3PL: Pros, Cons, And Effective Use
3PL: Pros, Cons, And Effective Use
Outsourcing fulfillment to a 3PL – a third-party logistics company – is the final option for merchants.
With this method, sellers only have to worry about getting their stock into their 3PL. Furthermore, it is a simple process as you can purchase your goods and then transported them directly to their warehouse. Further, they will be unpacked and kept according to their own warehouse management procedures.
The 3PL should be integrated with your order management system in some way. Because then they are notified when you receive an order. Eventually, then your order will then be picked, packed, and shipped directly to the consumer by their team.
Pros
The primary benefit of employing a 3PL is that you’re basically handing over your fulfillment to the experts. Furthermore, it implies that they should be able to process your orders much more quickly. It will further benefit your metrics and also your consumers.
Moreover, it implies you won’t have to store or manage inventories. In addition, the only part of the fulfillment process that you have control over is getting your inventory to the warehouse. Further, they’ll take care of the selection, packing, and shipping for you, Moreover, some will even handle customer service and returns.
Simply put, you are operating a small business without the worry of fulfillment. And, also offering more time to focus on what your company does best.
In addition, 3PLs are frequently flexible, especially to high-volume sellers, and may provide certain services. It includes kitting and packaging, inserting fliers into packages, or more before shipping.
Cons
Sellers who use a 3PL don’t have any involvement in the fulfillment process. Furthermore, it simply means that they lose control over how it’s handled.
However, it is not always a negative thing. But, if you have things that must be handled and packaged in a specific way. Then, you must ensure that the 3PL is willing and able to replicate it.
Despite the fact that 3PLs may provide greater flexibility than FBA, they are not as accessible to novices or small volume businesses. Rather than following a traditional method, you may need to provide the 3PL with a thorough brief of what you need them to do. Their pricing structure (for example, storage fees) can be exorbitant for merchants with small stock inventories.
When comparing approaches, keep in mind the boost that using FBA and being qualified for Prime will provide to your Amazon listings. Moreover, this isn’t always the case with 3PLs unless they’re efficient enough to qualify you for Seller Fulfilled Prime.
Finally, it’s crucial to remember that sellers are still responsible for the logistics of getting their inventory to the 3PL.
Putting it to good use
There are several distinct types of 3PLs, each with its own specialties and charging schemes. Furthermore, some may have to charge structures that are better suited to low SKU numbers. However, others may specialize in handling luxury items or nutritional supplements.
Note that you must have a clear idea of what you want the 3PL to accomplish. They’ll usually have a big list of add-on services. Therefore, you’ll need to be able to break down the fulfillment process for your products and tell them exactly what you want.
Picking SKUs wisely, especially for multichannel retailers, can be an effective approach to having a plan for leveraging 3PLs. This is not only less expensive than using MCF if your stock is in FBA. However, it also provides you with more scalability for your best goods than you are likely to have in-house. As a result, it may be a good idea to send only your best-performing products to the 3PL.
Consider using a 3PL with a global fulfillment network if you plan to sell internationally. Moreover, if your 3PL has warehouses in other countries, it may be easier to ship your products to international buyers.
In addition, you can ship inventory to their domestic warehouse, and they’ll ship it to their international locations. Instead of having to deal with multiple 3PLs, you’ll only have to deal with one.
Having an intelligent software tool—Asinwiser—for online sellers will assist you to run your business in the right direction. Asinwiser.com is an excellent solution that will help you to target your potential audience with its all-in-one features such as brand story, product research, competitor research, profitability calculator, fba calculator, fba fee calculator and so on.