Expand your network with a 3PL

Expanding Your Network with a 3PL

Expanding Your Network with a 3PL

3PL partners offer logistics services and supply chain management. They are logistics experts, specifically; warehousing, picking and packing, inventory management,  transportation, fulfillment, packaging, and returns management. Because of the focused nature of a 3PL, they typically have a broad network of partners related to all aspects of the logistics industry. How can you expand your network with a 3PL?  

Transportation Network

expand your network with a 3PL
Photo by Daniel Lee

3PLs have relationships with multiple carriers across the transportation industry. They have partnerships with various van lines, shipping, freight carriers, and rail lines. While an individual eCommerce business might have a personal connection to one or two carriers, a 3PL has numerous. What this means for your business is that you instantly access this broader network of transportation providers. Why this is important: If flooding in Missouri prevents travel through a crucial interchange, your 3PL can pivot to other providers and routes to ensure the shortest delay possible. 

Legal

Expand your network with a 3PL
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A viable rats nest of legal concerns surround logistics, especially when you involve international shipments. This includes complicated issues like documentation, import and export regulations, as well as economic regulations. Hiring or investigating the nuances of international logistic law is time-consuming and expensive. One of the most cost-effective ways to expand your legal network is through partnering with a 3PL. A 3PL already has the expertise and relationships to comply with local, federal, and international laws. Your 3PL will have a pulse on the ever-changing legal fulfillment battles—especially those tricky wine and beer fulfillment issues.  

Expand to New Locations

Expand your network with a 3PL
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Expanding your eCommerce reach to new locations is daunting when you don’t have an on-the-ground expert helping you. When you consider trying to expand to new locations, you start by evaluating the market, estimating inventory needs, training staff, and sourcing suppliers and distributors. It is a very involved process. A 3PL expands your network by aiding in providing staff, multi-site distribution space, and flexible warehousing space as your reach grows. Not only that, but 3PL companies have a broad network of suppliers they work with and can make mutually beneficial introductions.

Returns Management

returns management

One of the greatest deterrents to gaining loyal customers is a lack of responsive customer service or a complex returns process. While most businesses would like to avoid returns altogether, having a solid return management process is crucial. Some of the best 3PL partnerships help manage the returns process, including receiving, returning items to the inventory management system, and disposing of damaged goods. 3PLs are experts in streamlining the returns process and ensuring a good customer experience. 


Expanding your network with a 3PL is one of the most cost-effective ways to scale a growing eCommerce. From helping streamline transportation to ensuring legal compliance, a partnership with a 3PL will be crucial if you don’t already have a broad network of relationships in those industries. Falcon Fulfillment has established relationships across transportation, legal, marketing, and a multi-site distribution framework. We are poised and ready to help you expand your network and business! Get in touch with one of our agents today.

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6 Fulfillment Lessons from 2021

6 Fulfillment Lessons from 2021

Fulfillment Lessons from 2021

eCommerce hit record numbers in 2020 despite the pandemic. The spike in online shopping continued through 2021, even as the lockdowns loosened. Those businesses that outperformed others were strategic in their investments and partnerships. Fulfillment partnerships were crucial in sifting the success stories. Here are a six fulfillment lessons from 2021.

#1 Diversification is Critical

The supply chain backlog will continue to be an issue through 2022 based on lockdowns and shortages coming out of Asia. The most successful eCommerce brands diversified their logistics plans by expanding relationships with suppliers, vendors, import/export partners, and fulfillment companies. Businesses can no longer have solitary partnerships within their logistics framework.

Manufacturing

Sourcing multiple manufacturing partners will be a strategy to continue to explore and employ during 2022-2023. Parts and products were hard to source in 2021. The main issues were the lack of products exported from Asia, which caused many eCommerce businesses to turn to domestic providers. Look for multiple manufacturing partners, both global and local. This can help hedge unforeseen delays, tariffs, or political regime shifts that might halt production. 

Fulfillment Partners

In addition to manufacturing, expanding fulfillment partnerships is another key to maximizing sales and minimizing delays. Choose a fulfillment partner that has multiple distribution centers. Multi-site fulfillment partners will be the most effective as they provide an additional layer of diversification. The best fulfillment partners will also have working and healthy relationships with other logistics-related organizations. E.g., Suppliers, shipping carriers, and shipping supply manufacturers. 

Technology

Lastly, it was a massive year for technology. When tech works, it’s fantastic; when it crashes, it is devastating. eCommerce companies that had tested and tried their technology and expanded their tech investment rose to the top of the food chain. The global pandemic brought a massive need for technology infrastructure for fulfillment and logistics. Some key areas where tech made all the difference were inventory management and real-time transportation tracking. 

#2 Offload Inventory

Offload Inventory - Fulfillment Lessons from 2021If 2021 didn’t bring massive sales of specific SKUs, it is time to liquidate those assets. Besides paying for unnecessary storage, having slow-moving or dead stock is also a symptom of overbuying or poor forecasting. Revisit your inventory management tools and determine what products are moving and are projected to continue to do well. Then off-load product that is no longer moving. One of the best benefits of using an automated inventory management system is accessing perpetual tracking. Leveraging this kind of technology can help strategically run marketing campaigns like BOGO when slow-moving stock needs to make way for higher-selling products. Some ideas to help with liquidating inventory include: 

#3 Automate Customer Service Communications

The post-pandemic consumer expects a higher level of communication. Confirmation and tracking emails to consumers have a 60% open rate. eCommerce customers want to know their order was processed, when to expect it, and if any delays occur. Ensure that your fulfillment communication strategy is as automated as possible. From confirmed order, to final delivery and satisfaction surveys, everything should be as seamless as possible. Invest in building out workflows that alleviate customer support tickets. 

