How Does a 3PL Help E-Commerce Sellers with Supply Chain?
On the back end of the supply chain, your 3PL will be the primary partner who pushes products to the finish line via direct-to-consumer order fulfilment. Alternatively, they can also store inventory or ship inventory to fulfilment centers owned by Amazon, Walmart or Shopify. This takes your garage out of the supply chain equation. No storage at home. No fulfilment from your fair room. You are partnering with logistics professionals who will manage your business’s products.
When to Pick a 3PL for E-Commerce Sellers?
Choose a 3PL When It’s Time to Scale Fulfilment and Reclaim Supply Chain Partners
So back to the topic of when do you need a 3PL. In short, when you’re ready to scale fulfilment out of your garage. And when you’re ready to take over your supply chain.
Here’s a familiar scenario which lots of sellers find themselves in. Sellers need less overhead to scale up operations. They also want cheaper shipping and bigger shipments.
A seller needs to research, analyze and pick supply chain partners who will work in tandem to move quickly and keep costs low. So, sellers pair together a freight forwarder & 3PL warehouse to complete delivery of cargo from China to the US.
Here’s how that looks…Let’s say you found a freight forwarder on a Facebook group. They offer competitive rates. You like their level of service. You decide to trust them with end-to-end delivery to a 3PL. Great. The shipment gets booked. The products get delivered. The 3PL warehouse receives, stores, and inventories shipment. Congratulations, your garage is clean of inventory. You’ve reclaimed control of your front end supply chain partners. But that’s not all…
Now you’re no longer fulfilling 100-500 orders per day. You no longer have any overhead expenses, no employees, no equipment. You’ve completely transitioned into working with a 3PL to scale up your warehousing access and fulfilment services. So in addition to finding front end supply chain partners, you’ve now got a back end supply chain partner as well.
3PL Basics – Receiving, Storage & Forwarding
Know the fundamentals of a 3PL for e-commerce sellers. That includes services involving receiving, inventory storage, and forwarding. A good 3PL will accept cartons, pallets or containers at a time. They will provide affordable storage – between $20-49 per pallet, per month. They offer a sound inventory management solution. Lastly, they can offer quick turn around on inventory replenishment requests to Amazon or Shopify fulfillment centers. Any 3PL worth its weight can offer these basic services. However, not every 3PL delivers the same order fulfilment services.
What 3PL’s Want From E-Commerce Sellers
3PL’s want easy clients! Not headaches. While 3PL’s offer solutions to most supply chain requests – they prefer to stick to the basics. Here’s what that looks like:
FBA Prep Products In China
A good 3PL offers FBA product prep. But a smart seller does prep with a supplier, not a warehouse down the chain. Make sure you prep as much as you can with the manufacturer. 3PL’s will definitely upsell prep services, but sometimes less is more. The last thing you want to deal with is a 3PL who tries to fire you by charging way too much for their services.
Build FBA Shipment in China
Want to really make a 3PL’s job easy? If it makes sense to, build your FBA shipment in tandem with the supplier. Have them FBA label your cartons. When your goods get to a 3PL team, they only need to cross-dock the cartons. This is a clean, easy, in-and-out process for 3PL’s. It’s quick money. It’s low risk. It puts you in their good graces, if you ever need that little extra support with little added cost.
Use Amazon Compliant Wooden Pallets
Nothing is more frustrating that receiving beat up, broken down, and all around non-functional pallets. When your goods get palletized at a Container Freight Station, the warehouse there uses the cheapest or quickest available option to them. Usually the pick pallets that are missing planks, defunct, riddled with rusty nails etc…This is not Amazon compliant. 3PL’s cannot use these pallets. As such, you will get charged (for a second time now) for pallets, because 3PL’s will ditch the first set from the CFS. Ensure that your pallets are good quality wood, 48 x 40″ in LxW, and have 4 way access to them. Otherwise, its a headache for 3PL teams to break down LTL shipments simply because they cant move the pallets in the state in which they were delivered. Shame!
A 3rd Party Logistics Partner (3PL) for e-commerce sellers provides value in several key areas. Yes they can coordinate front-end supply chain solutions. But more importantly, how do they position your product’s last leg product distribution. Here’s a list of questions to answer when shopping 3PL’s
3PL Order Fulfilment Questions
- What level of in-house order fulfilment does a 3PL for e-commerce sellers provide?
- Do they offer multi-channel fulfilment?
- Do the utilize a order management software system?
- Does it integrate with a warehouse management system?
- Do either plug and play with your API integrations used by yourself for inventory management?
- How big is their warehouse?
- How big is their team?
- How long have they been around?
- What is the turn around time on orders?
- What are their customer returns policies?
- Which channels do they provide order fulfilment on?
- How is shipping charged?
- What are the B2C shipping costs?
- What are materials costs?
Again, experience is key here. But figuring out the right 3PL for e-commerce sellers can save a lot of money in the long run. Often, sellers don’t have the benefit of time to research every 3PL when their products are on the water. So check out our answers to the questions above: