What is 3PL?
3PL stands for "third party logistics". This is where the inventory storage, management and fulfilment process of ecommerce is handled by a third party, who has better capacity to store a varied inventory, and take care of the picking, packing, dispatch of orders & returns.
This is advantageous for businesses who alone may not have the space, staff, or skills to navigate increasingly complex logistics processes. It is also helpful for businesses who have seen a sudden surge in orders and have ran out of the capacity to fulfil these orders in house.
What does a 3PL do?
This depends on what services are required, there are many options to choose from, however commonly a 3PL provider will provide some or all of the following:
- Inventory management
- Order Picking
- Order tracking
- Delivery to customer
- Returns management
What is the benefit of using a 3PL?
One of the core benefits of partnering with a third party logistics provider is that they can give the customer what they want whilst leaving the business to do what they do best, whether that be designing, manufacturing, or even marketing.
Customers tend to want:
- Swift delivery of their orders
- To get exactly what they've paid for
- For any problems with the order/product to be resolved lightning fast.
- A speedy returns & refunds process
The 3PL also gives businesses what they want:
- Satisfied customers through improved delivery/returns process
- Access to technology & expertise
- Better inventory management
- Simple scalability for busy periods or growth
- More time to focus on the business instead of logistics
How does the process of partnering with a 3PL provider work?
The 3PL provider uses their software to integrate their management system with the clients ecommerce store(s). Most popular ecommerce platforms such as ebay, magento, woocommerce, shopify, and even etsy can be linked quite easily.
Stock is then sent to the 3PL's warehouse, where it is scanned & stored. When an order is placed on the ecommerce store, the 3PL's software automatically receives the order details. The warehouse staff can then quickly get to processing, picking and packing orders as soon as they are placed.
Some of the software available even allows for clients to see timestamps of when their orders are being picked or packed. This high level of detail in product location and tracking highlights how improved technology and data collection is one of the key benefits of partnering with a third party logistics provider.
Services such as gift wrapping, kitting and assembly, cold storage, custom packaging, and many more are used by 3PL's to add unique value for their customers. The business of third party logistics can be very competitive, so without a differentiator to set a particular 3PL service apart from the rest, it may be difficult for them to acquire and retain clients.
What sort of equipment do 3PL's need?
Below is an overview of products manufactured in our UK factory that we regularly provide to 3PL operations.
To ensure orders are packed quickly most warehouses have packing stations. These keep the boxes and other packaging close by and also tidy. Packing stations often include monitor arms, keyboard trays, shelving, dividers, electrical sockets, lighting, signal lights & more. The better designed the packing area is, the more efficient it will be.
The belt conveyor is the ideal solution for transporting a wide variety of items in all shapes and sizes. It is a gentle method of transport which helps keep products safe whilst they're being transported. Often packing benches are situated alongside a belt conveyor, which carries off packed orders to the dispatch area.
There are many types of roller conveyor, included powered and unpowered varieties. The unpowered type is called a gravity conveyor, which products are either rolled down or pushed along on. Roller conveyors are useful for transporting totes, boxes, cartons, pallets, and trays. They're not so good for moving smaller packets and irregular shaped objects.
For transporting items around the warehouse space to and from the storage areas. Trolleys of all different shapes and sizes are used depending on the scale of the warehouse and the items being transported.
Getting the right weights of items is important, inaccurate weights of parcels can lead to an increase in carriage costs. This can add up very quickly when handling thousands of parcels a day.
If there is a problem in the warehouse, these lights let others know. These are often integrated on packing stations, so packers can signal to a supervisor if they're facing an issue with an order, or need further supplies
Expandable conveyors are a type of roller conveyor that is able to expand and flex as required. They're ideal for situations where a conveyor needs quick repositioning, such as when taking deliveries or loading vehicles.
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