#4 Build Out Longer Timelines

One fulfillment lesson from 2021 that stands above the rest is the likelihood for delays. From manufacturing to supply chain, delays were one of the single greatest problems and frustrations for eCommerce businesses. Those companies that rose to the top had contingency plans that built out longer timelines. They preemptively ordered parts and components before they actually needed them. Furthermore, they extended delivery times when they knew it wasn’t likely they would meet the 2-day shipping expectation. Building out a longer timeline will help hedge unavoidable lags in receiving, production, and final delivery.

#5 Social Proof Sells

social proofNo matter what type of eCommerce you run, social proof selling is here to stay. More than ever before consumers are consulting reviews, star ratings, and social media popularity that a brand has before making a purchase. This idea will continue to grow and become more immersive, especially as eCommerce and the metaverse converge

#6 Adapt for Continued Supply Chain Issues

The supply chain is slowly recovering but it is not in a place of strength. eCommerce has to be prepared to pivot at any moment in order to accommodate for ongoing supply weaknesses. Take into consideration the entire fulfillment journey. Falcon Fulfillment provides a full supply chain management suite. However, if you choose to manage your supply chain in-house or with another fulfillment partner ensure they can manage flexible shipment handling from your manufacturer as well as streamlined delivery logistics. These two components allow you to receive products in varying packaging and provide end-to-end communications on orders. 


We learned a lot of fulfillment lessons from 2021. The insights and strategies employed by the most successful eCommerce businesses are crucial in 2022 and beyond. Diversifying everything from manufacturing to technology helped companies overcome demand and delays. Offloading inventory, automating communications, and leveraging social proofing improved the bottom line. Lastly, building out longer fulfillment timelines and being prepared for continued supply chain weaknesses will separate the prosperous from the pitiful in 2022. Falcon Fulfillment can help implement all of these lessons. We are a people-first business that succeeds when our customers succeed. Get in touch with one of our agents today. 

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preparing for peak season fulfillment

9 Ways to Prepare for Peak Season Fulfillment

9 Ways to Prepare for Peak Season Fulfillment

It’s July, so why are we already discussing ways to prepare for peak season fulfillment? Because now is the time to start planning. The eCommerce peak retail season begins in October and runs through early January. Summer is the time to review your fulfillment process, inventory management, forecasts, and data to make informed decisions. eCommerce sales dramatically increased during the COVID-19 pandemic and haven’t slowed much. To prepare for peak season fulfillment in 2022, we need to start now. Planning Christmas in July will set your eCommerce apart when the tidal wave of purchases starts. Here are nine ways to prepare for peak season fulfillment. 

#1 Create Data-driven Demand Forecasts

It is crucial to review the most recent data you have regarding projected peak inventory demand. Delve into the data from the most recent peak season and quarter-over-quarter sales fluctuations. Dissecting the data is the best way to forecast accurately. Data points to focus on: 

Peak Season Fulfillment

Digging into the data is the most tedious and critical task when preparing for peak. eCommerce businesses typically have multiple systems collating their data. If you partner with a 3PL like Falcon Fulfillment, they can provide a baseline report for fulfillment-focused data. Start now so that you won’t be scrambling to capitalize on consumer spending by the time peak season begins. 

#2 Prepare Inventory

Based on your forecasting, begin to work with suppliers and manufacturers on projected sales during peak season. This helps to mitigate stockouts, backorders, and losing customers. The more information you can provide to your partners, the more likely you will have a triumphant peak. Pre-order stock where possible and negotiate with warehousing suppliers. This will help circumvent supply chain issues. Ensure you have accurate reporting for inventory levels. Several benefits of using an inventory management system include; accurate tracking, limiting human error, and full inventory transparency. Now is the time to implement new inventory management software and test for accuracy. 

#3 Utilize Distributed Inventory

To prepare for peak season, start leveraging multisite distribution. If you are fulfilling in-house, partner with a 3PL that can add multiple fulfillment centers. Leveraging distributed inventory enables you to offer lower shipping costs and increase conversions. eCommerce businesses can take advantage of 2-day, expedited, and free shipping with a minimum spend threshold. This can increase your average order value and reduce cart abandonment. 

# 4 Streamline Internal Communications

Successful fulfillment relies heavily on clear, transparent, and consistent communication. This is never more true than during peak when it can be exponentially difficult to get help or responses from fulfillment teams. Start now by reaching out to suppliers, manufacturers, 3PL partners, and other distributors that can make or break your peak season sales. Determine what worked well in past years and highlight problem areas. Set protocols in place now for who will be handling what aspects of the fulfillment process. Inform in-house teams of these plans as well as vendors and suppliers. Ensure that your eCommerce staff knows who to contact when situations arise. Have discussions with marketing and sales teams to review inventory levels regularly. This will improve efforts to push “in-stock” products and reduce “out-of-stock” disappointments.

