As an eCommerce brand, one goal you may have is sustained growth. But learning how to scale your business in order to accommodate this growth is key. Because fulfillment and logistics are major parts of running a healthy eCommerce business, having the right 3PL partner is crucial for success. Here are some of the ways the proper 3PL can help scale your business.
As your business grows, order fulfillment becomes a more demanding portion of your workload. When an experienced partner is handling these operations, you’ll have more time to focus on what you do best, such as design, marketing, user experience, or other essential functions that help sustain growth.
In the meantime, a good 3PL partner will prioritize your inventory management—the cornerstone of a successful eCommerce business—and guide you in appropriately managing it with quarterly inventory audits, SKU Velocity Analysis, and other tools and techniques. You should feel confident in your fulfillment team’s ability to help you accurately track your available products, and expect them to provide guidance on how to properly move your inventory to maintain ideal supply levels. This will allow you to minimize storage fees, yield positive cash flow and maximize profits while reducing logistics costs.
So, while you’re improving your product design, honing your marketing strategies and optimizing the user shopping experience, you can rest easy knowing the inventory management responsibilities are in trusted hands. Sales are the most important metric of eCommerce success, and the ability to move inventory well is a contributing factor that should not be overlooked.
Fulfillment can present challenges as you scale. As order volumes rise, so does your risk for errors. With the serious impact just one incorrect order or delayed shipment can have on customer retention, you’ll want to keep these incidents to a minimum.
3PLs often operate under Service Level Agreements (SLAs) which require them to meet certain KPIs; accuracy and speed are commonly dictated in these agreements. A quality fulfillment partner will have the systems and processes in place to maximize the picking, packing, and shipping of your orders to customers, improving overall efficiency. Many 3PLs use sophisticated Order Management Systems (OMS) and Warehouse Management Systems (WMS) to optimize batch picking efforts. With the manpower of dedicated packing and shipping teams to complement these technologies, not only will you get your orders out on time, but you’ll likely do so with far fewer errors.
An ideal 3PL provider will be able to help you make vital performance-based decisions by more closely monitoring and analyzing key fulfillment-related data. Partnering with a fulfillment provider comes with access to their technology stack. Through innovative technologies, such as Order Management Systems and Inventory Management Systems (IMS), your fulfillment provider will help you to create real-time inventory visibility. This up-to-date data can be used to make informed decisions at multiple levels of your eCommerce business. For instance, knowing exactly how much inventory you have on hand and how fast each SKU sells are insights that would help you determine the best time to hold a clearance sale.
This visibility also supports omnichannel retail efforts. Identifying not only how many SKUs are available, but also where they’re being held can make future allocation significantly easier. If you have physical stores in addition to your fulfillment centers, you may be able to make use of these locations to get customers their orders even faster by shipping from the starting point that is closest to the final destination. Additionally, you’ll be able to notify your systems of the exact quantity of a product available at their nearest store, which appeals to consumers who want in-store pick-up. These efforts can help you appeal to new customers while strengthening your relationships with current ones.
Choosing the right fulfillment partner can be a game-changer. The first step is learning what you need to know to make the best decision for your business. Download our FREE e-guide to find out what you should be looking for.