accessible products have become, it’s only a matter of time before even the giants begin to struggle.

To that end, it’s vital that you seriously consider a reliable 3PL company to handle your logistics for you. That way, you can focus on launching your own products, marketing your brand, and growing your business.

Interested in 3PL? Apply for Zendrop Select to Access Zendrop’s 3PL Services