What is 3PL Distribution? How Distributed Warehouses & Fulfillment Network Operated by 3PLs Accelerates eCommerce & D2C Growth in 2022?
It’s not always practical for eCommerce organisations to handle everything internally because there are many operational duties to keep track of. In these situations, brands frequently contract with a 3PL or third party logistics service provider.
But choosing the best 3PL for your company can be challenging because there are many factors to consider. For example, eCommerce businesses should constantly assess a 3PL candidate’s distribution network or the quantity and locations of the 3PL’s warehouses and fulfilment centres.
A 3PL’s distribution network’s scale and breadth are more crucial for an eCommerce company than you realise because they directly impact your company’s shipping prices, 2-day delivery options, and future scalability.
To position, your business for success, look for a 3PL partner with a distribution network that matches your vision and aids your brand in achieving its goals.
In this article, you will learn what 3PL distribution services are, why working with a third party distribution partner with a distributed network of warehouses is essential, and how WareIQ’s fulfilment network supports business growth.
- What is 3PL Distribution Service?
- Operational Process Of A Third Party Distribution Service Centre
- How Distribution Warehouses Network Operated by 3PLs Benefit DTC and eCommerce Growth?
- 6 Factors to Consider When Choosing a 3PL for eCommerce Fulfillment and Distribution
- WareIQ As Your Fulfilment and 3PL Distribution Partner
- Frequently Asked Questions
What is 3PL Distribution Service?
Delivery or sales of goods and services to clients from a producer or manufacturer is known as distribution. Expanding distribution network is essential as firms grow into new markets to ensure that goods reach customers promptly and safely. For a seamless operation, adequate coordination between all partners participating in the distribution channel is necessary.
Third party distribution or 3PL distribution are the services in eCommerce businesses, such as outsourcing distribution and fulfilment services to a third-party organisation.
3PL provider specialises in logistics and distribution services to assist your business operations.
When examining 3PLs explicitly in the context of distribution, they encompass a wide range of services, including pick and pack, eCommerce fulfillment, shipping centres, processing, labelling and ticketing, warehousing, customised bundling, quality control, and inventory management. As a result, businesses can improve performance and supply chain management and get insight into a complicated industry using a 3PL distribution solution.
By partnering with organisations like WareIQ for all your fulfillment and distribution needs, you can anticipate superior distribution services that meet your consumer needs.
Alternatively you can choose the contract logistics service option too. Read here now.
The Importance of 3PL Distribution Services
Any business activity needs a distribution network to be successful. Any industry that wants to provide the most satisfactory service to its consumers must ensure a good relationship with the manufacturers. This cannot be done without effective distribution services. If the system has flaws, deliveries will not be made as planned, which would anger consumers, suppliers, and vendors and cause them to lose faith in the business.
Utilizing a 3PL distribution provider can significantly benefit a retail organization. Working with a reliable 3PL and managing your supply chain effectively will give you a competitive edge because your shipping procedure will be faster and more precise. Using a 3PL distribution service allows shippers to avoid overhead costs like leasing or to buy property, investing in equipment, and paying employees. Cost savings are widespread because numerous accounts share infrastructure, resources, and personnel. For merchants, a reliable 3PL distribution service is essential since it enables skilled people to handle the challenging process.
Working with a 3PL provider for distribution will help you streamline the entire process and will help you keep ahead of the competition in your sector. In addition, a 3PL can take over the process and make informed decisions at each step because most people in the retail industry are not experts in supply chain logistics. As a result, retail organisations can save money, gain flexibility, and improve their overall operations when they have professional assistance to streamline their supply chain processes.
Distribution service firms must maintain a continuous feedback procedure to ensure that all their workers are happy and those necessary adjustments can be made. For some online delivery services, clients won’t see the product until after they buy it, relying instead on the offered photographs and descriptions. As a result, distribution services must link them and create trustworthy relationships to be sincere and compelling.
