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What Is 3PL?: Full-Service Provider: Offer An End-To-End Solution That Gets Orders To Your Customers

Third-party logistics (3PL) involves outsourcing logistics functions like warehousing, delivery, and order fulfillment to a third party provider. The 3PL handles inventory storage, order picking/packing/shipping, and return processing using their warehouse management software. Customers pay 3PLs per function used like storage, picking, packing, and shipping. Using a 3PL allows companies to focus on their core business while the 3PL manages logistics and provides data and expertise to improve operations.

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40 views2 pages

What Is 3PL?: Full-Service Provider: Offer An End-To-End Solution That Gets Orders To Your Customers

Third-party logistics (3PL) involves outsourcing logistics functions like warehousing, delivery, and order fulfillment to a third party provider. The 3PL handles inventory storage, order picking/packing/shipping, and return processing using their warehouse management software. Customers pay 3PLs per function used like storage, picking, packing, and shipping. Using a 3PL allows companies to focus on their core business while the 3PL manages logistics and provides data and expertise to improve operations.

Uploaded by

Kim Yen Khuu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What is 3PL?

3PL or third-party logistics is a service that allows you to outsource operational logistics from
warehousing, all the way to delivery and ultimately enables you to focus on other parts of your
business. Third-party logistics covers all services for order fulfillment. They will store your
inventory and integrate your online shop with their system. Once an order is placed in your
online store, they will pick, pack and ship your products. to the end customer. Good 3PL
company will also take care of your reverse logistics and all of this will be easily managed and
tracked through their proprietary warehouse management software. By choosing to work with
a 3PL, online companies relegate the responsibility of shipping and order fulfillment on 3PL
providers.
There are usually 4 things that are being charged in 3PL companies: Storage  Picking 
Packing  Shipping.
When it comes to storage, you have to pay for the space you need for your inventory, and you
also have to pay for the time spent on picking up the products from the shelves or palettes. The
same goes for the packaging part, whereas here you will also pay for extra packaging materials
if you don’t use your own packaging. And lastly, you also have to pay for the shipping of your
order. However, it will really help if you use a warehouse or multiple warehouse locations that
are in proximity to your customers because that will significantly cut down the shipping costs
and time.
What does a 3PL company do?
 Receiving parcels, pallets, or cartons
 Storing your units in a safe environment
 Pepping and shipping boxes or pallets to fulfillment centers
 Providing fulfillments by merchants (FBM) services
 Accepting removal order and returns for inspection.
 Freight forwarding
Types of 3PLs?
Full-service provider: offer an end-to-end solution that gets orders to your customers
easily and quickly. With a vast network of strategically located fulfillment centers
nationwide, full-service 3PLs will make sure you have the right merchandise at the right
location so orders ship faster and cheaper.
3PL warehouses: When choosing a 3PL warehouse, determine how many distribution
centers you’ll have access to. You’ll need a larger network of warehouses if you
promise customers expedited delivery. Shipping speed hinges on warehouses being
geographically close to your customers. It’s also important to find out the time at which
your warehouse stops fulfilling the day’s orders.
Transportation-based 3PLs: shuttle goods between locations. For example, they
might transport inventory between your factory and warehouse. They could also transfer
stock between your store and a retail buyer. And there are many types of transportation-
based 3PLs like: traditional parcel transportation providers, same-day delivery by local
couriers and transportation marketplaces
Financial- and information-based 3PLs: a financial- or information-based 3PL
company gives internal controls on tasks like freight auditing, cost accounting, and
inventory management to ensure consistency.
What are the advantages of using a 3PL?
1. Cost reduction and mitigate risk
2. Provide a better customer experience
3. Gain instant expertise and knowledge in the field
4. Get a handle on international logistics
5. Real-time data reports give you a better business insight.
6. Flexible shipping fosters exceeding customers’ expectations.
7. Optimized returns and fast shipping bolster buying intentions.
8. Turn fixed into variable costs and scale up your business.

Drawbacks of 3PL:
1. Lesser direct control over the delivery process
2. Larger upfront investment
3. More distance between you and your products
4. Potential loss of reputation
5. Cost could be higher than having
Here's Everything You Need to Know About 3PLs - AiHello Documentation

3PL (2022): What is a Third-Party Logistics Partner? (shopify.com)

https://youtu.be/g3RP_kaWcDQ
What is a 3PL? Third-Party Logistics Definition, Process, & Resources (redstagfulfillment.com)

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