Customer experience is everything.
Leaders at any size ecommerce business will tell you that customer satisfaction is a top priority, if not THE top priority. These same leaders know that nothing keeps a customer happier than getting their favorite products quickly and efficiently.
So it makes sense that making sure that orders are delivered accurately, on time, and at a reasonable cost is at the core of any business operation.
Mistakes made in logistics can damage customer experience, stunt business’ growth, and decrease profits. By partnering with a third-party logistics provider, also known as a 3PL, companies proactively alleviate many of these issues.
What is third party logistics (3PL)?
Third-party-logistics is outsourcing the supply chain operations and logistics involved in getting a company’s products to their customer. This process, also known as the fulfillment process, includes receiving, storing, picking, packing, and shipping services. Some 3PL’s also offer value added services like inventory management, kitting and assembly, specialty packaging, and more.
Partnering with an experienced 3PL can mean significant benefits for a business as it grows and faces more complex supply-chain management and logistics challenges.
A 3PL’s experience makes the fulfillment process simpler, quicker, and more cost effective for the manufacturer or merchant. Businesses that outsource to a 3PL can then focus more on their core business goals. The topics below illustrate what a typical 3PL might handle for a manufacturer or merchant.
Core Services Offered by a 3PL:
A 3PL’s warehouse will receive a company’s products and then store them until they are shipped to a customer. The size of each individual 3PL dictates how much capacity they have to store products. Manufacturers and merchants should work with a 3PL that has the warehouse space to not only receive and store the company’s current product output, but be able to expand as the company grows.
Every product received at the warehouse will have its own SKU (stock keeping unit) number, as well as a dedicated location in the warehouse. During the receiving process, the 3PL will confirm the SKUs received and verify that it matches the Purchase Order (PO).
Specific products may have specific storage and handling regulations and requirements to consider including temperature and humidity requirements, certifications and trainings, and security of items.
Once product has been received by a 3PL, the picking stage of the fulfillment process can begin. When a customer places an order it gets sent electronically to the warehouse where the item ordered is being stored.
Some 3PLs require orders to be uploaded manually into their system. This can be time consuming, inefficient, and costly. Qualified 3PLs automate the receipt of orders by integrating their warehouse management system (WMS) directly to their client’s shopping platform or interface.
When the order is received in the WMS, the products that are part of the order are physically “picked” from the storage area in preparation for them to be packed and shipped. Each 3PL will have an agreement in place called a service level agreement (SLA), which states the requirements of how quickly the 3PL needs to process an order.
This step involves more than placing an item or items in a box or envelope. As an important part of the total customer experience, a 3PL will work closely with a client to identify and source the best, most cost efficient packaging choice to ensure product security in transit, optimize saving on shipping costs, and support an on-brand unboxing experience for the end consumer.
Once an order has been picked and packed, it is ready to be shipped. Due to the large number of carriers (DHL, FedEx, UPS, USPS, etc.), numerous service level options per carrier, shipping cutoff times, and shipping locations, many merchants and manufacturers can find shipping to be the most complicated and expensive aspect of the fulfillment process.
An experienced 3PL will provide a clear shipping strategy as well as significant savings on the shipping costs. 3PLs can leverage their buying power with carriers to offer their clients better pricing than if they were shipping on their own. 3PLs with multiple fulfillment centers are able to provide high savings on shipping costs and decrease order delivery time.
In addition, a 3PL will handle all of the printing of the shipping label, as well as ensuring that tracking information will be sent out to brands and their customers so they can monitor the order in transit.
Mistakes happen. Whether the customer orders the wrong item, the product is damaged during the shipping process, or other various reasons, returns are part of the shopping process and an important part of customer experience as today’s customers expect brands to offer an easy return policy.
Not all 3PLs offer return services, but those that do should provide an efficient framework for customizing this process to client specifications. The returns process, also known as reverse logistics, involves the receipt of the returned product, tracking and physically verifying the reason for return, and returning the item back into inventory or disposing of the product as directed by the client’s terms. Additional services like parts harvesting or order refilling can be included in this process, as required. Detailed reports on returned items and the management of the returned items should also be provided throughout the reverse logistics process.
LEARN MORE: Thinking about outsourcing fulfillment services? Contact the experts at The Jay Group. Leading the fulfillment industry since 1965, today’s top companies and ecommerce retailers rely on The Jay Group’s experience, customer focus, and enterprise level technology solutions to deliver the best possible experience to their customers.