#5 Automate Customer Communications

Communication is vital in establishing expectations for your consumers. Automate every aspect of customer correspondence that you can. When you have more orders than you know what to do with is not the time you want to have to send out 5000 individual delivery delay emails. Invest in email automation that can inform customers when key trigger events occur. Some examples are; processing delays, shipping and tracking information, back orders, etc. Wherever you can, automate customer communications to save valuable human resources. Save your customer service teams for complicated returns, customer satisfaction issues, and the inevitable “Karen’s” that peak season brings. Do your very best to under-promise and over-deliver. 

#6 Implement and Test IT Infrastructure

Nothing is more stressful than when your entire IT infrastructure crashes, especially during the greatest profit-making season of the year. Start today by researching, selecting, and implementing new IT infrastructure. From inventory management systems to email marketing efforts, ensure all the systems are tested and implemented early. These early tests will help iron out the kinks to ensure a smooth and seamless peak season. 

#7 Prepare for Returns

Simple Refund ProcedureReturns are annoying any time of the year, but they can cripple your peak season fulfillment. Returns eat up resources like no other aspect of your eCommerce business. Most eCommerce owners would like to avoid returns altogether, and there are ways to reduce returns.  However, avoiding returns 100% of the time is unrealistic. Now is the time to prepare a procedure to manage and minimize returns. How will a customer start the return process? What can they expect to happen next? It should be easy, straightforward, and exchange-driven. The work of processing returned products and updating inventory is often handled by your 3PL partner. Ensure every aspect of the return process is clear to customers and fulfillment partners that will be receiving returned products. 

#8 Plan to Launch Big Sales Early

When the Pumpkin Spice Lattes start rolling out, it is an excellent time to release your biggest sales for the peak season. It may seem too early for some, but this is the best way to encourage early purchases. Launching early promotions will help spread out the crush of orders in mid-December. Retail giants like Walmart and Target extend Black Friday deals throughout November and December. If they do it, why shouldn’t you? Encourage early shopping with loyal customers by offering early sales release dates that are exclusive to them. If you want to train your consumers for next year, limit it to October only! Train your customers to purchase early. Even if they miss it this year, they will not want to miss out next year. 

#9 Select a Reliable 3PL Partner

FALCON FulfillmentA good 3PL partner can make or break your peak season. 3PLs are fulfillment experts that help with a myriad of crucial aspects to prepare for peak season fulfillment. A 3PL like Falcon Fulfillment can help balance your inventory, leverage their multi-site distribution channels, help with return management procedures, prep goods, and staging spaces, as well as offer reliable and accurate inventory management. The services of a top-notch fulfillment partner don’t end there. However, don’t wait until you NEED a 3PL to begin the partnership. Start the conversation today so that your peak season fulfillment is seamless.  

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eCommerce headed toward a recession

Is eCommerce Headed Toward a Recession?

Is eCommerce Headed Toward a Recession? What to Know + What to Do

Is eCommerce headed toward a recession? Is the country? Globe? All signs are pointing towards a shrinking economy. The National Bureau of Economic Research (NBER) is the official entity responsible for determining when we are in an actual recession. There are a few different definitions of what constitutes a recession. For this article, we will use the same criteria used by NBER. According to them, a recession is a significant decline in economic activity spread throughout the economy. The primary identifiers include economic productivity and employment. Is the United States and, more specifically, eCommerce headed toward a recession? 

Consumer Spending

eCommerce headed toward a recession
Photo by Towfiqu-BarbHuiy

For this article, we will use statistics involving consumer spending habits (eCommerce sales and productivity) as our first criteria in determining whether we are in or headed for a recession. According to McKinsey, consumer spending is up more than 18% over projections based on pre-COVID statistics. Despite inflation rising to 8.5% in March 2022, US consumers are still shopping online at higher than expected rates. Economists attribute this to the savings stockpiled during the pandemic. 

What happens once that savings buffer gets used up? No one knows, but shrinking consumer spending is expected if interest rates and inflation continue to rise. For the time being, consumers continue to purchase goods online at a higher rate than in previous years. 

Unemployment

eCommerce headed toward recession
Photo by Eric Prouzet

The second indicator that eCommerce could be headed for a recession is seeing an increase in unemployment. If you have visited a fast food restaurant in the last seven months, you are well aware that companies still need employees. David Wessel, head of the Hutchins Center, states that there are at least two vacancies for every person currently unemployed and looking for work. That certainly doesn’t feel like a recession. 

With unemployment sitting at 3.6%, the lowest in decades, it appears that jobs are still plentiful. That being said, many financial experts, including lead economists for Bank of America, predict an increase in unemployment as inflation and interest rates rise. 

Considering these two elements, we might be satisfied that eCommerce is not headed for a recession. However, due to the economy's instability, raising concerns about inflation and long-term unemployment equal to the Great Depression, now is the time to prepare for a recession. Here are some tips to help eCommerce businesses ride out a recession. 

eCommerce Recession Proofing Tactics

Back to the Basics

Finding yourself in a recession without a cash flow plan or balanced budget will make enduring the economic downturn 10x more painful. Here are some of the critical basics to help recession-proof your business.