To ensure a successful distribution system, consider the following:
- An effective network of transportation to get the items to all the destinations.
- A trustworthy tracking system guarantees that the intended recipient receives the right products on time.
- A suitable packaging method that ensures the integrity of the goods throughout transportation.
- A readily available storage area where the goods can be kept for simple distribution.
- A reverse logistics service to guarantee the highest level of client satisfaction.
Operational Process Of A Third Party Distribution Service Centre
Providing third party distribution services requires carrying out a number of criteria, including:
The services must have a strategy for adequately delivering orders as soon as they are received from manufacturers or customers. It entails gathering the supplies, packing and loading them, and delivering them on schedule.
Packaging and Shipping
It’s crucial to provide the best packaging possible for any good to ensure that the final consumer receives it in perfect condition. Building consumer trust requires them to deliver flexible pick-up, package, and top-notch transportation services. Care must be taken with each order to foster strong, long-lasting bonds with both customers and producers. Each intended delivery package must have accurate invoices and shipping labels attached. These procedures will assist a business in producing quality results.
Customs and Import Services
As the company expands internationally, global distribution becomes increasingly essential. A professional and trustworthy distribution involves the efficient management of customs and the associated import/export process, which helps you satisfy all trade regulations and guidelines effectively. This guarantees that your items cross borders without any difficulties.
Distribution of goods strongly depends on keeping a good amount of inventory under control. To meet the necessary needs for assuring prompt stock renewal and ideal delivery, this necessitates a perfect site. They will make sure that things are strategically positioned to efficiently disseminate to all the portions of planned locations if they have good, easily accessible storage space.
To ensure that both manufacturers and customers are informed of the delivery schedules for their products, a reliable tracking system must be in place to monitor the status of the delivery and distribution process.
For all orders, selecting the mode of transportation is crucial. Loading and unloading for larger orders should be carefully managed, so they do not cause issues later. They should have all the agreements prepared to secure all the approvals if the delivery is abroad. They must plan an efficient route and the necessary types of transportation for local delivery. Businesses can stay competitive by being flexible in their delivery options and satisfying customer demands.
Clear communication must be on both ends to guarantee that the right things are dispatched and that customers are informed of the delivery timetables. In addition, distribution service management must notify all parties involved if a shipment is delayed for any unavoidable cause.
Returns are a crucial component of the distribution cycle for any goods to guarantee customer satisfaction. The distribution process entails getting the commodities to their final destination and returning them to where they came from. It is a critical component for businesses since it directly impacts their operational costs, returns on investment, and customer satisfaction levels.
How Distribution Warehouses Network Operated by 3PLs Benefit DTC and eCommerce Growth?
Some third-party distribution companies run their operations out of a single fulfillment facility. Still, more seasoned 3PLs will have a distributed network of fulfillment centres nationwide or abroad.
Partnering with a 3PL distribution operator with a vast distribution and fulfillment network can give eCommerce businesses a significant competitive advantage and accelerate D2C growth.
Here are a few advantages that eCommerce companies can gain from collaborating with a 3PL with a significant distribution network.
Reduce Overall Cost
In contrast to a 3PL distribution centre, you will be charged more significant prices if you approach a distribution centre or warehouse on your terms. Due to their focus on logistics, 3PLs will have a more extensive network than the supply chain department of your business. They will probably be able to provide you with more significant discounts because they probably have more powerful negotiation positions and exclusive connections inside the sector. All of this works to keep your company’s overhead expenditures minimum.
You can also save money by partnering with a 3PL distribution centre and forgoing infrastructure investments. It will provide you access to transportation, storage, and order monitoring technologies, among other things that would otherwise cost a lot of money.
Reach Audiences Worldwide
Global shipping may be tricky and time-consuming for DTC firms who want to grow worldwide because you have to consider import rules and customs processes.
Due to import duties, taxes, and fees that can drive up shipping costs, turn away customers, and harm your earnings or bottom line, it can also be quite expensive.
