Help Your E-commerce Save Money with a 3PL

Wanting to own your own time is a common reason why people decide to launch their own businesses. They want to be the master of their own schedule. However, many business owners quickly realize that when you launch an e-commerce it can eventually begin to own you. Two of the largest and most critical elements of any e-commerce are shipping and fulfillment. Doing it yourself in-house can save you some money in the short term but it could hinder your growth in the long run. Let’s walk through a few ways your e-commerce can save money with a 3PL.

Whether you rent or own warehousing facilities, you will need to stage, store, and ship goods. If you own your warehouse, do you have space to expand when necessary or beneficial? If you rent warehouse space, do you have flexible options to meet fluctuating demands? The accuracy of your sales projections will determine if you’re in the sweet spot of warehousing, or whether you need to look for more financially-savvy options.

Alternatively, when you’re partnered with a 3PL, you have the flexibility and freedom to scale when you need to – and when you want to. Furthermore, a 3PL partner offers scalability options without the long-term commitments you would encounter otherwise. This cost savings and flexibility allow e-commerce to maximize sales and scale readily.

Depending on the size and quantity of your products, you will likely need a few extra hands to get them to your buyers. If you are managing in-house fulfillment, you are 100% responsible for hiring, quality control, management, and down-sizing when necessary. If you have an employee walkout mid-shift, guess who is still on the hook to get orders out the door? Yep, it’s you. With a 3PL partner, you are free to run as many product promotions, launches, and sales collaborations as you can, without the risks of personal staff or process delays. A 3PL manages all the personnel required to scale up or down as your e-commerce needs change.

No matter what you are shipping, it must be packaged. As a solopreneur, you will likely run into MOQ (minimum order quantities) on packaging materials. This includes; boxes, filler, bags, and more. Depending on the upfront investment cost, it could limit the number of products you are able to deliver in one shipment. If you sell more than one type of product, it further complicates your packaging spend. With a 3PL partner, you are afforded much higher flexibility in packaging services due to the high volume of products purchased and strategic packaging vendor relationships leveraged by most 3PL’s. In addition, depending on the 3PL partner, they can offer personalized packaging which elevates your brand awareness and visibility.

The least expensive way to ship most products is to do it yourself. You pick it, pack it, wrap it, drive it to the shipping location, and update the customer with the delivery details. Then you monitor tracking to ensure it makes it to the customer. Even though a 3PL partner will not necessarily lower your shipping costs, it will alleviate the cost of time. You no longer will be working IN the business but ON it. A quality 3PL will not only get your product shipped in a timely manner, they will also have an inventory management system that will inform you and the customer of the delivery status.

Every e-commerce will have to manage returns and the average percentage for e-commerce hovers between 20-30%. This isn’t a big deal if you are processing 5 orders or less per day. However, just beyond this threshold is a tsunami of returns that threatens to slow down the processing of future orders. Working with a 3PL gives you the peace of mind that returns will be received, reshelved, and reshipped when an exchange is desired. Furthermore, 3PL’s that have invested in high-tech IMS will be able to keep more accurate quantities so that you don’t miss out on sales of products that simply haven’t been added back as available inventory.