Recession Proofing - Basics

Cash is king. This is never more true than during a recession. Take stock of your business's cash flow and ensure you have a good handle on your monthly burn. Use your cash projections to modify and update your operating budget accordingly. Evaluate your current workforce needs and identify gaps or overages that would be the first to change if times got tough. In addition to determining workforce needs, spend time cross-training employees. Upskill them in such a way that should you need to reduce employee overhead; you have people who can step in to keep the business running even if productivity is slower. Measure, measure, measure your marketing! Make sure your marketing efforts are working, and modify them now if they are not! Lastly, focus on what you do best. Going into recession is painful, but concentrating on your niche can set you apart. This is never more critical than when wallets and purchasing power tightens. 

Manage Debt and Secure Capital Sources

Before you need the money, get the funding. The worst possible time to ask for money is when you are desperate. This is true in personal finance and business finance. Recession-proof your business by exploring capital resource options now. Get pre-approved for short-term business loans or lines of credit. Research and begin building relationships with capital investment firms that could have the ability to throw you a lifeline if a recession lasts longer than cash flow and savings can sustain. 

The other financial focus should be getting out of debt. Having high debt in a recession is an albatross. Paying high debt premiums will slow down momentum and tank your business. Work on paying down debt, so you have more margin to work with during a recession. 

Keep Current Customers Happy

Did you know? According to a marketing metrics study, the probability of landing a new customer is only 5%-20%, while selling to an existing one has a 60%-70% success rate. Best practices before, during, and after a recession include exclusive opportunities for loyal customers. Providing them with discounts and sneak peeks at new products. Involve your customers in your marketing efforts by interacting on social channels and offering customized deals and promotions in exchange for reviews, shares, and likes. Let your customers sell you! Invest in memorable unboxing experiences and curated add-on products. Throw in freebies, especially if you have some underperforming inventory you need to liquidate. 

Double Check Inventory Management Processes

The number one reason customers leave their brand of choice is when a product is out of stock or unavailable. Now is the time to review your inventory management processes and ensure adequate inventory levels and accuracy. A trusted inventory management system will help forecast sales and minimize low stock or out-of-stock situations. 

In addition, invest in flexible warehousing options when possible. Do not pay for the storage you don’t need. If you are being charged a flat rate, it is time to find a new partner. 

Nurture Partner and Supplier Relationships

Relationships will make a big difference if eCommerce is headed toward a recession. Spend time and intention reaching out to critical partners, vendors, and suppliers. Offer them flexible terms if the economy declines. Focus on building stronger ties to those who will make the most significant difference to your business in a recession. Whether it is suppliers or partners, ensure they have heard from you and have an open line of communication. Recession-proofing your eCommerce can also involve leveraging relationships your partners may have access to. Start asking which key vendors to contact to ensure you are in a great position if and when a recession hits. 


Falcon Fulfillment is a crucial partner when facing a recession. We offer flexible warehousing based on season, stage, or sales and frequently leverage our network of vendors, suppliers, and partners to help bolster our eCommerce clients. Whether or not eCommerce is headed toward a recession, Falcon Fulfillment is here for you.

We can provide fulfillment expertise, inventory management guidance, and accuracy through our state-of-the-art software. Furthermore, we can help deliver and design customer-wowing unboxing experiences. We would love to help with some of the most critical elements of recession-proofing your business. Let Falcon Fulfillment help get your eCommerce recession ready. Get in touch with one of our agents today. 

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3PL vs 2PL - Which Fulfillment Partner is Best?

2PL vs 3PL - Which Fulfillment Partner is Best?

3PL vs 2PL - Which Fulfillment Partner is Best?

If you are a growing eCommerce business that has been handling your fulfillment needs in-house, you might be wondering how to scale. Determining your needs, time constraints, and growth trajectory will be key in determining whether a 2PL vs a 3PL works best for you. The best fulfillment partner will be one that meets the needs of your business and your consumer. In this article, we will define and outline the pros and cons of utilizing a 2PL vs a 3PL partner. Which fulfillment partner is best for your eCommerce?

3PL vs 2PL - Which Fulfillment Partner is Best?

What is a 2PL

2PLs, second-party logistics, are asset-based carriers responsible for the method of transportation. This would include shipping lines, air freight providers, and van lines to name a few. 2PLs own the transportation assets that are responsible for delivering products from one place to another. Said another way, they are the airlines, sea-faring cargo ships, and rail transport companies that are contracted to fulfill product delivery. They are sometimes called “forwarders” due to the fact they mainly control one leg of the transportation journey. Whether the 2PL handles a portion of the whole delivery depends on the company and its resources. Some larger shipping lines like Maersk, handle primarily large, heavy, or wholesale deliveries. Other global 2PLs like FedEx can handle larger shipments and almost everything in between. 

Pros

  • They provide lower overhead than shipping the product(s) yourself. 
  • They offer simple contracts
  • It is easy to track goods 
  • You have the freedom to choose the mode of transportation

Cons

  • Provides a basic level of delivery 
  • Harder to scale
  • Relationship is transactional 
  • Is not invested in your eCommerce success

3PL vs 2PL - Which Fulfillment Partner is Best?

What is a 3PL

3PLs, third-party logistics, are organizations that specialize in integrated fulfillment. eCommerce businesses outsource their supply chain and order fulfillment through these entities. 3PLs provide services that include: warehousing, receiving, storage, and shipping. Some 3PL companies provide value-added services that include: inventory management, kitting, assembly, and custom packaging options. eCommerce as an industry and been growing steadily over the past decade and so has the rise in 3PLs. In fact, most fortune 500 (86%) and 100 (96%) companies use a 3PL fulfillment partner. Here are a few reasons why.

