12 Benefits of 3PL Distribution Centers

Time: Aug 05,2022 Author: SFC Source: www.sendfromchina.com

As e-commerce sellers, everyone wants to get the maximum profit with the least input. However, it is not easy to achieve this goal, you need to understand the main sources of spending in the e-commerce business, and make correct strategies to reduce costs and increase revenue.

The e-commerce business mainly includes three links: product selection, marketing and order fulfillment, which are closely connected with your income and expenditure. However, only order fulfillment can achieve costs reductation while revenue increasing. Since order fulfillment accounts for the largest portion of e-commerce business spending, and high quality order fulfillment in turn increases your store conversion and accelerates your business growth, you’d better make the maximum use of order fulfillment. As you are neither a 3PL distribution expert, nor so much time and energy to put into order fulfillment, you may need a professional third-party logistics distribution center to share your worries.

What is a third party logistics distribution center? It doesn't matter if you don't know, this article will tell you the definition of a 3PL distribution center, the benefits of a 3PL distribution center, the tips in choosing a reliable 3PL distribution center, and the FAQ of 3PL distribution.

Content:

IV. FAQ Of 3PL Distribution Model

I. The Definition of A 3PL Distribution Center.  

3PL distribution centers, also called 3PL distribution companies, are third party fulfillment companies independent of the manufacturer and retailer that provide 3PL distribution services such as transportation, warehousing, inventory management, order management, API integration and value-added services. 3PL distribution centers are supported by advanced technology and superior supply chain resources, thus are capable of providing specialized, standardized and diversified order fulfillment services.

II. 12 Benefits of a 3PL Distribution Company.

A. Save your Ecommerce Fulfillment Costs

1. Save the cost of managing and staffing your own distribution center.

3PL distribution centers are equipped with sound order fulfillment resources such as warehouse, operation system and shipping network, so you can rely on them to fulfill orders with their resources to save your costs of warehouse rental, equipment procurement, transportation system and staff salaries. It is not cost-effective to fulfill orders by yourself, but you will have more energy and money to grow your business when outsource order fulfillment to 3PL distribution centers.

In addition, 3PL distribution providers have rich experience in handling order fulfillment, and they can custom the highest cost-efficient solution for your order fulfillment.

2. Save your packing and shipping fees with suitable materials.

As packaging costs you a lot, and the dimension of your packaging may decide your shipping fees, you'd better take notice of the selection of packing materials. DIY Packing fee is generally more expensive than that of 3PL distribution centers. This is because they have multi packing materials for option, they know how to keep your parcels light and intact at a pleasant price, and they can pass along the discount on materials (from materials such as shipping boxes to packing material/dunnage) from packaging suppliers to you.

3. Pass along the group discount on shipping fee to you.

Apart from rich self-operated logistics channels, 3PL distribution providers cooperate with many shipping companies to extend their shipping network and optimize their global shipping services.You can get competitive shipping quotes from 3PL distribution centers because they pass along the group discount on shipping fees from shipping companies such as FedEx, UPS and DHL to you.

4. Reduce the waste of resources caused by lack of experience.

Because of your lack of experience in order fulfillment, you are bound to make many detours. More time and effort means more resources and money spent. For example, if you store in one place and pack in another, there will generate transfer time and transfer fees. However, if you store,pick and pack in one place, the wasted warehouse resources and transfer fees will be solved.

B. Save your Time and Free you from Order Fulfillment

5. Simplify order fulfillment processes with self-owned advanced system.

3PL fulfillment companies utilize the latest technology for their operations. This allows every step of the order fulfillment process to be captured and documented in real time. Once there is an order generated in your store, 3PL distribution providers will start pick, pack, and ship your orders, and they will send back the track information to each customer immediately after their orders are shipped out of the fulfillment center.

With smart logistics management software, 3PL distribution centers can track and collect data on a seller’s inventory through the year to predict business or benchmark growth. And sellers can see the status of their inventory, monitor orders, and get updates more easily at their convenience.

6. High-efficient inventory management brings high convert ratio.

If your order volume is not so large, operating and managing your own warehouse will be time-consuming and costly. Outsource your warehousing fulfillment to a 3PL distribution company will make your inventory storage more safe and warehousing management more efficient.

In general, 3PL distribution companies will print and apply barcode in each item for easily identification, and adhere to the FIFO inventory principle to ensure that all products are shipped out within the expiry date. They set inventory alert and support real-time inventory check to help sellers or manufacturers update products timely, and reduce unnecessary inventory waste.

7. Automatic Weighing for Quick Sorting

Weight your orders on-by-one, and sort them by hand will cost a lot of time. 3PL distribution companies weight orders by machine for quick sorting. In SFC, all orders will be weighted and put in a suitable box automatically after being scanned by our automatic weighing sorting machine.

8. Automate eCommerce Orders with Shipping Rules

SFC system support shipping rules generation automatically. You can pre-set your shipping preferences in our shipping software to allow automation and achieve efficiently shipping from china. Rules are set based on country, delivery preference, package size or weight, product value and so on.

