Everything You Need to Know About 3PL Fulfillment

You're running a growing business, and everything is going great—sales are up, customers are happy, and your brand is gaining traction. 

But behind the scenes, you struggle to keep up with the logistics. Orders are piling up, inventory is becoming a nightmare, and shipping delays are hurting your reputation. 

Breathe, relax!

This is where third-party logistics (3PL) fulfillment comes into play. 3PL services let you focus on what you do best while leaving the tricky logistics to the experts, giving you time to grow your business.

This article will cover everything you need to know about 3PL fulfillment to help you make smart decisions.

What is 3PL Fulfillment?

3PL, or third-party logistics, refers to outsourcing logistics and fulfillment processes to an external service provider. 

Let’s say you run an online store selling clothes. As your business grows, it becomes harder to handle everything on your own. Keeping track of inventory, packing orders, shipping them out, and ensuring they arrive on time.

A 3PL provider takes care of these logistics tasks for you. They have warehouses where they store your products, teams that handle the packing, and shipping companies to get your products delivered. 

They allow you to focus on other aspects of your business, like marketing, while they handle getting your products to customers.

Related: Logistics Problems that Online Stores Face in 2024

Core Services Offered by 3PL Providers

Warehousing:

3PL providers offer secure storage for your products. They have large warehouses to store your inventory until it's time to ship it out. This is especially useful if you don't have the space or resources to manage inventory on your own.

Inventory Management: 

They use advanced systems to track your stock levels, ensuring you always know what’s available and when to reorder. This helps prevent stockouts and overstocking.

Order Fulfillment:

Once an order is placed, the 3PL team picks the items from the warehouse and packs them according to your specifications. They efficiently and safely package products to ensure they arrive in perfect condition.

Shipping and Delivery:

3PL providers have partnerships with various shipping carriers, allowing them to offer competitive rates and faster delivery times. They print shipping labels, pack orders, and ensure everything arrives on time.

They also provide tracking information so both you and your customers can monitor the progress of shipments. This transparency helps improve customer satisfaction.

Returns Management:

Handling returns can be a headache, but 3PL providers take care of this too. They manage the process of receiving returned items, inspecting them, and restocking or disposing them as needed.

Value-Added Services:

Some 3PL providers offer custom packaging services, such as branded boxes or special wrapping. They might also perform quality checks on your products before shipping to ensure they meet your standards.

Benefits of 3PL Fulfillment

Cost Savings:

Handling logistics in-house can get expensive. You have to think about getting a warehouse space, hiring staff, buying packing materials, and even dealing with shipping. All these add up quickly, especially as your business grows.

When you partner with a 3PL provider, they take care of these things for you. They already have the warehouses, the staff, and the systems in place. Since they handle logistics for multiple businesses, they can spread out these costs, saving you money. 

Plus, you only pay for the space and services you use, which can be much more cost-effective than managing everything on your own.

Growth:

As your business grows, so do your logistics needs. Maybe you’re launching a new product or running a promotion, and suddenly, you have way more orders to fulfil. 

If you’re handling logistics alone, you know how tiring this can get.  However, a 3PL provider can handle large orders.

Whether you’re shipping a hundred packages or a thousand, they have the capacity to scale up (or down) as needed. This means you don’t have to worry about hiring more staff or finding extra storage space when things get busy.

Focus on Core Business:

Running a business involves wearing many hats, and logistics is just one of them. Logistics is time-consuming and can distract from other important business areas.

By outsourcing your fulfillment to a 3PL provider, you free up time and resources. Instead of worrying if orders are being packed correctly or if shipments are going out on time, you can focus on growing your business.

Related: Step-by-Step Guide to Starting a Successful Business in Nigeria

Access to Expertise and Technology:

Logistics is not just about getting products from point A to point B. It includes managing inventory, processing orders, shipping, and tracking deliveries.  A good 3PL provider has years of experience and the latest technology to manage all these aspects efficiently.

Better Customer Service:

At the end of the day, happy customers are what every business wants. 3PL providers can help ensure your customers are satisfied by delivering orders accurately and on time. 

Common Misconceptions About 3PL Fulfillment

“3PL is Only for Big Companies”

A lot of people think that only large companies need 3PL services. This is not true at all. Even if you’re running a small or medium-sized business, 3PL can help you save money and time. 

“You Lose Control Over Your Business”

One big worry is that you’ll lose control if you let someone else handle your logistics. This makes sense—it’s a key part of your business. 

But the truth is, most 3PL providers offer tools that let you keep an eye on everything. You can track your inventory, monitor orders, and see where your deliveries are. So, while outsourcing the logistics, you’re still in control, just with less stress.