Pros:

  • They help simplify the fulfillment process
  • Faster delivery, fewer mistakes
  • Greater scalability 
  • Relatively low capital investment required 
  • Save money and time in the long run 

Cons:

  • You give up more control of the supply chain and fulfillment process
  • Businesses can become dependent on their 3PL partners 
  • Higher upfront costs initially 

If you are a growing eCommerce business and you are at the growth apex where managing the logistics has become a part-time gig. It might be time to consider outsourcing your fulfillment to an expert. Falcon Fulfillment specializes in high-volume eCommerce fulfillment. From receiving to final delivery, we can help to refine your supply chain process and create a workflow that will alleviate time constraints and still give you the insights to grow your business your way. Reach out to an agent today to discuss how we can help. 

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The Oceanic Effects of eCommerce

The Oceanic Effects of eCommerce

We’ve talked about the environmental impact of eCommerce in other articles and in what ways businesses can reduce their own negative impact on the earth.  Today, we’ll be discussing the effect that eCommerce has on the world's oceans and water supply, and how we can do better.

The Oceanic Effects of eCommerce

Oceanic Pollution

Human activities on land are responsible for over 80% of oceanic pollution. While the majority of it is attributable to nonpoint source pollution, which is pollutants that fall into rivers and inevitably end up in oceans, river-borne litter and plastic account for a significant fraction of the pollution in our seas. Excessive packaging, tags, plastics, textiles, and microplastics from eCommerce retailers often end up in storm drains, gutters, canals, rivers, and, the open sea.

This debris not only pollutes our water but also grinds together to form microplastics and micropollutants that marine life consumes. When this occurs, aquatic species become vulnerable to fatality and other serious health issues. Some contaminants, such as microplastic, cannot be digested by other creatures which leads to contaminated marine food. These contaminated food sources ultimately make their way to us and other animals.

The Oceanic Effects of eCommerce

Ocean Acidification Caused by Emissions

The ocean provides one of the most significant benefits to the earth in terms of climate change. It absorbs 30-50% of all CO2 created by fossil fuels each year, keeping our environment healthier for longer. The three major sources of greenhouse gas emissions are electricity, transportation, and landfills. Together they contribute almost 36,000 billion tons of emissions per year.

This becomes problematic when roughly half of these emissions are absorbed by plankton, algae, and other marine plants through atmospheric diffusion and photosynthesis. This alters the total pH of the ocean's surface water, accelerating acidification. The more waste we generate, the more emissions are released, the more the ocean absorbs, and the more acidic it becomes.

With the ocean acidifying quicker than it has in millions of years, species with calcium carbonate shells and skeletons are dissolving. As a result, organisms attempting to adapt to increasing acidity levels have a very narrow window of opportunity. Adaptation in such a short period of time causes slower reproduction as well as fewer and smaller offspring. Causing significant disruption across the ocean's food chain.

The Oceanic Effects of eCommerce

Ocean Noise

Sound travels faster and farther under the ocean's surface than land or in the sky. Many marine species rely on sound for communication, navigation, and other survival purposes. With an ever-increasing number of shipping containers transporting the world's eCommerce goods from shore to shore, the ocean has become a cacophony of sound, interfering with marine life's habitats and welfare. The incessant noise created by cargo containers, boats, ships, and other sea-bearing machines generates an auditory "smog" that reverberates throughout the ocean. This has a knock-on effect of limiting marine life's sensory range. This has been related to a large number of whale strandings, aquatic species abandoning their habitats, and the death of various invertebrates such as scallops, crabs, and squid.

It’s no surprise that oceanic pollution has a significant influence on the environment. With the right information, eCommerce can help reduce oceanic pollution, by selecting sustainable packaging, creating environmentally friendly products, and streamlining the fulfillment of transportation needs. It is important to be aware of the environmental effects we observe around us in order to better assist the environment and increase the sustainability of your company. Partnering with a 3PL that specializes in creating sustainable solutions is a great first step.  Follow Falcon for the most current information about eCommerce, the environment, and how you can help.

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The Pros and Cons of Dropshipping for eCommerce

What is Dropshipping?

Dropshipping is a retail fulfillment strategy for online businesses in which eCommerce acquires merchandise from third-party suppliers as shoppers place orders in real-time. For the merchant, inventory, shipping, and fulfillment is a hands-off process managed off-site by a third-party vendor.  When a customer places an order, a dropshipping supplier will manufacture and ship products on a seller's behalf.

What is a Dropshipper?

A dropshipper is a manufacturer or supplier overseeing a retail merchant's inventory and order distribution.  Because the bulk of running a business is managed by the dropshipper, the merchant’s main responsibilities are marketing their brand, attracting customers, and pricing items for a healthy profit margin.

How Does Dropshipping Work?

Dropshipping is relatively simple and consists of two steps.

  1. Dropshipping is an online business model that provides inventory, warehousing, packaging, and shipping on behalf of a seller.
  2. When a shopper places an order, that order is relayed back to a seller's dropshipper. The seller will purchase said product(s) in the order, and the dropshipper will manufacture/create the order, package it, and ship it directly to the customer.

