Why Businesses ChooseE-Commerce Fulfillment Through Third-Party Logistics Providers

Partnering with a comprehensive 3PL provider means your business's e-commerce fulfillment is fully taken care of. This includes warehousing, Amazon prep, pick-and-pack, kitting, handling returns, and ensuring that your merchandise arrives quickly to your customer.

Leveraging a 3PL provider for e-commerce fulfillment means you don't have to spend time negotiating with shippers or packing and storage facilities. Instead, you get to focus on marketing, developing your product range, and scaling up your business.

Using a 3PL provider also lets you spend more time tracking and reacting to market changes and opportunities. You can then effectively scale your business up or down through your 3PL provider for optimized business agility. This is why 90% of Fortune 500 companies in the USA leverage 3PL providers to take care of their supply chain needs.

Leveraging the Changing E-Commerce Environment

According to the International TradeAdministration (ITA), e-commerce sales are taking up a much larger share of the total retail market and will keep increasing for some years. In 2019, before the pandemic took hold, global e-commerce sales totaled USD 3.354 trillion.

ITA data shows that once the pandemic encouraged people to shop online instead of in stores, 2020's figure grew substantially to USD 4.28trillion. It then grew to USD 4.891 trillion in 2021, and 2022's forecast estimates USD 5.424 trillion in global e-commerce sales. The ITA expects global e-commerce sales to reach USD 6.388 trillion in 2024. From 2019 to 2021 in theUSA, e-commerce sales increasedby 50.5%, highlighting the opportunities in e-commerce markets. 

Chart: Retail e-commerce sales worldwide from 2014 to 2024 (in billion USD)

(Chart retrieved from the International TradeAdministration)

Increasing domestic and global e-commerce sales gives e-commerce businesses an excellent opportunity to scale their businesses for optimum results in a growing market. 3PL providers allow you to leverage this opportunity because they can take care of e-commerce fulfillment, Amazon prep, pick-and-pack, kitting, distribution, warehousing, and more.

Three Key Third-PartyLogistics Services for E-Commerce and Amazon Businesses

Essential 3PL services e-commerce and Amazon businesses should look for include:

E-CommerceFulfillment Services

E-commerce fulfillment covers receiving, storage, picking and packing, and shipping products directly to your customers.

3PL providers that offer complete e-commerce fulfillment services provide e-commerce businesses with real-time inventory counts and printing and labeling services. They also assemble multiple products into one package (kitting) for customers who order multiple items from your store. 3PL providers then ship your products domestically and internationally, often at discounted rates.

On-Demand PrintingServices

All your products need to receive the appropriate marketing labeling, which can increase costs when they come from a separate printing and labeling vendor. E-commerce businesses benefit significantly from3PL providers offering on-site printing services in addition to warehousing and fulfillment services.

On-demand, on-site printing and labeling services reduce labeling transportation costs and waste while helping the 3PL provider find the best approach to printing and labeling for your products. It also means you reduce the number of vendors you need to communicate with, optimizing how you spend your time.

Amazon PrepServices

Amazon has its own unique set of FBA (fulfillment byAmazon) requirements, so you might need to take extra steps to avoid interruptions and long lead times.

An effective 3PL provider can guide you through Amazon prep compliance. Then they will bring all your packaging and labeling up to the appropriate standards for every order, so your workload stays the same. Instead of moving inventory between different packaging service vendors, you partnerwith a 3PL that does both under one roof.

The ChallengesThird-Party Logistics Providers Solve for E-Commerce Businesses

E-commerce and Amazon businesses that partner with a 3PL provider enjoy reduced lead times between an order's placement and the customer receiving their product. 3PL providers also generate a wide range of cost-saving opportunities, allowing e-commerce businesses to stay competitive.

Below are the three most common e-commerce challenges that third-party logistics providers alleviate:

3PLs Reduce Storage and Shipping Costs for E-Commerce Businesses

Storage and shipping are two of the most significant expenses faced in e-commerce. Because 3PLs specialize in shipping logistics, they have relationships with carriers that lead to lower shipping prices and faster booking times. They also reduce storage expenses for your business as you won't need to rent or maintain an entire warehousing site on your own.

You Won't Need toBecome a Logistics and Fulfillment Expert 

Partnering with a 3PL means you leverage their expertise and use it to benefit your business without spending months learning about logistics. You will have access to trained experts who know the most efficient ways to store, pack, and transport your products for reduced lead times and improved customer experiences.

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Conclusion

You Will Overcome the Challenges of Scaling a Business If you need clarification on international shipping laws, a 3PL can ensure that your shipments comply with the relevant laws and regulations. They can also ensure that packaging complies with the rules of specific platforms, helping you reach more customers confidently, increase revenue, and scale your business up.Optimizing order fulfillment, pick and pack, kitting, Amazon prep, distribution, and more in a product's journey to your customer's door is the best way to grow a valuable e-commerce business.

To find out what experts with 27+ years of industry experience in third-party logistics can offer your business, contact our team at All Points today.

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