By enabling you to store merchandise in the nation you’re delivering to, 3PLs with international warehouses lessen these obligations. Orders travel a far shorter distance as a result, which expedites delivery and lowers shipping costs.
Furthermore, your brand can avoid paying various import charges and customs costs that you would otherwise be required to absorb or pass along to the buyer because your inventory is kept locally and never leaves the nation.
Rapid Business Growth
To support business expansion, organisations frequently choose 3PL distribution facilities. A company can quickly expand its fulfilment and distribution reach thanks to the logistical infrastructure a 3PL distribution centre provides.
Hiring a 3PL that already has these things in place is easier than devoting your company’s time and resources to setting up your distribution centre or warehouse, finding and securing new warehouses and storage facilities, and hiring and training new employees to handle the influx of late shipments.
Hopefully, your business will continue to develop, and your 3PL distribution partner will use its network to handle all of your new shipments.
The management of all of these services on your own will become difficult if your organisation is currently expanding. A new small business might have been content handling these services themselves.
Provide Quick Shipping to Satisfy Consumer Demands
Customers now expect lightning-fast shipping for their goods, with more than half of consumers anticipating 2-day delivery, thanks to retail behemoths like Amazon. Smaller DTC businesses can satisfy this expectation thanks to 3PLs with extensive networks of distribution facilities because they optimise physical product distribution.
The correct 3PL can keep different amounts of your inventory because they have access to multiple fulfilment centres. This enables the fulfilment centre closest to the final delivery location to process, fill, and ship an order from the moment it is received.
This drastically reduces the typical transit distance, which leads to noticeably quicker deliveries that boost customer satisfaction.
Improving Customer Satisfaction
All the above advantages will undoubtedly enhance your overall order fulfilment process, resulting in the timely delivery of goods to your clients. As we all know, prompt delivery is one of the main factors in customers returning to a business. Consequently, outsourcing your delivery to a 3PL will enhance your customers’ experiences, ultimately resulting in higher sales.
There may be perceived drawbacks to 3PL, with the main one being the potential loss of some corporate control if your logistics and distribution needs are outsourced.
However, you can alleviate these worries by selecting a reliable 3PL distribution and ensuring a proper inventory management system and timely delivery to clients so that you never again have to be concerned about order fulfilment requirements.
6 Factors to Consider When Choosing a 3PL for eCommerce Fulfillment and Distribution
Is internal eCommerce fulfilment and distribution preventing your company from expanding? If so, you might consider outsourcing these tasks to a 3PL company. However, choosing which 3PL supplier to work with can be challenging. Therefore, we have created a list of 8 things to consider when selecting a 3PL distribution partner to assist with this task.
3PL Partner Capabilities
Because a 3PL supplier is a business partner, their abilities must align with their clients. The 3PL partner must be able to provide the needed services, whether creating bespoke labels or delivering goods within 24 hours. Their technological capabilities are also a part of who they are. Can they integrate with Shopify, WooCommerce, and other clients’ eCommerce platforms? Organize drop-shipping with well-known online merchants. This information is crucial to understand, coupled with whether they manage their warehouse and inventory using cutting-edge technologies.
Organization Structure and Safety
Inefficient warehouse operations cause delays and errors. Can they pick, pack, and ship orders with accuracy and efficiency? The arrangement of their facility will have a direct impact on how dependable they are. A 3PL distribution partner should also adhere to safety regulations to safeguard client goods and warehouse staff. Delays will eventually result from any harm done to merchandise or workers. Before committing, request a physical or virtual tour of the 3PL warehouse to observe how well-kept and organised it is.
Every business partner will receive the proper attention from a reliable 3PL. For example, someone should be present to answer any inquiries potential new clients may have. In addition, clients rely on their 3PL distribution partner to swiftly identify and address any issues that may arise and establish a procedure to ensure they don’t recur.