“3PL is Too Expensive”

Many small business owners think that 3PL services are too costly. But if you look closer, you’ll see that 3PL can save you money. These providers have better shipping rates and can help reduce mistakes that could cost you. 

“All 3PL Providers are the Same”

Some people believe that all 3PL providers are the same, but that’s not true. Different 3PL providers have different strengths. Some are great for eCommerce, while others might specialize in certain industries. 

It's important to find a provider who understands your business and can meet your needs. Do some homework, and you’ll find the right fit.

“You Only Need 3PL When Your Business Grows”

Another common belief is that you only need 3PL services once your business grows rapidly. While it’s true that 3PL can help you manage growth, it is also useful for businesses at any stage. 

A 3PL provider can simplify your operations, allowing you to focus more on growing your business.

“3PL Can’t Handle My Unique Needs”

You might think your business is too unique for a 3PL provider to handle. However many 3PL companies offer customized solutions. The key is to be clear about what you want and work with the provider to find the best solution.

“3PL Isn’t Reliable”

Some worry that using a 3PL provider might lead to missed shipments or poor customer service. While this can happen with a bad provider, most reputable 3PL companies take reliability seriously. 

Their systems ensure your orders are processed and delivered on time. They also have customer service teams ready to handle any issues.

How 3PL Fulfillment Works

Order Management:

Order management is the first step in the 3PL fulfillment process. If someone places an order on your online store, the order details—what was bought, the quantity, and the delivery address—are automatically sent to your 3PL provider. They have systems in place to receive and manage these orders seamlessly.

• Receiving Orders: The 3PL provider gets notified as soon as a customer places an order. They will know exactly what needs to be packed and where it should go.
• Processing Orders: Once the order is received, the 3PL’s system checks if the item is available in the warehouse. If everything is in stock, the order will be packed.

Inventory Management:

Inventory management is all about tracking your stock. A good 3PL provider ensures your products are organized, counted, and ready to ship immediately.

• Storing Products: Your 3PL will keep your products in their warehouse. They organize everything so that it is easy to find and pick items when orders come in.
• Stock Monitoring: They check your inventory levels to know what’s running low and when it’s time to reorder. Some even have systems that automatically alert you or even reorder products for you.

Packing and Shipping:

Once the order is ready and the product is picked from the inventory, it’s time for packing and shipping. 

• Packing: The 3PL provider carefully packs the products, using the right materials to protect them during transit. 
• Labeling: After packing, the package is labeled with the customer’s shipping details. The label includes the address, tracking number, and other necessary shipping information.
• Shipping: Finally, the 3PL hands the package to a carrier (like GIG or DHL), who then delivers it to your customer. The 3PL provider will also update the tracking information so you and your customer can track the delivery status.

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Handling Returns:

Returns are a normal part of business, and a good 3PL provider makes handling them as painless as possible.

• Receiving Returns: When a customer returns a product, the 3PL accepts it back at its warehouse and inspects the returned item to determine its condition.
• Processing Returns: If the item is in good condition, they restock it into your inventory. If it’s damaged or defective, they might dispose of it or send it back to you, depending on your preferences.
• Refunds or Exchanges: Some 3PLs assist with processing refunds or sending out replacement products.

Key Factors to Consider When Selecting a 3PL

Industry Expertise:

Think about it this way: you wouldn’t ask a tailor to fix your car, right? The same logic applies when choosing a 3PL provider. You want a partner who knows your industry inside and out. 

A 3PL with industry expertise will understand your unique challenges and offer solutions tailored to your needs.

Technology Capabilities:

The right 3PL should have advanced technology that integrates seamlessly with your systems. This includes inventory management software, order tracking systems, and data analytics. 

Good technology allows you to monitor your inventory in real time, track shipments, and make data-driven decisions. It also helps to streamline operations, reduce errors, and improve efficiency. 

Pro Tip: Ask the 3PL about the tech they use and make sure it meets your business needs.

Location and Infrastructure:

Imagine your customers are mostly in Lagos, but your 3PL’s warehouse is in Kano. That distance could lead to longer delivery times and higher shipping costs. The location of your 3PL’s warehouses and distribution centers matters a lot. 

You want your 3PL to be close to your key markets to ensure quick deliveries and lower costs. Also, check out their infrastructure.

Are their warehouses modern and well-equipped? Do they have the capacity to handle your business as it grows? These are important questions to ask.

(https://blog.heroshe.com/choose-the-right-shipping-company/)

Pricing and Contract Terms:

Money matters. You need to understand the pricing structure of the 3PL. Some charge a flat fee, while others might bill you based on the number of orders or the volume of goods. Ensure you know exactly what you’re paying for—are there hidden fees? 