Learn How Dropshipping Compares to a 3PL

The Advantages of Dropshipping

It’s likely that start-ups and first-time business owners are interested in the dropshipping business model because of the seemingly off-the-bat benefits.  Let’s take a closer look at the pros and cons of dropshipping.

No In-house Inventory

Managing your own inventory is stressful.  Fulfilling orders, managing returns, and overseeing customer service consume a lot of time and focus.  With a dropshipping business model, the inventory of a seller is directly managed by the dropshippper’s warehousing facility, along with order returns and basic packaging needs.  This reduces overall costs by eliminating personal fulfillment expenses, the need for employees, and the need for inventory space.

Little Start-up Costs

A huge green flag for start-up eCommerce is the little to no start-up cost that dropshipping provides.  To get started, simply choose your products, connect them to your store, and pay once a product is sold.  With no fulfillment processes or inventory to worry about, start-up costs are low and it’s relatively quick to get the ball rolling.  

No Fulfillment Responsibilities

Compared to other eCommerce, sellers who are using a dropshipping business model do not have to worry about other areas of fulfillment.  With no inventory or packaging to manage, sellers can focus on creating products and advertising them to the right audience while their dropshipper does most of the work.  This appeals to first-time sellers, new entrepreneurs, and those wanting to sell with minimal responsibility. 

The Disadvantages of Dropshipping 

While there are many benefits to dropshipping, it has its equal share of disadvantages.  Let’s consider a few examples and how they compare to the upside of dropshipping.

Loss of Control

One of the disadvantages of dropshipping is the seller's lack of control.  Since brands do not have to manage their own inventory, fulfillment, and order shipping, they lack the means to customize the customer’s shopping experience.  This often results in generic packaging, average or extended delivery times, and possible quality control issues.  

Quality Control

With a lack of control, comes a possible lack of quality.  If a seller is unaware of the quality of product their dropshipper is providing, a customer may contact a seller over a quality issue the seller never even knew about. Additionally, there is no way for sellers to quality control any inventory being sold to customers beforehand.  This could result in damaged items, damaged packaging, complaints, and possible unhappy customers.

Branded Shopping Experience

Yet another downside of loss of control over certain areas of your business, is missing out on providing a branded shopping experience to your customers.  Although some dropshippers allow for some package customization, there are few options when compared to fulfilling on your own or with a 3PL.  Limiting branding limits the perspective your customers have of your company.  What is to distinguish you from millions of Amazon sellers?

At the end of the day, dropshipping is the perfect fit for many people and night quite the right one for others.  Understanding and deciding the pros of cons of dropshipping and in what ways dropshipping could affect you and your business is important when deciding on the future of your eCommerce.  If you’ve outgrown your dropshipping business model, you’re looking to scale, or are interested in discussing what a 3PL can do for you, contact one of our agents today.

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3PL VS. 4PL, What Are They?

3PL VS 4PL, What Are They?

3PL vs 4PL, what are they? How do they differ? What can eCommerce businesses stand to gain or lose by using one over the other for their fulfillment needs? We hope to shed a little light on which type of fulfillment company you should choose for your business needs. 

What is a 3PL

Third-Party Logistics is an industry term most are familiar with. For companies looking to outsource their entire logistics process, 3PLs are the answer.  They are able to handle the management of receiving, inventory warehousing, packaging, and shipping services, letting eCommerce businesses focus on other important areas of their company.  Some 3PL businesses offer additional logistics services known as value-added services.  These include inventory management, kitting, assembly, and more.

What is a 4PL

Fourth-Party Logistic Providers act as consultants.  While their services are similar to a 3PL, they lack the physical means to move inventory through the supply chain themselves.  Instead, a 4PL will contact and negotiate services between the necessary companies on your behalf.  4PLs are often used when an eCommerce does not have staff to oversee transportation and logistics operations. 

3PL VS 4PL: Main Advantages

The primary distinction between 3PL VS 4PL is that a 4PL manages the whole supply chain and does not provide any physical warehousing or assistance.  A 4PL will instead coordinate multiple services, including 3PLs, to aid your eCommerce. A 3PL, on the other hand, is primarily focused on the logistics management process and personally provides physical warehousing, logistics, and value-added services.

3PL VS 4PL is a heavily debated topic within the eCommerce and logistics industries for which option is ultimately better.  The truth is, each one is meant for different situations and business needs.  Understanding the key differences between 3PL VS 4PL will ultimately affect your company on the bottom line.

The Benefits of a 3PL

There are several benefits to working with a 3PL partner. Firstly, they provide the skills and expertise required for enhanced performance in areas like fulfillment, transportation, and logistics. Through established networking relationships and expert knowledge in the fulfillment sector, 3PLs can upgrade your systems and simplify your overall operation in terms of efficiency and cost. Additionally, 3PLs can provide insight into obstacles that arise during shipping operations, day-to-day fulfillment, or even customer service. 

Scalability

Partnering with a 3PL provides flexible warehousing that can scale according to the needs of your eCommerce.  Depending on your order volume, a 3PL partner can scale operations and inventory space up or down to provide everything your eCommerce needs, and nothing of what you don’t. This is essential for seasonal eCommerce businesses. 

Shipping Solutions

With networking partners and insider shipping solutions, a 3PL can provide the best bang for your buck when considering order shipment for your business. Your 3PL partner can negotiate better pricing based on their high-volume purchasing power. Without a 3PL partner, your eCommerce faces stiff prices named by private shipping companies and little to no cost advantage over competing eCommerce. 

