What is a 3PL Warehouse?

What is a 3PL Warehouse?

Most e-commerce businesses have been relying on China to source the products they’re selling. Why not? It’s easier to find the products because factories in China cater to all niches and you can get them at a relatively low price. The challenge, however, lies in how you will handle the logistics and fulfillment.

Not all businesses have their own warehouse to store inventory and fulfill orders especially if the products are from China. Small e-commerce businesses particularly don’t have enough resources to rent their own warehouse and manage distribution by themselves. This could hinder the growth of their business and limit their operations. If you are thinking of scaling operations in the future, you should already start finding a solution as soon as possible.

To maximize profits while expanding your business, you need to have a seamless supply chain to ensure that all your orders are produced, packed, and shipped properly. As a small business with limited manpower, you’ll have to rely on third-party services such as a 3pl.

What is a 3pl?

A 3PL or 3rd Party Logistics is a service provider that partners up with e-commerce businesses to manage their supply chain. For small businesses that source products in China, using the services of a 3PL is beneficial because they offer services such as:

Inventory management
Order fulfillment
Picking and packing

Most businesses have the ultimate goal of growing their operations. However, the result of the expansion is an increase in orders which is both a good and bad thing. Good because it means your business is thriving and bad because handling them can get quite complicated, especially for those operating on limited resources. By partnering with a 3pl, the risks that come with the growth will be lessened and your supply chain will be handled properly.

The whole process is made simpler and easier thanks to 3pl services. When you outsource your supply chain management, you’ll have more time to focus on other aspects of your business.

What is a 3pl warehouse?

One of the most common problems of businesses sourcing their products in China is where they would store the goods. If you have your own storage or warehouse in the US, you can just have the products shipped from China. However, this will cost you more in the long run. There’s also the option of renting a warehouse in China but again this will just add to your expenses. Aside from the cost of the warehouse, you also have to think of other expenses such as inventory management and freight services.

Fortunately, 3pl companies have their own warehouses which makes it convenient for businesses. The products from your supplier or manufacturer will be shipped directly from their factory to your 3pl warehouse. This is where they will manage your inventory and fulfill the orders.

What exactly goes in the warehouse? Here is the process of a 3pl warehousing service:

Products from the supplier or manufacturer are delivered to the warehouse and the staff receives them.
The staff manages and sorts inventory for easy accounting.
Any orders made on your e-commerce shop will be forwarded to your 3pl partner manually or automatically depending if they offer an integration service.
A staff member will pick and pack the orders, complete with receipts and order details.
The staff will also prepare the products for shipment, putting a shipping label on the boxes and handing them over to their shipping partner.
The tracking information will then be updated through the 3pl’s order management system.

Benefits of a 3PL warehousing

Supply chain management is done in one place. Unlike when you hire different independent third-party services, partnering with a 3pl gives your supply chain management a seamless process. Everything can be done in just one place from receiving to shipping orders. You don’t have to talk to different people and worry about having different systems in place.
Cost-effective solution. Inventory is an important aspect of a company’s logistics and if your business is growing steadily, you’ll definitely need a warehouse to store your products. Renting a separate storage will probably add up to your expenses so it’s better to hire an all-in-one service provider to save money on labor costs.
Offers more flexibility. 3pl warehousing allows you more flexibility when adjusting to sudden changes in your orders. For example, if there is a sudden surge in order quantity, the warehouse staff can find a solution to fulfill orders efficiently. They are trained to adjust accordingly to a given situation so that your time and money will not be wasted.
Gives you peace of mind. Inventory management gets more difficult as your business expands and you might get overwhelmed by it. With a 3pl handling your inventory, you can be assured that your supply chain will run seamlessly. People will not support a business that does not meet their expectations and those that give them a bad experience. They want their packages to be delivered on time and in great condition. If there are problems, the processing of returns should be easy. The 3pl staff is more than capable of handling these things since they have the right training and tools to address them.

Inventory management should be treated with the highest priority. This probably makes up a bulk of your operations so everything should be seamless from start to finish. There are those who are wary of handing over an important aspect of their business to a stranger but rest assured, with a reliable 3pl company, you won’t have to worry about having less control over it. A great 3pl partner should work together with you and understands what you need.
Final Thoughts

Are you looking for a warehousing logistics company to help you out with your supply chain management? Are you thinking of expanding your business soon? Then you don’t have to look far because Lansil Global is right here for you. From warehousing to distribution, we are committed to giving you the best services to meet your own customers’ expectations. Whether you are looking to simplify your inventory management or maximize profits, our team at Lansil Global will assist you in whatever you need to grow your business. Every step of the way, we will be there.

Contact us today so we can discuss how we can work together and help you achieve your business goals.