What is a 3PL Company?

Third-party logistics are getting a lot of buzz for being a vital next step forward for shops of all sizes. But what is the real extent of what a third-party logistics company does?

What Is a 3PL Company

An Introduction to Third Party Logistics

Third party logistics is the name for outsourcing your company’s fulfillment and similar responsibilities to a specialist company. You can warehouse your company’s inventory at the 3PL provider’s location so that they dispatch it for you when an order is made. Many 3PL providers also provide returns management (also known as reverse logistics), where they will efficiently process a return, and if possible, repack and return it to stock for future dispatch. Another field that 3PL companies are able to assist in is mail services, since they already participate in shipping to a significant extent. If you are interested in pursuing direct mail marketing, for example, you would do well to inquire with a 3PL provider to see what they can do for you.

Ecommerce Fulfillment

Since so much of ecommerce is about providing a more efficient service than brick-and-mortar shopping experiences, it’s no surprise that many ecommerce stores turn to 3PL companies to improve upon their warehousing, order processing, and shipping operations. Generally, it makes sense to work with a 3PL provider to store your wares, as they will make efficient use of the space you need and charge you only for that, instead of trying to find storage that suits your current and potential future requirements while not breaking the bank. Effective 3PL companies offer technologically sophisticated solutions to manage your customers’ transactions from the moment they submit payment details, integrating with your existing ecommerce system and enabling you to observe the fulfillment process in real-time with complete access to operational information regarding your outgoing orders.

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Returns Management

With up to 30% of some companies’ transactions consisting of returns, having an effective and well-structured returns process in place is vital. This can be a challenge for some companies to manage internally without making expensive investments in specialist equipment and staff, however, so it’s not surprising that 3PL companies provide this service to many companies. Through measures such as smart labels, and connecting with secondary market sellers, top 3PL firms will optimize the returns process to make it as efficient and beneficial to all parties as possible. That way, you preserve the trust and goodwill of your customer while also minimizing costs.

Mail Services

Sending out mailers, managing mailing lists, and special services such as shrink-wrapping or poly bagging are often taxing and time-consuming activities. But far less so for 3PL companies, which specialize in doing the above in bulk, in addition to other mail room services. If you need catalogs, brochures, flyers, magazines, postcards, packages, or other mail materials printed and sent, you should trust a 3PL company to do it cheaper. After all, they buy in bulk to cover their many clients, so it only stands to reason they can get you a better price and dispatch them more economically as well.

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