Are you looking for a 3PL? Maybe you’ve never worked with one, but you’re questioning if now is the right time. Or maybe you’ve been working with your 3PL for a while, but you’re questioning whether they fit your business. Either way, we’ve got you covered as we explore hybrid fulfillment.
What is a 3PL?
It’s an extension or partner of an e-commerce business– with the 3PL focused on the logistics activities. To sum it up, the 3PL is focused on getting the right product to the right customer on time. This includes order fulfillment, pick and pack, printing the correct labels and address, and having carrier contracts to ensure that the end product gets delivered to the customer on time.
How much does it cost to transition from self-fulfillment to using a 3PL?
There’s usually a cost for every touch– pick, pack, and ship an order. All the different touchpoints result in a fee. Keep an eye out for our cost calculator release, which will help you determine the specific cost based on your needs. Feel free to reach out for assistance even before its formal launch.
Can you choose how many touches you want?
Yes, 3PLS offers many different services. For example, you may have one-way logistics where they pick, pack, and ship, but they don’t do returns that may come back to the actual eCommerce business themselves, or 3PL could handle the return for a fee.
How do you know when to start looking for a 3PL?
A common reason is growth. If you’ve surpassed your capacity for existing fulfillment functions in your business, it might be time to consider a growth plan. Ask yourself if you want to scale your current fulfillment process. Would you need more warehouse space? More staff? All that is an added cost. Or would you prefer to outsource the fulfillment to a 3PL equipped to handle scalability?
Another reason to start looking for a 3PL is specialization. Gabb Wireless is an excellent example of one of our customers utilizing hybrid fulfillment with a 3PL for one of their specialized products. They create safe digital devices for kids, and one of their products requires serialization, so they use a 3PL specialized in serialization.
Another specialization is big and bulky. The benefit to using a specialized 3PL in big and bulky is that they know how to pick, pack, and ship big and bulky products and have carrier contracts specializing in big and bulky to save you on shipping costs for heavier items.
Sometimes it’s more of an experience, not specialization per se, in handling a specific product type. For example, if you’re shipping medical devices, you might want to find a 3PL with a lot of experience in shipping medical devices.
What is Hybrid Fulfillment?
Hybrid fulfillment is a fulfillment model in which a business is self-fulfilling and utilizing one or more 3PLs. This could look like sending a particular product that is big and bulky to one 3PL that specializes in big and bulky and fulfilling the rest yourself.
If you want to improve your delivery time, you can utilize multi-location fulfillment. If you are on the East Coast and you are self-fulfilling but want faster shipping times for those on the West Coast, then it’d be a good idea to diversify using hybrid fulfillment and get a 3PL on the West Coast to shorten delivery times.
An example of a business utilizing hybrid fulfillment is our previously mentioned customer, Gabb Wireless. They split up their inventory and work with a specialized 3PL for their specialized product, and self-fulfill the rest.
If you already have a 3PL, how do you know if you should switch?
It’s kind of like being in a romantic relationship. If your 3PL is not meeting the expectations you set from the beginning, first have a conversation with them to review the SLAs and manage expectations. If it continues on, and it’s comprising your customer experience or company values, maybe it’s time to start looking for another 3PL. If the partnership relationship isn’t working, there are better fish in the sea.
How do you manage the 3PL relationship?
Before you start, set expectations and negotiate your contacts so SLAs are defined because it will make managing the relationship easier. Include those expectations in the contracts whenever possible– you’ll thank us later. Now keeping excellent and clear communication is essential to maintain that relationship. Quarterly business reviews are pretty standard and should be discussed at least once a quarter.
Preparing for Peak Season in Q3 with your 3PL
What do you need to ask your 3PL?
Ask questions in retrospect to the previous year that you want to correct, and realign with the expectations you set from the beginning. Ask your 3PL if they are ready to meet those expectations in Q4 and meet timelines. If you notice trends like slowing down on cycle times, ask about it and ask how you can lend your support.
If You and Your 3PL Aren’t a Good Match…
How long is the process of switching 3PLS?
It depends. How big is your footprint in 3PL? What’s the complexity? If you have a specialized product, it can be more challenging. Finding a new 3PL and realigning and transporting inventory can take months. If you want to switch close to peak season, dive into communications with your 3PL and plan to switch after. Focus on refining and improving your existing partnership, and don’t say you’re looking for a new 3PL.
But if you’re self-fulfilling and considering utilizing a 3PL in Q3, it might help you manage peak-season logistics.
How does technology play a role?
Technology is a massive part of the industry. With hybrid fulfillment especially, utilizing technology that facilitates the relationships between 3PLs and merchants is fascinating. Both can see who’s fulfilling what and get a holistic view of what’s happening as if they are working from opposite sides of the country using real-time data to see what order was shipped.
What to Look for When Searching for a 3PL
Something that is highly underrated is seeking 3PLs using transparent technology. Question how their technology is improving communication, visibility, and transparency. Understanding the tech stack is crucial to strengthening the 3PL relationship.
How long are these 3PL contracts?
Depends on a lot of aspects. More extended contracts may provide additional discounts, but if you’re brand new to using a 3PL, you may not want long contracts. Make sure you provide appropriate “outs” if SLAs are not met.
How We Can You Find a Top Tier 3PL
Our 3PL Network is like a dating service, except every candidate is guaranteed to be top-tier. We match you with your perfect pair based on your business, criteria, and needs. Every 3PL in our network has been vetted to ensure they are of the highest caliber. We sit with each e-commerce business and understand their criteria, volume, and what they value. We have a matching software to pair you with the best-fit 3PL service and present it to you to evaluate. Your 3PL represents your brand, so you want to ensure you have the right fit.
As the e-commerce landscape continues to evolve, adopting a hybrid fulfillment model and leveraging the expertise of 3PLs can significantly enhance the customer experience. Stay informed about industry innovations and consider joining networks to optimize your fulfillment processes. Remember, your 3PL reflects your brand, so finding the right fit is crucial, and don’t be afraid to contact us for help.
