Third Party Logistic Providers is sometimes also referred to as 3PL and is commonly used by ecommerce businesses. A third-party logistic providers manages inbound and outbound transportation for its clients, as well as warehousing. This enables ecommerce businesses to focus on other things, such as sales, marketing, business development, etc. Whilst businesses have been using 3PL for many years, it has boomed over the last decade or so as eCommerce has become more and more popular with consumers.
The order fulfillment process
There are a number of different steps involved in the order fulfillment process that 3PL providers partake in. These are listed below in the order that they happen in.
- Receiving – the business sends all or some of their stock to the 3PL and they receive it. The exact way in which this is done varies from provider to provider, although they all follow a similar format. The 3PL keeps an up-to-date inventory list of what stock they have received and how much they are holding in total.
- Warehousing – upon receiving the goods, a 3PL stores them in a warehousing facility that they have. Each of the dedicated SKUs that a provider receives has its very own location where it is stored within a facility so that once an order has been received for it, it can be easily picked. Different 3PL providers have different storage capacities and so it is important for businesses to be aware of this before committing to using a particular one.
- Picking – After a sale has been made, the 3PL provider is automatically made aware of this and then it is their job to pick the product from out of their warehouse facility and then prepare it for its onward journey.
- Packing – The first step of this onward journey is packing the order, which includes adding a postage label that contains the customer’s postal address. Usually this involves placing the item, whatever that may be (e.g. a lightbulb) into an unbranded cardboard box, then filling it with bubble wrap or something similar in order to keep the product safe and secure until it reaches its destination. Some providers do allow for custom packaging materials to be used.
- Shipping – the final step in the order fulfillment process is shipping the product to the customer. Most 3PLs have couriers that they prefer to work with so it is important for businesses to be aware of who will actually be delivering their orders before committing to work with one. The integration of technology means that the process between the 3PL and the courier is a smooth one that does not impact on delivery times.
- Returns – when a customer decides to return an item that they have purchased via a 3PL, it is the responsibility of the provider to also handle this. This can be done in a number of different ways and it is important that businesses are aware of how returns are handled so that they can disseminate this information to their customers.