Many ecommerce businesses start out self-fulfilling orders but quickly grow out of it. Operating logistics in-house can be time-consuming, messy, and can hold you back from focusing on money-making initiatives.
The easiest, most straightforward solution is to outsource fulfillment to a trusted third-party logistics (3PL) partner. While outsourcing logistics can seem like a big step, doing so can give your business a competitive advantage as it puts logistics into the hands of the expert while saving you time and money.
What does it mean to outsource logistics?
Outsourcing logistics refers to hiring a 3PL partner to manage some or all aspects of the order fulfillment process, including storing and managing inventory, picking and packing boxes, and shipping orders. While outsourcing may seem like a risky option, a 3PL has helped brands stay competitive by optimizing their logistics strategy to meet custom expectations.
Why many businesses choose to outsource logistics
There are a variety of reasons that a business might choose to outsource its logistics, as each business has a unique set of needs. Here are four of the most common reasons why ecommerce businesses choose to partner with a 3PL like ShipBob.
1. They run out of space
Running your business out of your spare room, garage, or other living space is not only stressful, but it can also lead to disorganized and inefficient logistics operations. With a 3PL, you can store your inventory in one or more fulfillment center locations. A 3PL warehouse safely and securely stores products in an organized way to track where items are located, when they arrived, how long they have been there, and the quantity on hand.
2. They are growing
As you grow your business, it can be hard to focus on money-making initiatives if all your time is spent on managing logistics. An influx in order volume can leave you scrambling for storage and the manpower needed to pick, pack, and ship every order. But with a 3PL’s flexible warehousing services, cutting-edge technology, and fulfillment expertise, you’ll have access to a scalable ecommerce fulfillment solution needed to help you grow your business.
3. They need more efficient logistics
Order filling takes time — time that is almost always better spent towards more strategic functions like marketing or product design. 3PLs have systems and processes in place to help fulfill orders quickly without compromising order accuracy. By outsourcing to a 3PL, businesses place time-consuming logistics into the hands of the experts, who can help find ways to reduce shipping costs and speed up transit times, while saving on fulfillment costs.
4. They aren’t experts in the field
3PLs are experts at what they do, and are well-versed in industry best practices. When you partner with them, they will not only implement these practices for you, but they will also introduce you to additional cost-saving measures and strategies that come from their years of service in logistics.
The benefits are big when you outsource logistics
The choice to outsource your logistics to a 3PL is a big one — but in this case, with big change come big rewards. Few decisions will lead to such immediate growth for your business with such little effort, and in most circumstances, the benefits of outsourcing logistics to a trusted 3PL far outweigh the potential negatives. Here are just some of the benefits that you can expect when you outsource your logistics to a 3PL.
Higher order accuracy
3PLs have the infrastructure, expertise, and technology to improve order accuracy. For instance, whether it’s assigning pickers optimized routes, opening more fulfillment center locations to cut down on shipping times, or improving our warehouse picking and packing processes, ShipBob is constantly looking for ways to improve and achieve higher levels of order accuracy.
While smaller ecommerce businesses often have to manually verify, register, and process orders, 3PLs have software that integrates and syncs with your online store and other sales channels, which can speed up the fulfillment process. For instance, with ShipBob, orders are automatically to a fulfillment center to be picked, packed, and shipped as soon as possible. To stay in the loop, our merchants can view order status and inventory level in real-time all from a single dashboard.
In addition to speeding up fulfillment, 3PL providers offer businesses the ability to offer affordable and fast shipping to more or all of their customers. ShipBob offers merchants the ability to split inventory across several fulfillment center locations. This drastically cuts down on shipping distance and costs, which also provides merchants with the ability to offer better shipping incentives, such as free shipping.
Cheaper shipping costs
Shorter shipping distances mean lower shipping costs, but that’s just the beginning. A 3PL’s relationships with major carriers like UPS, FedEx, USPS, and DHL enable them to negotiate bulk shipping discounts that they then pass along to the businesses that partner with them. In addition, 3PLs are packing masters, helping their partners cut back on expensive and unnecessary packing materials by shipping items in SIOC packaging or using our standard packaging materials.
What to look for in your outsourced logistics
Your 3PL should act as an extension of your team — so in choosing the right 3PL partner for your business, there are several important factors to be on the lookout for. When it comes to choosing a partner to handle your online store’s retail fulfillment, the options can seem endless. It’s important to choose a logistics company that you trust to handle your inventory, fulfill orders accurately, and provide the support needed to help grow your business.
1. Multiple fulfillment centers
3PL providers with multiple fulfillment centers are more agile and efficient than those with only one. With fulfillment centers strategically located across the US, as well as internationally, a 3PL can distribute inventory to reduce average shipping zones, which significantly reduces shipping costs and transit times.
2. Partners within the industry
The best 3PLs have forged relationships with major ecommerce solutions to facilitate smoother and easier growth for their partners. ShipBob has fostered an entire partner ecosystem, working together with ecommerce platforms, freight shipping providers, inventory and order management software, and returns management solutions to ensure that our platform can easily integrate with your existing and/or expanding tech stack.
3. No hidden fees
Surprise logistic costs frustrate business owners and wreak havoc on your carefully constructed budget and calculations, so the right 3PL partner will present a transparent pricing structure and stick to it throughout your partnership. That is why ShipBob’s pricing is intentionally designed to be as transparent and simple as possible, and it never leaves you stuck with unexpected fulfillment fees.
What happened when ShipBob customer Kula Cloth switched from self-fulfillment to ShipBob
When Anastasia Allison hiked the Alpine Lakes Wilderness in Washington and found beautiful scenery littered with toilet paper, she was inspired to create Kula ClothTM: a reusable, intentionally designed antimicrobial pee cloth perfect for hikers and wilderness explorers who want to Leave No Trace.
The company quickly grew, but when the burden of fulfillment began to keep Anastasia from the very passion that inspired her business, she knew that something had to change. As nervous as she was to outsource fulfillment, Anastasia trusted that it was what was best for her business; and sure enough, after partnering with ShipBob, she has never once looked back. With ShipBob, Anastasia got an easy solution with transparent, simple pricing and and access to a dedicated support staff.
“Since switching to ShipBob, my company’s orders have more than tripled now that I’m able to spend more time looking at the big picture, rather than doing things like stuffing envelopes all day. I don’t have to worry about the minutiae and day-to-day. I’m now truly the owner, not the operator.”
Anastasia Allison, founder of Kula Cloth
Logistics outsourcing is a huge, sometimes intimidating step for many business owners, but it is a step that rarely any regret taking. Trusted, tech-enabled 3PL like ShipBob bring their expertise, precision, and optimization to your fulfillment logistics operations, allowing you to run your business without getting bogged down in the weeds.
So with the right logistics partner by your side, you will not only save yourself time and money, but you will be free from barriers to success and give your company a competitive advantage.
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Logistics outsourcing FAQs
The world of logistics and outsourcing can seem overwhelming, especially for business owners who are already juggling the many demands of running a business. For businesses looking to outsource logistics, here are answers to the most common questions.
What’s better for outsourced logistics, 3PL or 4PL?
When are you ready to outsource logistics?
Self-fulfillment is efficient and inexpensive when you’re just starting out, but if your storage space is starting to get overcrowded and you’re having a hard time keeping up with shipping orders, it’s probably time to outsource. A 3PL like ShipBob offers fulfillment solutions for businesses of all sizes.