3PL Warehousing in E-commerce: Scale Your Business With EComxpert
3PL Warehousing in E-commerce: Scale Your Business With EComxpert
When it comes to the increasingly competitive e-commerce landscape, managing fulfillment operations in-house is not always efficient and productive. Moreover, the complexities of supply chain management can leave small businesses overwhelmed while draining time and resources.
Outsourcing fulfillment to a third-party logistics or 3PL warehouse significantly reduces the burden of managing supply chain operations. From inventory storage and order processing to shipping, a third-party logistics provider takes care of it all.
So, what exactly is a 3PL warehouse, and why should you hire one? Dive in to find out!
What is a 3PL Warehouse?
A third-party (3PL) warehouse is a service that allows businesses to outsource supply chain logistics operations, including transportation services, warehousing, picking, packing, and shipping to the end consumer. Often used interchangeably with a fulfillment center or warehouse, 3PLs typically offer the same services as an order fulfillment company.
What a 3PL Warehouse is Not
While we talk about what 3PL warehouses are, it is worth understanding what a 3PL is not.
A 3PL warehouse should not be confused with a private warehouse or a warehouse that solely fulfills orders of their own products. While private warehouses are owned and managed by retail stores or manufacturers, third-party logistics provider companies own and operate 3PL warehouses. In addition, the accounting, billing, and shipping software private warehouses use are often not flexible enough to manage the inventory and accounting of multiple clients.
How Does a 3PL Warehouse Work?
The term ‘third-party’ indicates that a company is outsourcing its order fulfillment to an external agency. The company does not own the warehouse or hire and manage warehouse employees. As a 3PL customer, the business rents storage space for its products in a warehouse that stocks products for other companies as well. Warehouse employees receive products from multiple companies and work with different carriers to ship orders to customers.
Types of 3PL Warehousing
The emergence and popularity of the e-commerce business model have led to significant growth in the logistics industry and the variety of services it offers. Since business needs are unique, the type of 3PL services will also vary from one business to another.