What is a 3rd party fulfilment company and what does it do?

A 3rd party fulfilment company, also known as a 3PL company, is a business that stores, packs, and ships products on behalf of its clients. Clients will typically be businesses that sell physical goods online, such as eCommerce retailers. These businesses will outsource their fulfilment to a 3rd party to save on costs and increase efficiency.

3rd party fulfilment companies usually offer a range of services, such as warehousing, pick and pack, order tracking, and customer service. These 3PL warehousing companies will also often have relationships with major shipping carriers, which can help to keep shipping costs down.

The benefits of using a 3rd party fulfilment company

There are many benefits to using a third party fulfilment company, including lower shipping costs, improved order turnaround time, and increased scalability.

Lower shipping costs: One of the main reasons why businesses use 3rd party fulfilment companies is that they can cut down on shipping costs. Some 3rd party fulfilment companies offer free or highly discounted shipping options, which can in turn save a significant cost for businesses.

Improved order turnaround time: A third party fulfilment company can help to improve your order turnaround time. This is because they can manage the entire process for you, from receiving the orders to shipping them out. This means that you don’t have to worry about anything, and can focus on more important tasks for your business.

Increased scalability: Scalability is the ability to grow and expand. A good 3rd party fulfilment company will have the ability to handle increased orders without compromising quality or service. This is especially important for businesses that are growing quickly or are expecting a surge in orders.

Tips for choosing a 3rd party fulfilment company

Here are a few things to consider when choosing a 3rd party fulfilment company:

1. What services do they offer?

Make sure the company you’re considering offers the services you need, such as storage, pick and pack, shipping, and returns processing. 

2. How much will it cost?

Fulfilment services can vary greatly in price, so it’s important to get quotes from several companies and compare pricing. Be sure to factor in all costs, including storage fees, shipping costs, and any other fees that may apply.

3. How will they help my business?

When choosing a company, make sure they understand your business model and can offer advice on how to improve your shipping process.

4. What is their experience?

It’s important to choose a company with experience in your industry. If you are an online retailer, you know that fulfilling orders can be a huge time commitment. You have to pack and ship each order individually, which can take a lot of time and money. That’s where a 3rd party fulfilment company comes in. A third party fulfilment company will pick, pack, and ship your orders for you. This can save you a lot of time and money, and it can also improve your customer service. 

5. Ability to scale

A company that can’t handle a sudden increase in business is not going to be a good long-term partner. Look for a fulfilment company that has a well-established infrastructure and the ability to scale up quickly and efficiently. They should also have experience fulfilling orders of all sizes, so they can handle your specific needs.

6. Customer service

Finally, make sure they offer excellent and responsive customer service. Even if they can fulfil your orders perfectly, if their customer service and response times are poor, it will reflect poorly on your business. 

As your business grows, you will quickly discover that you cannot do everything on your own. You will need to delegate some of the tasks to free up your time so that you can focus on other aspects of the business. One of the best decisions you can make is to use a 3rd party fulfilment company, so be sure to choose a company that will be a true partner in your success.

Written by Business Contributor Adele Joy