Control

A 3PL partner offers a balance between management and personal control over your eCommerce.  Your business can fully automate the fulfillment process without sacrificing customization or control.  Work with your 3PL to personalize your fulfillment process and make it the perfect fit for your eCommerce while maintaining package customization, person-to-person communication, and brand experience.

Although partnering with a 3PL can result in considerable time and cost savings, giving up control of the delivery process can be tough for some eCommerce owners. Similarly, a 3PL partner can save businesses money in the long run, however, they often have larger upfront costs compared to in-house fulfillment and other options.

The Benefits of a 4PL

Many 4PL partners provide comprehensive technology solutions which can be a critical component for eCommerce and their supply chains. Knowing that your entire logistics process is handled by a single point of contact allows you to sit back and truly watch the backend of your business seemingly run itself.

Vendor Management

A 4PL partner serves as a single point of contact for your entire supply chain. This means there is no coordinating between multiple suppliers, waiting on hold, resolving issues, or finding new partners when one falls short.  Instead, your 4PL partner will do all the planning and communication on your behalf while you focus on other aspects of your business.

Supply Chain Visibility 

A 4PL can assist you in developing and implementing cloud-based systems that collect data from a variety of external and internal sources. This sort of system offers valuable insight into all aspects of your supply chain from a single dashboard. End-to-end supply chain visibility allows you to know where your inventory is at all times and provides transparency over each of your supply chain partners.

Data Solutions

Data solutions are used by 4PL partners to track fulfillment and monitor conformance to standardized regulations, ensuring efficiency from on-the-road operations via invoice accuracy and payments. Additionally, 4PL partners contribute to the overall quality and accuracy of shipping data via data certification, data integrity checks, and ongoing data maintenance. One of the most significant downsides of utilizing a 4PL partner is how much eCommerce must rely on their 4PL once integrated. Typically, these suppliers provide key services that, over time, may reshape an organization's entire supply chain and build a reliance on them. Working with a 4PL can also be costly for small and medium-sized eCommerce businesses.

At the end of the day, it’s important to look at your business and determine which logistics partner would be the best fit for you.  Although both are great options, one provides advantages the other will not.  A 3PL works well for growing businesses interested in working alongside a single logistics partner while still maintaining adequate control and personalization.  A 4PL is geared toward established eCommerce businesses looking to fully automate their entire logistics platform through a single point of contact.  What businesses sacrifice in control and personalization, they make up for with efficiency and optimized supply chain performance.  When partnering with Falcon, you receive full transparency, professional fulfillment services, and above all else, you retain control.  Talk with one of our agents today.

 


How a 3PL Partner Helps Create a Sustainable Business

How Does a 3PL Partner Create a Sustainable Business?

Sustainability has been a growing concern for many consumers and companies alike.  Fortunately, the 3PL industry has been paving the road toward sustainability in an easily obtainable way.  In this article, we’ll be outlining how a 3PL partner can create a more sustainable business for your eCommerce and save you money in the long run.

Reduce Transportation Emissions

Transportation contributes significantly to growing greenhouse gas emissions. A 3PL partner can provide strategic transportation solutions for eCommerce.  3PL partners help eliminate unnecessary transportation stages. They have the ability to convert transport from air freight to sea freight—by shifting inventory to more optimized locations and using the most efficient co-loading routes. Furthermore, working with a 3PL boosts the fill rate per transport unit per tank of gasoline. This allows you to use higher capacity trucks and offset routine vehicle maintenance that would otherwise fall on your shoulders.

Learn about Falcon's eCommerce Shipping Solutions.

Transition to Sustainable Packaging

While cost-effectiveness and safe delivery have traditionally taken precedence over sustainability, many eCommerce businesses are rapidly resorting to eco-friendly packaging to reduce their environmental impact and fulfill rising customer expectations. A 3PL partner can help eCommerce by sourcing packaging materials that are optimized, greener, recyclable, and responsibly sourced. With the expansion of eCommerce shipping, it's critical to work with a 3PL that adheres to environmental standards, assists in lowering packing and disposal costs, and helps your eCommerce meet and hold the same standards as your shoppers.

Learn more about transitioning to sustainable packaging.

Optimize Energy Usage

When operating a warehouse, significant amounts of energy are used. Lighting, extensive warehousing equipment, IT infrastructure, temperature regulation, and other elements are included.  All of these factors lead to high energy usage, operating costs, and an expanding carbon footprint. The right 3PL partner will aid eCommerce companies in reducing their environmental impact via optimized warehousing. This includes; energy-efficient floor designs, solar panels, sustainable packaging alternatives, responsible waste removal, and much more.

Learn how Falcon optimizes energy.

Aid in Reverse Logistics

All procedures involving the reuse of products and materials are referred to as reverse logistics. This includes recycling, refurbishing, and reselling returned items. In reverse logistics, the product is transferred from the buyer to the manufacturer before being disposed of or repurposed. Working with a 3PL can help your company practice reverse logistics effectively and significantly minimize the carbon footprint produced by returns and discarded items.

Final Thoughts

Keeping up with the continuously evolving eCommerce industry is challenging, especially with the increasing pressure to become more and more sustainable.  When you partner with a 3PL, things get easier.  Knowing you have a reliable partner to help your eCommerce reduce overall transportation emissions, adopt sustainable packaging, optimize energy usage, and aid in reverse logistics is a stress relief that every business owner needs.  Get in touch with Falcon today to discuss how we can help your sustainability.

