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What Is The Definition Of Third-Party Logistics (3PL)?

When your business is growing, there’s always too much to do and not nearly enough time to do it — that’s why so many thriving businesses partner with a 3rd party logistics, or 3PL, company.

Just what that means, though, is often up for debate. Some companies may believe they already have a 3PL relationship if they have a contract with UPS to collect their packages now and then. Although this is certainly a 3rd party relationship, a 3PL is much more than just shipping.

What a 3PL Does Do

What a 3PL does and what a 3PL is are questions that are tightly linked. In fact, you can’t answer one without answering the other. A 3PL is a company that can handle every step of your logistics process, from order-taking to distribution and restocking your warehouse.

Here are just a few services that 3PLs offer:

Order Fulfillment. 3PLs are uniquely situated to take charge of your products from the order stage onward, if that’s what you need. They can accept incoming orders, ensure that the products are accurately deducted from your inventory management system and shipped to their final destination.

Warehousing. When you put your 3PL in charge of your pick, pack and ship process, they naturally have to take over warehousing. This is actually great news for your business — no matter how much or how little space you need for storage, these flexible facilities will provide and they only charge you for what you use each month.

Product Distribution. Most companies focus on distribution when they think of a 3PL, this is because it’s a very important part of what they do. But distribution means more than contacting UPS to pick up a few boxes — a 3PL shops prices, negotiates contracts and finds the best deals for every client. International shipping is no problem, as they have the experience necessary to navigate the trickiest international shipping networks.

Reverse Logistics. No matter how good your ordering system is or how accurate your 3PL, you’ll occasionally have to deal with time consuming returns. That’s no problem, your 3PL can handle returns, too. Under your specific instructions, they’ll correct mistakes and make it easy for your customers to send back their unwanted merchandise.

Now that you know what a 3PL does, it’s easier to see what a 3PL is: it’s a company that can handle any or all of your fulfillment and distribution needs so you can keep on doing what you do best. When you partner with a 3PL, you can focus on improving customer service, expanding your catalog or creating new and exciting products never before seen by your clients. It’s can be a great way to grow your business without spending a lot of money.


December 01, 2015
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