What is a 3PL?
3PL = Third Party Logistics
Third-party logistics in logistics and supply chain management is an organization’s use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services.
Outsourcing of E-Commerce Logistic Processes:
- Receiving
- Warehousing - Inventory Storage
- B2C Order Fulfillment (Picking, Packing, Shipping)
- Returns
- Order Prep
- Bulk Inventory Shipment to FBA (Replenishment]
What to Look For in a 3PL
- SIZE: Bigger is not Necessarily better
- Do they have a website?
If they do not have a website avoid them. Legitimate 3PL and prep centers are real businesses.
- Look Up their address on Google Maps
There are shady “prep” centers popping up by people trying to run them out of their garages or apartments. Your Inventory Is at massive risk at these places.
- Do they understand the needs of an ecommerce seller?
- Do they require a contract, or do they earn your business every month?
- Research their reputation
(google reviews, other reviews, better business bureau)
- Transparency-Read their terms and conditions Do they even have them?
- Will they share their metrics? On time ship rate?
- client retention rate?
- Direct email
If they’re using a gmail account or some other anonymous email, avoid them.
- What About International Shipping?
- What is their Order Fulfillment handling time? Same Day up to 14:00?
- Do they require an up-front deposit and a positive balance on your account vs 30 day billing.
- Do they mark up Shipping?
- Do they provide granular order detail and transparent costs?
- What is their process for Shipping to FBA? Turnaround Time Commitment?
- Do they Support and Manage Returns? If yes how?
- Do they support Amazon FBA Removal Orders?
Multi Location vs Single Location
Pro
- Closer to the Customer
- Quicker Transit
- Less Shipping Cost
- Best for Few Skus
- Best for large, heavy products
Con
- Complex (Sounds Good but..)
- Inventory Balancing
- Shipping Cost To Realign Inventory
- Handling Cost To Realign Inventory
- Quicker in practice
- Corporate
What to Look For in a 3PL - Location
Population Distribution USA
Population Growth USA
Major Transportation Arteries in the USA
East Coast Port Options
Advanced Features
- Alternate Skus (FNSKU, GTIN, UPC, OTHER)
- Virtual Bundling
- Case Packs vs Each [FBA-FBM Hybrid]
- Substitute Products
- Lot Control
- Online portal
Understanding 3PL Pricing
- They should be able to provide pricing upon 1st request.
- Is it Easy to Understand OR COMPLEX?
- Be Cautious of fine print and hidden charges. Startup fees?
- Webstore fees?
- Bin fees? Other Fees?
- Return Fees?
- How do they define a pallet? Can you have multiple skus on a pallet?
- Do they have limits on Skus vs monthly revenue?
- Monthly minimums?
- Packaging fees?
- Label Fees?
- Labor Fees?
- Receiving Fees? Outbound Fees?
- Do they mark up shipping rates?
Have Any Question?
We are always here to answer all your question, feel free to contact us