C. Improve Your Order Fulfillment Services

9. Efficient and qualified order fulfillment.

As nearly 100 million people in the world shift their buying habits from offline to online, many e-commerce sellers choose to outsource their 3PL distribution services to a center for high-quality order fulfillment. At the same time, 3PL distribution companies developed advanced technology and accumulated rich operational expertise to manage ecommerce fulfillment, so they can warehousing, picking packing and shipping your products worldwide efficiently. In addition, they are capable to timely response to all kinds of emergencies with their over experience in order fulfillment.

10. Multiple Free Value-added Services

Apart from standard fulfillment services such as picking, packing and shipping your orders, 3PL distribution centers also provide multiple free value-added services to enhance customer satisfaction. Value-added services include things like kitting, assembly, custom packaging and brand labelling. Although these services seem humble, they may have great importance in improving their brand awareness and growing ecommerce business.

Here are some value-added services (provided by SFC service):

● Quality Inspection

● Custom packaging

● Kitting & Assembly

● Brand labelling

● Insert marketing card

● Real-time order track

11. Customized Logisitics Solution

DIY fulfillment will limit your logistics choice and elevate your shipping costs since your logistics options and shipping time will never exceed that of a professional order fulfillment center or logistics company. 3PL distribution centers work with many shipping companies, and form a sound global shipping network. A good order fulfillment center generally supports global distribution, and has multi logistics channels such as postal, express and dedicated line, and can customize shipping solutions for different customer groups. When your shipping time is shortened and shipping costs are reduced, your store conversion rate will ultimately improve.

12. Enhance Customer Satisfaction

All the above benefits are sure to improve your entire order fulfillment process, which will lead to on-time products delivery for your customers. As customers are attaching more and more importance to delivery time and delivery rate, those stores that can achieve shorter shipping and higher delivery rate are bound to be favored by customers, and customers will keep coming back to that store. As more customers are satisfied, you need not worry about no orders generated in the future.

All the above benefits are sure to improve your entire order fulfillment process, which will lead to on-time products delivery for your customers. As customers are attaching more and more importance to delivery time and delivery rate, those stores that can achieve shorter shipping and higher delivery rate are bound to be favored by customers, and customers will keep coming back to that store. As more customers are satisfied, you need not worry about no orders generated in the future.

III. 6 Tips in Choosing A Reliable 3PL Distribution Center.

After you know the benefits that a 3PL distribution center can bring, you may think of how to choose a suitable or reliable 3PL order fulfillment company to work with. As ourself (SFC Service) is one of the largest order fulfillment company in China, we know well the needs of our customers and put together some tips to help you choose the most suitable order fulfillment company.

1. Professionally certified fulfillment company

First and foremost, a good 3PL order fulfillment company is bound to have relevant industry qualification certificate. Whether you know order fulfillment or not, choosing a certified order fulfillment company can help you weed out a lot of dubious options. SFC is a professional fulfillment center in China with over 15-year industry experience, you can fully trust it.

2. Near to your product supplier or manufacturer

Secondly, you should pay high attention to the location of the 3PL order fulfillment company. As the fulfillment center starts handling your products only after they take delivery your products, you’d better shorten the shipment distance between your supplier and the fulfillment center to reduce the  shipping costs. For example, SFC has branches in Shenzhen and Yiwu, China, which are near to most Chinese manufacturers and airports. SFC can help sellers do quality inspection, and ship products quickly to their customers.

3. All-inclusive order fulfillment services

Thirdly, outsourcing warehousing, picking, packing and shipping services to a single fulfillment center is more convenient than outsourcing to multiple fulfillment centers. You’d better choose a one-stop order fulfillment center that meets all your needs, so you can put your whole heart into growing business. SFC is a one-stop order fulfillment center in China. Sellers/manufacturers can rely on SFC to store their products for a short time or long period, manage their orders, custom packaging and ship worldwide.

4. Intelligent warehousing & distribution system

Fourthly, the smarter the 3PL management system, the more efficient the operation. As mentioned above, the efficiency of order fulfillment centers are supported by advanced technology, hence the intelligence of their warehousing & distribution system is an important benchmark in choosing a distribution company. SFC has its own software system which is customer-oriented and easily operated, supporting API Integration and online management.

5. Complete global shipping network

Fifthly, efficient shipping is the most critical link in order fulfillment. Your customers may come from different countries and regions, but not all order fulfillment centers’ logistics networks cover your destination countries. You need to choose one center that can fulfill all your orders. SFC develops over 60 logistics channels to ship from China to 220+ countries and regions, the dedicated lines make SFC outstand peers.

6. Visible inventory, expenditure and order status.

Last but not the least, you need to be wary of insufficient inventory and hidden charges. If a fulfillment center support you to real-time check the inventory information, packing and shipping costs, and track status, you will have all fulfillment work under your control. SFC customers can view the inventory, expenditure on the dashboard, and check the real-time order status on SFC’s official website or other order enquiry websites.

IV. FAQ Of 3PL Distribution Model

Q1: What is 3PL Distribution Model？

In a 3PL model, an enterprise maintains management oversight, but outsources operations of transportation and logistics to a provider who may subcontract out some or all of the execution. Additional services may be performed such as crating, boxing and packaging to add value to the supply chain.

Q2: What is the difference between a 3PL and a 4PL?

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TAGS： Ecommerce Marketing Order Fulfillment