Current sales volumes and whether the 3PL can handle them are frequently discussed when organisations think about outsourcing e-commerce fulfillment services and distribution. When selecting a service, future sales volume is equally important. If the customer starts to grow or experiences peak seasons, the 3PL distribution partner needs to be ready to handle a heavier workload.
The 3PL must be able to accommodate any unique labels or packaging requirements that a company may have. A 3PL serves as an extension of a firm and helps it retain its reputation among clients. The ideal 3PL distribution partner will offer their clients the same level of dependability and service that their clients would.
Costs, efficiency, and delivery time are significantly influenced by a 3PL distribution partner’s location concerning a potential client’s consumer base. By strategically working with a 3PL in a relevant area, final mile expenses can be reduced. If the 3PL is close to essential highways and shipping hubs, that can also be beneficial.
Any business can succeed or fail to depend on using 3PL distribution services. An effective distribution system suggests that the firm has a better chance to boost sales and beat out the competition. In today’s fiercely competitive market, the business that can strategically penetrate the market with its goods sooner and farther than its rivals will be able to weather market fluctuations and maintain a competitive advantage. It is crucial for any business or service because no amount of clever pricing or product promotions will help if they are not distributed effectively and on time.
The 3PL distribution partner offers a complete collection of distribution services, making it the ideal alternative for freight delivery services. These features include dock drop and pick-up facilities, freight redirection service, separating service, and sort service. In addition, experts collaborate carefully with clients to update their whole supply network through customised distribution strategies, trustworthy storage, and the best product transportation from any place in a secured, monitored, and timely manner that will always put you one step ahead of competition.
WareIQ As Your Fulfilment and 3PL Distribution Partner
WareIQ makes it easier to efficiently distribute your goods across different locations, save shipping costs, and achieve 2-day delivery thanks to the network of fulfilment centres.
With the help of WareIQ’s nationwide fulfilment network, both B2B and B2C firms can quickly and affordably expand their operations across the country.
With our analytics, retailers can determine the best inventory mix for meeting customer demand while preventing stockouts, backorders, and deadstock.
WareIQ, driven by top-tier fulfilment technology, also offers complete visibility into business activities across the distribution network. The skilled experts at WareIQ will handle order processing, fulfilment, and shipping for you. Merchants may monitor real-time inventory levels, trace orders through the supply chain, manage warehouse operations, and more from a single dashboard.
WareIQ also helps you to monitor crucial parameters at each site you use, such as inventory turnover, order accuracy, time in transit, and on-time percentage, to improve your 3PL experience further.
Using this information, you may pinpoint areas for enhancement and enhance supply chain management for achievement at any place you employ.
- Pan India Fulfillment & Darkstore Network: Plug-and-play fulfillment infrastructure with no minimums, which is compliant with Amazon Seller Flex, Flipkart Assured, Myntra and other marketplaces
- Inventory & Network Planning Excellence: Best-in-class AI models for sales forecasting, product segmentation, and inventory management to reduce inventory by 40% and increase revenue by 10%.
- Vertically Integrated Fulfillment Tech Stack: Our Fulfillment Tech Solution supports integrations with 20+ top marketplaces & D2C platforms, and prominent national, regional and hyperlocal couriers, enhancing reach by covering deliveries for 27,000+ pin codes
- Supply Chain Productivity Applications: Integrate a host of supply chain productivity apps with a single-click to your existing CRMs, ERPs & accounting software to manage your logistics workflows from one command center. Use Apps like RTO Shield to get 100% RTO protection, Branded Tracking to turn your order tracking page into a profitable marketing channel, and many more.
Trusted by 300+ top Indian brands, we are helping them accelerate online sales and expedite their growth through a synergistic combination of advanced technology, robust fulfillment infrastructure & seller enablement services!WareIQ is backed by leading global investors including Y Combinator, Funders Club, Flexport, Pioneer Fund, Soma Capital, and Emles Venture Partner.