Fulfillment will always be a time-consuming and costly process for ecommerce businesses. With competition rising, it can be harder to meet customer expectations around fast and affordable shipping. That’s why many direct-to-consumer (DTC) brands partner with a third-party fulfillment partner like ShipBob to help them scale their fulfillment strategy and prepare for future growth.

A third-party fulfillment provider offers expertise in warehousing, retail fulfillment, and technology, ecommerce brands can effectively optimize their fulfillment process while keeping logistics costs down. Customer expectations continue to rise as shipping becomes faster and more expensive for your business.

Learn more about why DTC brands prefer to partner with a third-party fulfillment provider like ShipBob.

What is third party fulfillment?

Third-party fulfillment refers refers to the outsourcing of ecommerce logistics processes, including warehousing, picking and packing items, inventory management, shipping orders, and managing returns. 3PL providers allow ecommerce merchants to accomplish more, with the tools and infrastructure to automate shipping and fulfillment.

Third-party fulfillment vs other fulfillment methods

As an ecommerce business, you have several fulfillment options. However, most online stores choose to partner with a third-party fulfillment over other fulfillment methods for several reasons. Also known as a 3PL, third-party fulfillment is an affordable and scalable option as it saves you time and money, as well as provides room for your business to grow. Here is a comparison of the pros and cons of third-party fulfillment vs other methods.

Fulfillment types	Pros	Cons
Third-party fulfillment	Faster fulfillment More time to spend on money-making tasks Reduced transit times Negotiated shipping carrier rates Built-in inventory and order management tools Advanced data and analytics Access to fulfillment expertise and support	Can be challenge to find the right 3PL for your business
Self-fulfillment	Control over the picking and packing process Great for when you’re first getting starting out	Time-consuming Many hidden costs Higher shipping rates Not scalable
Dropshipping	Low starting costs Minimal overhead No inventory to hold Very little effort required	Minimal profit margins Low barriers to entry Inefficient supply chain and shipping Fulfillment errors go unsupported Supplier issues can cause a lot of problems
FBA	Amazon Prime badge Warehousing Inventory management	Less control over your inventory Unable to use your own branding Additional fees include fulfillment fees and inventory management fees

Faster shipping

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 provide more shipping options, such as free shipping.

Lower 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.

Reliable inventory tracking

Tech-enabled 3PLs like ShipBob use inventory tracking systems to provide a transparent overview of current stock levels and inventory control tools to set automation inventory reorder notification points before stock is depleted, forecasting inventory, and more.

The fulfillment services you’ll get only from a 3PL provider like ShipBob

The choice to outsource logistics to a third-party fulfillment partner 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. It all comes down to finding the right 3PL that meets your brand’s unique needs.

Here are just some of fulfillment services you get from a 3PL like ShipBob:

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.

Built-in inventory management tools

Managing inventory involves much more than just warehousing your products. ShipBob’s proprietary technology includes built-in inventory management tools that allows you to easily sync inventory with your online store, view real-time inventory counts at each third-party fulfillment center, and proactively reorder inventory to prevent stockouts. Once ShipBob receives and stores your inventory, you can check the quantity on hand and units sold per day for each product. This offers full visibility into what is available to ship to your customers at any given time.

Professional picking and packing

Fast-growing ecommerce businesses can quickly become overwhelmed with a high volume of orders. If the wrong items are packed or orders are sent to the wrong address, returns increase and customers complain. If you leave warehouse picking and packing up to ShipBob, our skilled fulfillment experts will handle the fulfillment process for you.

Although ShipBob takes care of fulfillment for you, you still have full visibility into the entire process. Through ShipBob’s dashboard, you can filter orders by status, search for specific orders, see a quick timeline view of where your order is in the fulfillment process, easily find shipping-related information, and get a quick snapshot of any orders that require action.

Partner network accessibility

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.

How third-party fulfillment became a game changer for TB12

Tom Brady’s brand TB12 hit an inflection point of growth, and it became apparent they needed to partner with a third-party fulfillment provider that could help them expand geographically in the US and also drive down shipping costs and expenses. They evaluated several fulfillment options for several months before choosing ShipBob. They were most impressed with ShipBob’s commitment to driving improvement and technology, which drives reductions in last-mile delivery time.

“We distribute inventory across ShipBob’s fulfillment network so we can be closer to major distribution hubs, shipping carriers, and more of our customers. Since switching to ShipBob from our previous 3PL, our fulfillment cost on comparable orders went down by 25%”

Michael Peters, VP of E-Commerce Operations at TB12

Get started with ShipBob, a third-party fulfillment provider

By choosing ShipBob as your third-party fulfillment provider, you’ll be able to save on costs, fulfill orders faster, and keep customers happy.

Request a quote below to learn more about ShipBob’s fulfillment services and see if we’d be a good fit.

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FAQs on third-party fulfillment

Getting started with a 3PL doesn’t have to be challenging. Here are answers to some common questions about third-party fulfillment.

How does third-party fulfillment work?

Third-party fulfillment refers refers to the outsourcing of ecommerce logistics processes, including warehousing, picking and packing items, inventory management, shipping orders, and managing returns. 3PL providers allow ecommerce merchants to accomplish more, with the tools and infrastructure to automate shipping and fulfillment.

Is a 3PL the same as third-party fulfillment?

3PL is short for ‘third-party logistics’ and is often used interchangeably with the term ‘third-party fulfillment.’ In most cases, they mean the same thing. However, every 3PL offers different services and capabilities that relate to order fulfillment and optimizing logistics.

How much is third-party fulfillment?

Third-party fulfillment can vary in price.  It all depends on the type of product you sell, your monthly order volume, and other factors. With ShipBob, we provide transparent and easy pricing. Our standard fees include:

• One-time implementation fee for 30 days of support
• Receiving your inventory
• Warehousing your products
• Shipping each order

View our pricing model here.