The decision to outsource parts of your supply and fulfillment chain operations to a third-party logistics provider (3PL) shouldn't be taken lightly. If your company already has established processes in place to distribute products, company leaders will need to make sure the shift to a 3PL provider goes smoothly, as Supply Chain Brain pointed out.
That said, the benefits of working with an experienced, dependable and capable partner can be especially valuable to businesses, especially as they grow and expand into new markets. With a trustworthy 3PL managing a variety of distribution and fulfillment duties, your company can focus on its core operations and remain secure in the knowledge that parcels will reach customers quickly and consistently.
The most important step for your organization is finding a great partner that your company can build a long-term, mutually beneficial relationship with. Let's look at some best practices for choosing a 3PL as well as key qualities in this sector that should be a focus for your organization.
Understanding the skill sets of 3PL companies
The term 3PL covers a wide variety of businesses, especially in an era where shipping and fulfillment on the B2C level is increasingly common. While 3PL has a traditional connection to B2B concerns – freight shipments and less-than-truckload orders heading from production facilities to warehouses and distribution points – some companies in this space can also coordinate deliveries to individual customers. If your company is focused on B2B sales, or a mix of B2B and B2C, you can find a 3PL provider with expertise in this area.
Depending on the industry in which your business operates, experience handling specific types of products should be thoughtfully considered by company leaders. Most B2C and even many B2B companies don't have to worry about unique delivery needs beyond keeping parcels and their contents secure as they travel to their final destination. However, the world of e-commerce is itself a unique industry, one where a veteran 3PL partner can have a significant and positive impact on the customer experience.
A 3PL provider that understands factors such as expected delivery timelines within a given market – whether domestic or international – can be a powerful partner. Fulfillment timelines and costs are important to all consumers. Although specifics can change from one market to the next, no customer wants to wait to receive an order outside of the projected delivery timeframe or pay for expedited delivery that takes too long.
Skill sets for modern 3PL providers focused on e-commerce extend beyond strict order fulfillment. Returns, for example, are an unavoidable part of business for companies even when they ensure the accuracy of every single order. Just as a 3PL partner should have the infrastructure to make sure packages quickly reach their intended destination, they should also offer options for ensuring this critical component of the customer experience can be smoothly managed.
Identifying business needs and aligning them with 3PL abilities
Every company has different needs in terms of their supply and fulfillment chains. Similarly, 3PLs have a wide range of strengths, services and areas of focus, as American Express pointed out. If your company is mostly concerned with regional and some national sales and the associated distribution needs, experience with fulfilling orders made by international customers won't be your first priority. Companies that want to or currently sell products to recipients in foreign countries, meanwhile, must ensure their 3PL partner can reliably fulfill orders and handle the customs and tax considerations that come with cross-border commerce.
Defining what your organization needs from a 3PL currently and will likely want in the future is vital. When it comes to questions of order fulfillment, shipping, international delivery, e-commerce compatibility and similar concerns, you should determine if your company:
- Needs to send orders to cross-border customers or wants to do so in the future.
- Wants to continue to manage the returns process directly or could benefit from outsourcing it to a 3PL provider.
- Has the staff in place to manage customs and international tax issues or wants to pass that responsibility along to a knowledgeable partner.
- Would rather directly manage its e-commerce platform – which grows increasingly complex with interacting with foreign customers – or let a 3PL also handle this aspect of operations.
With decisions made about these specific concerns, your company can more confidently select a 3PL that aligns with your needs.
Landmark Global specifically focuses on international order fulfillment, addressing processes related to taxes, customs, currencies, languages, cross-border fulfillment and many related workflows. To learn more about how we can help your company expand its customer base and capably perform in a variety of international markets, get in touch with us today.