You’ve heard great stories of how many regular folks make tons of money via ecommerce stores. Now you decide to get into it. You’ve studied the model and have come to the conclusion that you don’t want to join the price wars that’s a regular feature of the dropshipping model.
So after much research, you settle for a number of products that you believe will sell based on your market analysis (Click here to read more on how to conduct effective market analysis). Then you set up shop and, amazingly, after tweaking your ads, you start getting a decent number of orders. Then gradually, you discover that your basement can’t hold your inventory anymore and that every available space in your home is becoming a warehouse.
And as if that isn’t bad enough, you now don’t have any time for yourself or loved ones. You are dealing with quite a lot: You have to handle queries from customers, take orders, pick them up, package them, send them over to the delivery company and…
No, there has to be a better way, right?
Yes, there is…
3PL Fulfillment – A Brief Overview
When you need a company that will help you handle those logistical nightmares that we call warehousing, keeping inventory, picking and packaging orders, and shipping them to your customers, you are talking about the services provided by a third-party logistics fulfillment service (that’s the same as a 3PL fulfillment company).
This shouldn’t be confused with a drop shipping company. While a drop shipper also does everything a third party logistics fulfillment company does, there’s a fundamental difference…
A drop shipping company buys and stocks inventory at its expense. It owns the stock. You, the merchant, only enjoys an arrangement that allows you to list the products the dropshipper has in stock on your store. When a customer purchases from you, you place an order at the dropshipper’s site, provide the customer’s shipping details and the dropshipper delivers it to your customer as if it was directly from you.
But in the case of a 3PL service, you buy all inventory with your own money. They ONLY help you warehouse them, process, package and deliver to your customer. But at every point, you own the products they are simply handling for you.
The benefits of using a third party logistics company for all your fulfillment are clear. Let’s talk about a few of them…
1. It frees you up to focus on the things that are your core competencies. If you run a store and have done your due diligence, you’ve taken time to master traffic generation, conversion and customer support, among other things. With this major time-consuming aspect off your list, you can concentrate on these areas.
2. You enjoy a higher quality of service. Anything handled by professionals is usually much better than that handled by amateurs no matter how great their intentions are. Your logistics as an ecommerce store owner aren’t different. People who live and breathe fulfillment will definitely do it better than you. For your customers, they enjoy a much higher quality of service.
3. You can enjoy your business more. You simply can’t enjoy your work if it eats up every waking hour and leaves you thinking about unfinished task even when you’re lying down. As people who run ecommerce stores, we understand how having other people take care of inventory, order processing, packaging and shipping can make the business something you run with joy.
4. It helps you make more money. If you can focus on the core drivers of sales in your business, you’ll definitely make more money. There’s nothing complicated about that, right? Visit https://3pllinks.com/third-party-logistics-provider-save-business-money/ to see how this helps you make more money by cutting down your costs.
It’s important that we point out that there are a few things that might NOT seat well with some people about using a third party for their logistics. Here are they are…
1. You incur additional cost. The service provider you engage is running the business in order to turn a profit and so this means that you’d pay extra to enjoy the convenience. Depending on how big your operations are, it might eat too deep into your profits. So think twice before going this route if you’re just starting out.
2. It ties down your capital. In contrast, dropshipping allows you to enjoy all those benefits without having to pay a dime before your customer has actually purchased the product from you.
NOT all businesses can use the dropshipping model in order to take a hands-off approach to their e-commerce business. For such businesses, using a third party that’s been proven to handle logistics efficiently is definitely a smart way to move their business forward.