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Q2 eCommerce Trends of 2022

How are eCommerce Trends Changing

The pandemic of 2020 pushed the world into faster technological advancement. Typical growth rates of 13-15%, shot up to 31% growth in 2020. Now, three years later, we can expect faster advancements, delivery, and speedy checkouts. Each quarter we see a new wave of eCommerce trends that will affect the bottom line of businesses around the world. Let’s review the eCommerce trends of Q2.

Compared to eCommerce Trends of 2022

eCommerce Trends of Q2

The eCommerce Landscape is Becoming More Competitive

By the end of 2022, eCommerce accounted for 20.4% of worldwide retail sales, up 10% from five years previously. This fast expansion of eCommerce is linked to a variety of factors, however, Covid-19 is the most prominent.

Credit: Statista

When stay-at-home orders began in early 2020, businesses made a swift transition into the online world. This technological jump pushed companies and consumers alike into a buying journey they had never experienced, which ultimately ignited the ever-burning flame of digital shopping that we continue to see today.

Three years later, and despite brick-and-mortar retailers are making a comeback, eCommerce remains supreme. Because of the rise in online shopping, thousands of eCommerce retailers sprung up almost immediately after the pandemic began. This trend shows no signs of slowing and with each passing year, the eCommerce sector becomes more crowded and more competitive than ever. Successful startups are becoming more difficult to manage, and established eCommerce are encountering more frequent and aggressive competition. As newcomers drive pricing down to attract buyers, established retailers struggle to maintain market share and jobs.

Increasing Advertising Costs and Reduced Campaign Effectiveness

As new eCommerce businesses flood the market, all are vying to find and attract the attention of customers. This raises the overall cost of advertising and lowers the total return on ad investments. For example, Facebook advertising costs 47% more than it did the previous year, and this trend is only anticipated to continue. Furthermore, as a result of Apple's new privacy update in iOS 14.5, cross-app data sharing is now restricted unless users voluntarily opt in. Because the vast majority of customers want to protect their privacy, data sharing is often denied. This raises the cost and lowers the effectiveness of Facebook and Instagram advertising.

Credit: FLOW E-commerce

eCommerce Globalization to Avoid Growth Bottlenecks

The total addressable market (TAM) is a common constraint for eCommerce growth and expansion. As companies hit their local and domestic consumer limitations, eCommerce brands will soon venture into the global arena to expand their reach. Not only will this help eCommerce reach more consumers, but it will assist shoppers in finding new and foreign brands. According to a recent poll, 76% of online shoppers have made purchases from an eCommerce site outside their own country, solidifying the future global expansion of eCommerce.

Localizing Supply Chain to Reduce Manufacturing Costs

eCommerce is seeking more cost-effective solutions as supply chain delays and interruptions persist far beyond 2020. With raw material shortages and rising air and sea freight costs, business owners are moving to a more localized supply chain. Companies are shifting from low-cost production in China and toward higher-priced manufacturing and distribution in the United States. Businesses are choosing a local distribution facility to avoid record-high freight costs, delayed inventory, and delayed shipments. Although localizing your production may cost more upfront, your customers will receive orders faster, inventory will remain stocked, and transportation and distribution expenses will be reduced, possibly saving you hundreds in the long run.

 

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Partnering with a 3PL

Prior to 2020, 3PLs were leveraged by most fortune 500 companies around the world. Now, post-pandemic, not only do 90% of fortune 500 still works with 3PL partners, but small to mid-size eCommerce businesses are making the switch as well. This is due to increased awareness of the enhanced efficiency and reduced fulfillment costs that 3PLs can provide. Working with a 3PL allows eCommerce businesses to better optimize fulfillment, scale flexibly, minimize inventory shortages or delays, adopt the best shipping rates, and even provide sustainable solutions and alternatives to reduce a company's carbon footprint.

Learn more about partnering with a 3PL

Renewed Focus on eCommerce Sustainability

Consumers and businesses alike are becoming more environmentally conscientious. This has ushered in new trends of sustainability, ethically sourced products, and morally sound business models. Shoppers are are choosing more sustainable options over cheaper or faster alternatives. Because of this, eCommerce are quickly making the switch toward sustainable packaging, waste minimization, renewable energy, and a more people-focused business strategy.

Learn more about eCommerce sustainability

Alternative Payment Options

In the wake of high inflation, consumers are adjusting spending habits and shifting towards more frugal budgets. They are sacrificing non-essential items and services, leaving some eCommerce wondering what to do. Thankfully, the buy-now-pay-later (BNPL) options that appeared in 2020, are quickly growing in popularity. Afterpay, Sezzle, and Affirm are examples of popular BNPL options that are slowly taking preference for many shoppers. Whether BNPL options are used to work with inflation, offer financial flexibility, or something else entirely - any eCommerce will benefit from introducing BNPL options at checkout.

Final Thoughts

At the end of each quarter, there are bound to be new trends for your eCommerce to capitalize on. From eCommerce globalization and localized manufacturing to 3PL partners and higher competition, it’s tough out there. Make sure to follow along with Falcon to get up to speed on the latest consumer and eCommerce trends.

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