Order fulfilment is an integral part of any eCommerce business owner’s day in order to keep their business running. However, as your business grows and orders start pouring in, in-house fulfilment will eventually become unviable due to the sheer volume for a one-person band.
When this happens, expanding your fulfilment strategy is a good idea to keep in mind, and for most businesses, outsourcing fulfilment to a third-party logistics company, known as a 3PL.
If you’re looking to start outsourcing fulfilment, but aren’t quite sure how 3PLs work, this article aims to give you a comprehensive guide on the goings on behind the veil, so you can make the most of your new eCommerce fulfilment strategy and continue to grow your company.
For more about the wider selection of fulfilment services we have on offer at The Delivery Group, read this article here.
What is 3PL Fulfilment? 7 Things to Know About Third-Party Logistics
Third-party logistics, known as 3PL, refers to the process of outsourcing eCommerce logistics processes to a third-party company like The Delivery Group. These processes include inventory management, warehousing, and of course fulfilment. 3PL providers allow eCommerce and online store merchants to achieve more than they could with in-house fulfilment, as we provide the tools and infrastructure to automate retail order fulfilment.
The term ‘third-party logistics’ came from the 1970s and 80s, when companies began to lean towards outsourcing inbound and outbound logistics operations to third parties. This term became commonplace alongside the boom of eCommerce in the 1990s and early 2000s, and the services offered by these providers have expanded tenfold.
What is now known as third-party logistics is the supply chain integration of warehousing operations and transport services.
1: What is 3PL Fulfilment vs 4PL?
You may have come across the term ‘fourth-party logistics’ or ‘4PL’. Fourth-party logistics adds another degree of separation between merchants of eCommerce businesses, and the 3PLs fulfilling their orders. When a business becomes contracted with a 4PL, the 4PL undertakes the management and arrangement of 3PL services for their client – also known as double brokering.
Fourth-party logistics providers offer end-to-end management of the supply chain for a client. This includes 3PL services, manufacturing of products, procurement of inventory, and more.
2: Receiving
When a customer places an order, a third-party logistics company can’t ship the order without having any stock available to ship. This stage refers to the ‘receiving’ of your incoming inventory in a 3PL warehouse or fulfilment centre, followed by its quick and efficient storage.
While each 3PL has its own processes for the receiving and storage of client inventory, here at The Delivery Group, we require our clients to fill out a warehouse receiving order (WRO) so that we know exactly what products to expect; and how many units of each. This helps us with organisation and enables us to offer fast and efficient order fulfilment for you and your customers.
3: 3PL Warehousing
Once your inventory has been received in our 3PL warehouse, we will quickly store your items in a dedicated storage location, such as a shelf, bin, or pallet.
A good thing to keep in mind is that you should try to work with a 3PL that has more than enough storage capacity. This is so that, as your business and inventory grows, your 3PL storage capacity will be able to grow with you.
4: Picking
From the moment your customer places an order with your eCommerce store, the 3PL order fulfilment process begins. While some 3PLs require the manual uploading of customer orders to their system, an incredibly inconvenient and time-consuming process, The Delivery Group utilises sophisticated technology that can integrate with your chosen eCommerce platform to bring orders, shipments, inventory tracking, stock levels, and more to one convenient place.
This streamlined fulfilment process also allows for automated shipping, which automatically pushes your customer orders from your eCommerce store to our systems as soon as they’re placed. This means that, without the need for manual intervention, the order will be assigned to our expert warehouse picking team.
This generates a picking list for the picker with items, quantities, and storage locations so that they can efficiently collect the products on your customer’s order to be packed for shipping.
5: Packing
After every item has been picked to fulfil your customer order, the next step is to securely package the items so they can be shipped safely. Here at The Delivery Group, we supply all packaging materials so that you don’t have to pay for them, however, if you would like to use your own branded packaging materials in order to enhance the experience your customers have with your brand; you will have to pay a fee.
Standard packaging materials include:
- Non-branded boxes
- Bubble mailers
- Polybags
- Packaging tape
- Dunnage
- Paper-based dunnage
During the packing process, our expert packers will know the best ways to utilise packaging materials in order to ensure that your product is protected – but also achieves the lowest dimensional weight so that shipping costs are kept as low as possible.
6: Shipping
After picking and packing, the next step is shipping your customer order. Here at The Delivery Group, we can print shipping labels on your behalf so that the entire process is completed as efficiently as possible. We also have close relationships with multiple different shipping providers which helps us to negotiate lower prices and discounts on shipping which you, and your customers, will see the benefit of.
