Third-party logistics (3PL) providers have a longstanding history of providing services to better manage the supply chain. However, traditional warehouse management and transportation services are no longer enough in a world where same-day deliveries and 2-day shipping, real-time insights, and on-demand package tracking are expected.
Modern 3PLs have evolved their services and incorporated technology to keep up with consumer demand. Likewise, online merchants are turning to technology-enabled 3PLs to compete with the big retailers.
What is a technology-enabled 3PL?
A tech-enabled 3PL is a technology company that has developed streamlined shipping and fulfillment solutions for ecommerce businesses. In addition to fulfillment services, such as warehousing, digital picking lists, packing, and shipping, they provide software that integrates data from multiple sources to give complete visibility into the lifecycle of an order.
The 3PL’s software powers their network of warehouses and sends critical information back to the merchant. This overlap of technology and logistics provides an end-to-end supply chain fulfillment solution.
What is order fulfillment software from a 3PL?
Order fulfillment software is a cloud-based platform that helps automate inventory management, picking, packing, shipping, and tracking across orders and sales channels for online merchants. Fulfillment software integrates with other ecommerce applications, such as online stores and marketplaces, to streamline the flow of information.
Fulfillment software is also connected to the 3PL’s warehouses and fulfillment processes for real-time visibility into order tracking information, inventory levels, and much more.
Why should you use a technology-enabled third-party logistics provider?
Learn the top benefits realized by ecommerce businesses when they outsource fulfillment to a tech-first 3PL.
1. Save time and automate processes
Rather than manually sending orders to your 3PL before their shipping deadline each day, fulfillment software eliminates any manual intervention on your part. Because a 3PL’s technology integrates with your online store, warehouse staff are alerted as soon as an order is placed.
Then, each step is documented and updated in real-time, so you can view the status of every order as it moves from picking to packing, then shipping, etc. You can also search for orders that meet specific criteria to find exactly what you need.
Fulfillment software is also tied to and integrated with the other steps of the overall fulfillment process. This automation translates into downstream efficiencies, from reordering inventory when product levels are running low to handling returns. In addition to saving time for you and your business, it also gets deliveries to customers quicker.
2. Drive down fulfillment costs and gain intelligence
When it comes to fulfillment, one of the greatest opportunities to save money is in shipping costs. Besides the discounted shipping rates a 3PL negotiates with carriers, you can also reduce shipping costs by reducing the distance packages travel.
To do this, you can split inventory across fulfillment centers to ship orders out from warehouses that are closer to your customers. Fulfillment software uses past data to provide insights into how and where you should strategically distribute your inventory.
You can also eliminate guesswork and drive more effective supply chain optimizations with advanced analytics. Utilize built-in metrics, such as peak fulfillment times, revenue of orders shipped by day, sales by channel, sales and quantity of orders by USPS zone, and much more.
This continuous data collection and reporting only becomes more powerful over time as you build up more order history.
3. Reduce errors and increase transparency
Data entry errors happen to the best of us. When you have to manually send orders to your 3PL, you risk typos or entering incorrect information. These errors – which can lead to returns, exchanges, replacements, and expedited shipping – are expensive, time-consuming, and can ultimately burden your customers.
A tech-enabled 3PL automates this process by having systems talk directly to one another, thus, eliminating any duplication of work and the possibility of human error.
Additionally, connected technologies provide an extra level of transparency into the 3PL’s performance. Since the fulfillment steps of picking, packing, and shipping are tied directly into the software, you can view the 3PL’s level of accuracy with handling your orders.
4. Improve customer service and meet expectations
By incorporating technology into the ecommerce fulfillment process, you gain a complete view of the order – from the moment it’s placed online to the moment it is delivered to your customer’s doorstep.
When customers ask you questions, you can confidently answer them from anywhere using the most up-to-date information. This helps ensure greater precision, transparency, and consistency in service.
A tech-enabled 3PL also helps you provide Prime-like service that is expected by customers today. Without technology, same-day or two-day delivery is impossible. To offer the quick turnaround that your customers want, you need to optimize where you store and ship out inventory.
Your 3PL can help you distribute inventory to the warehouses closest to where your customers reside. Then, each time an order is placed, algorithms in the software automatically select the warehouse and carrier that can ship the order to your customer in the most efficient and cost-effective manner.
Partnering with ShipBob for fulfillment
Technology enables logistics. To keep up, you must embrace and leverage an integrated solution. A tech-enabled 3PL can save you time, money, and headaches, while improving customer service. This type of solution brings your orders, inventory, fulfillment centers, sales channels, and customers together in one place.
ShipBob has intuitive fulfillment software includes inventory management, customer communication, analytics, and integrations with all of the major ecommerce platforms (Amazon, eBay, Shopify, BigCommerce, etc.) to create a seamless purchasing and fulfillment process.
Combining this software with fulfillment services and a network of strategically located warehouses, ShipBob offers a full-stack solution. It’s quick and easy to get started, with onboarding taking 15 minutes or less, and no IT resources required to get up and running.
Learn more about how partnering with a modern fulfillment company can help your business scale, and get tips for choosing a fulfillment partner.
Download “How to Choose a 3PL for Your Ecommerce Business.”