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Once you grow your eCommerce shop to a certain size, it may be time to think about outsourcing your fulfillment. Stop shipping packages one by one to customers; instead, you can turn over your inventory to a third-party provider and let them handle each shipment professionally.
Let's look at what third party logistics is and the advantages it can provide to your company to partner with a professional provider.
What is 3rd Party Logistics (3PL)?
Logistics entails the entire chain involved with buying raw materials, producing a product, and sending that finished product to customers.
Third-party logistics means that you turn over part of this chain to another company. Most often, this means that you turn to another company for the final part: storing inventory, packing products, and shipping orders to a customer, also known as order fulfillment.
ShipBob is one of the leading companies for third-party logistics. They can help your eCommerce company with inventory management and product delivery. Simply start by connecting your account from a platform like Shopify, WooCommerce, or Amazon and start letting them fulfill your orders for you.
Send all of your inventory to ShipBob and let them manage the rest. They'll handle everything from inventory management, outbound shipping, returns, and more. With ShipBob, you only have to ship to one fulfillment center and they'll take care of the rest. Take advantage of their geographic footprint of warehouses that are located in the largest US cities. This way you can reach more customers quicker.
You'll also benefit from a tremendous analytics platform in the process, which gives you new insight into how your customers are ordering and how to optimize your inventory levels.
9 Benefits of Using Pro Third-Party Logistics Providers
Having a hard time seeing the benefits of turning over a part of your eCommerce business? Here are nine top advantages that working with a professional third party provider (3PL) can bring:
1. Skip Renting Your Own Warehouse
If you only use a third-party logistics provider for one reason, it might be because you get to skip the complexity of finding and renting a warehouse space.
When you don't have to rent a warehouse or partial space in a warehouse, you save all of the following:
- The time involved with finding, selecting, negotiating, and moving into a warehouse facility.
- The cost of renting the warehouse space, which is often a fixed fee no matter how much (or how little) you're making use of it.
- The liability that comes with being an occupant in that warehouse, such as being liable for any accidents in the warehouse that cause damage to other inventory or the facility.
Whether it's a financial reason or simply the pragmatic reasons that you don't have time to procure a warehouse, turning your logistics over to a company like ShipBob is going to really remove the headaches of finding storage space for your valuable inventory.
2. 3PLs Help Keep Your Workforce Lean
Managing payroll, taxes, benefits and more for your employees can be one of the most time-consuming activities for small business owners. Each additional employee that is on your roster adds additional work in each of these processes.
Furthermore, staffing a warehouse adds complexity to your hiring and people ops. Let's say your company is mostly engineers and you build a high tech product. Staffing a warehouse requires different workforce strategies that are going to take time and investment to understand.
Turning over the third-party delivery chain to ShipBob shifts the work involved with managing a workforce to those who can do it best. With an already-robust workforce, ShipBob already has everyone needed to take over your logistics needs.
3. Get Closer to Your Customers
Even if you take the leap and open up your own warehouse, it's unlikely that a single warehouse is going to put you near the majority of your customers. You need a distribution network that will help you stay close to your customers.
This is another key advantage that ShipBob has compared to self-service logistics and other 3PLs. ShipBob offers quick 2-day fulfillment services so that your online store can offer faster shipping to your customers. They already have multiple fulfillment centers located in the largest cities in the United States, with more to come.
When you distribute your inventory across these locations, it is more likely to be close to your customers when they place an order. Even the best carriers are limited in how fast they can move, so having closer inventory helps you deliver quickly.
4. 3PL Providers Benefit From Scale
Scale matters when it comes to running an operation. Believe it or not, the rates that UPS, FedEx and other carriers advertise aren't what everyone pays when it comes time to ship packages.
For the big players in shipping, rates are lower thanks to the sheer volume of packages sent through these common carriers.
This is yet another advantage that you''ll find when you outsource your logistics to ShipBob. Their overall shipping footprint allows them to negotiate and take advantage of these volume discounts, and you get to take part in those savings.
All of this leads to increasing your margins or passing those savings onto your customers, helping you to maintain your competitive position.
5. Get Data-Driven Insight Into Orders
Ditch the days of analyzing your orders offline in Excel spreadsheets or other apps. When you connect your online store to a solution like ShipBob, you can leverage their tools to keep a better eye on your needs.
ShipBob isn't just a fulfillment service, it's a tech-first fulfillment solution. There are real-time metrics on inventory levels, order trends, sales, and more. It's this type of insight that really adds value to working with a third-party logistics provider.
Working with a third-party logistics provider isn't just about skipping the work of storing inventory, packing orders, and shipping to customers; it's about letting the professionals handle what they do best.
6. 3PLs Helps You Scale to Keep Up With Demand
As your online store sales grow, it can become difficult to manage. You will reach a point where you have a lot of orders from customers that need to be filled.
Picture this scenario when you handle your own eCommerce logistics. What if your house and garage were full of inventory while you scramble to find more space to store inventory before you ship to customers?
Now picture this same set of circumstances, but with ShipBob managing your logistics needs. Your inventory is stored in their accommodating warehouse(s). Now, a spike in sales is not overwhelming but rather enjoyable. That's the difference in mindset when you have one less set of details to think about.
7. Maintain Your Branding Even When Outsourced
When you outsource any part of your business, one of the most natural fears is that your customers will lose sight of your branding. It could be confusing if another company is suddenly stamped on the packages you ship to customers.
You want continuity for your customers when it comes to outsourcing your logistics. The best cutover to using a professional third-party party provider is one that's seamless for your customers.
That continuity is what ShipBob offers when they become your preferred eCommerce logistics provider. You can still use your branded packaging or take advantage of the free plain brown boxes and packing materials that won’t have ShipBob’s name on them. Either way: your customers don't have to know that there's another party involved.
8. Integrate Easily With Popular eCommerce Storefront Platforms
Let's say that you use a popular eCommerce platform like Shopify, Amazon, or WooCommerce. You might be wondering how much work it is to bolt a third-party provider like ShipBob on top of your existing solutions.
Software makes your life easier, but different platforms have to talk to keep things seamless. The good news is that with ShipBob, it's built to interface with these platforms easily. This way, you don't have to worry about hiring a developer to connect everything.
All of this means that you'll start seeing advantages in your order delivery chain as soon as you get started. There's no painful cutover or difficult integration of a new service thanks to these easy platform tie-ins.
9. Process and Deliver to Your Customers Fast
We've already highlighted several speed advantages that ShipBob offers, but don't forget: the biggest advantage they offer is their focus on your logistics. Even if you're good at packing and shipping orders, it still competes with everything else that you need to do.
Because the sole purpose of ShipBob is to help you fulfill and reach your customers, they're ready to help you fulfill orders and connect with customers. Same-day turnaround, plus strategic shipping locations, gives you a natural advantage over your competition. And more importantly, that's going to be faster than most small businesses can handle in-house as they balance any other priorities.
What Next? Leverage Third-Party Logistics to Focus on What You Do Best
Above all, outsourcing parts of your business is all about freeing you up to do what you do best.
Many of us small business owners constantly feel stretched to learn and do every single aspect of our eCommerce business. Companies can't outsource the things that they're best at, like product development or marketing, or they risk losing a competitive advantage.
But one thing you can reliably outsource is order fulfillment to another provider. Take advantage of those opportunities to outsource the parts of your business that are best handled by others.
That's why now may be the time to start using a service like ShipBob for your eCommerce order fulfillment. They have logistics down-pat, and let you focus on working on your own core business.