Carriers and couriers such as DHL, UPS, Royal Mail, and Hermes pick up orders from our 3PL warehouses to ship. The shipping speed depends on our partnerships and carrier policies, as well as the shipping options offered by you and selected by your customer.
Once an order is sent out for shipping, our clever technology integrated with your eCommerce platform will automatically push the required tracking details to your online store, where you can forward it to your customers.
7: Returns
Here at The Delivery Group, we also offer returns processing services and reverse logistics, which allows customers to return an order by sending it back to us. We then process the return, where we decide to restock the item if it is in good condition or dispose of the item if it is faulty or broken.
In order to offer convenience for you and your customer, we can also handle returns labels for your customer; with which they can easily track the status of their return order.
What is 3PL Fulfilment? 3 Valuable Services on Offer with The Delivery Group
Here at The Delivery Group, we can do more than just pick, pack, and ship your customer orders – we also offer a wide range of benefits that provide positive impacts for you and your customers. These include:
1: Efficient Inventory Management
The process of managing inventory has a lot more involved than simply warehousing your products. A good third-party logistics provider, like The Delivery Group, will allow you to sync your inventory with your online store, view real-time inventory levels at each fulfilment centre where your stock is, and proactively reorder inventory in order to prevent items from going out of stock.
Once we receive and store your inventory away in secure locations, you can check the quantity you have on hand and units sold per day for each product. This offers full visibility into what is available for your customers to buy and any time.
2: Two-day Shipping
There are certain standards and expectations that customers have come to expect when ordering online. Massive conglomerates like Asos have drastically increased people’s expectations, so in order to maintain a good level of customer experience and returning customers, you’ll need to compete on their level.
Consider these following statistics going forward:
- According to Comscore, 73% of online shoppers expect affordable and fast deliveries.
- Forrester states that 44% of online shoppers abandon their carts because of the cost of shipping and handling.
- Cision found that 24% of customers have cancelled an order because it took too long to arrive.
Although we have close relationships that allow us to negotiate discounted shipping costs for you and your customers, an even more cost-effective solution is to store your inventory across multiple fulfilment centres across the country, and internationally, where your main crux of customers are.
3: Inventory Distribution
The Delivery Group has multiple warehouses located across the UK, and internationally, so you can split your inventory across fulfilment centres to ship each order out from fulfilment centres that are closest to where a majority of your customers are located. This is called distributed inventory.
This process can be automated with the use of powerful algorithms that work to route each order to the fulfilment centre best for that shipment. This means that you’ll be able to guarantee two-day shipping to customers as your items will already be located near them, which will also provide cheaper shipping fees.
Unfortunately, if you have a particularly low volume of customer orders, it may not be a cost-effective tactic to distribute your inventory this way. However, as your business grows further, having a network of fulfilment centres stocked with your products will help you reach customers across the UK and the world more efficiently.
What is 3PL Fulfilment? The Biggest Benefits of Working With The Delivery Group
As well as shipping orders efficiently and negotiating for the lowest possible shipping costs, there is a wide range of benefits you’ll receive when you start shipping with The Delivery Group.
Our top 3PL order fulfilment benefits include:
Helping You Save Time and Money
By partnering with The Delivery Group, you eliminate the need to secure and buy or rent your own warehouse space, logistics operations, staff labour, and the technology required for larger-scale in-house fulfilment operations.
Alongside the growth of your business, it becomes more expensive and time-consuming to fulfil customer orders yourself. Costs pile up for an increase of warehouse space in use, equipment being used, warehouse management software, costs for recruiting staff and paying their wages, training, and insurance.
You also save more time when outsourcing to The Delivery Group as, rather than spending your day packing boxes or getting shipments sent off at the post office, you can spend time focusing on marketing and growth strategies for your brand.
Leverage Industry Expertise
As the owner of an eCommerce business, it’s more than likely that you don’t have the time to hit the books to become well-versed in every single detail of the shipping and logistics process. Luckily, that’s the job of our experts at The Delivery Group, and we’re always up to date with the latest industry trends and innovations so that you don’t need to spend any time away from your business.
We also have the technical resources and partner networks, including marketing agencies, providers of custom packaging, and more, that allow us to constantly improve supply chain efficiency.
Expanding Your Reach
If you have a large customer base and you’re only selling in one region, you’re definitely limiting the potential your business has to grow. Luckily, we can help.
The Delivery Group owns multiple warehouses and fulfilment centres worldwide, meaning you can propose your products to potential overseas customers, stock your items in one of our warehouses and get your stock sent out quickly and efficiently to your new international market.