Also, look closely at the contract terms. How long is the contract? Is there flexibility to scale up or down? What happens if things don’t work out? Knowing this helps you avoid a long-term contract that doesn’t suit your business.

Reputation and Customer Reviews:

Finally, reputation is everything. Like checking reviews before buying a product online, you should do the same when choosing a 3PL.

Look at what other businesses are saying about them. Are their customers happy? Do they deliver on their promises? 

You can find reviews online, but you should also ask the 3PL for references. Talk to other businesses in your industry and get their honest opinions. A 3PL with a solid reputation is more likely to be reliable and provide the level of service you need.

Common Challenges Faced by Businesses Using 3PL Services

Inventory Management Issues:

When your stock is stored and managed by an external partner, there's always a risk of things going wrong. Mismanaged inventory can lead to stockouts, overstocking, or even lost items, hurting your bottom line.

Shipping Delays:

Shipping delays are another major headache. Once your products leave your warehouse, you rely on your 3PL provider to get them to your customers on time. But delays can happen if your 3PL partner isn’t efficient or they’re dealing with high volumes. 

Returns Processing:

Handling returns is a complex process; when a 3PL provider is involved, it can become even more challenging. The process needs to be quick and efficient to ensure customer satisfaction, but this isn’t always the case. Confusion or delays in processing returns can lead to unhappy customers and potential loss of business.

Strategies for Overcoming These Challenges

Effective Communication and Collaboration:

Good communication is the foundation of any successful partnership. Regular check-ins, clear expectations, and open channels for feedback can help prevent many issues from arising. 

Ensure you and your 3PL provider are on the same page about goals, processes, and expectations. Use technology, like real-time tracking tools, to stay updated on your inventory and shipments.

Performance Metrics and KPIs:

Establish clear performance metrics and key performance indicators (KPIs) to ensure your 3PL provider meets your standards. 

These could include metrics like order accuracy, on-time delivery rates, and inventory accuracy. Regularly review these metrics with your 3PL partner and discuss areas for improvement.

Contingency Planning:

No matter how well you plan, things can still go wrong. That’s why it’s crucial to have contingency plans in place. Always have a plan B as it can save you a lot of trouble when unexpected problems arise.

Risk Management:

Risk management is about identifying potential risks and finding ways to minimize their impact. Regarding 3PL, this might mean having different providers, so you’re not relying on just one partner.

It also means investing in insurance or working with a 3PL provider with a strong track record.

How Heroshe's Services Can Boost Your 3PL Fulfillment

While 3PL providers handle many logistics tasks, Heroshe offers specialized services that can be a great addition to your strategy, especially if you’re shipping goods to Nigeria. 

Here’s how we fit into your logistics plan:

Simplifying International Shipping:

Do you have products coming from the U.K., U.S., or China? We’ve got you covered. At Heroshe, we handle all the tricky parts of international shipping—customs, paperwork, and delivery. 

This means you don’t have to worry about the complexities of cross-border logistics. Just let us take care of getting your goods from those countries to Nigeria.

Related: How to Sign Up and Use Heroshe for Your Shipping Needs

Keeping Your Customers Happy:

Reliable delivery is key to keeping your customers satisfied. With Heroshe, your international shipments will reach Nigeria on time and in great shape. 

We ensure everything runs smoothly so you can focus on delighting your customers and growing your business.

Working Easily with Your 3PL Provider:

Already have a 3PL provider for local logistics? Perfect! You can use Heroshe alongside them. 

While your 3PL handles local warehousing and delivery within Nigeria, we handle getting your products from overseas into the country. 

Cost-Effective Shipping:

We know shipping can be expensive, but with Heroshe, you can benefit from competitive rates for international shipping. Our services help you save on cross-border shipping costs and simplify your logistics to get more value for your money.

Related: The Cheapest Way to Ship from the U.S. to Nigeria

Expert Customs Handling:

Customs can be a headache, but not with us. We have the know-how to navigate customs procedures and avoid delays. We ensure your shipments clear customs smoothly, keeping your products moving without unnecessary hold-ups.

Focus on What You Do Best

With Heroshe taking care of your international shipping logistics, you have more time to focus on what matters most—your customers and business goals. Sign up on Heroshe now to get started.

Conclusion

Logistics can be a tough challenge, but it can become much easier with the right support. Third-party logistics (3PL) providers are a great way to manage your shipping, inventory, and order fulfillment, giving you time to focus on growing your business.

And remember, if you’re dealing with international shipments to Nigeria, Heroshe is here to help. We specialize in smoothly and efficiently getting your products from the U.K., U.S., and China into Nigeria. 

So, take a closer look at your logistics needs and consider how Heroshe and a reliable 3PL provider can work together to support your growth. 

Cheers to love and swift delivery.