Third-party logistics (or 3PL), is when an ecommerce business hires an outside company to handle their logistics and supply chain activities.
What is third-party logistics (3PL)?
Instead of managing logistics themselves, ecommerce businesses can partner with a specialised provider to take care of tasks like storing, transporting, and delivering their products. It's like having a logistics expert on your team, so you can focus on your core business and let the third-party logistics (3PL) provider handle the logistics side of things.
Amazon is a well-known example of a business using 3PL providers. When you order a product from Amazon, it doesn’t always ship directly from Amazon's own warehouses. Instead, they work with a network of various other providers who handle the storage and delivery of products from different sellers.
What are the benefits of 3PL?
By partnering with a 3PL, businesses can benefit from their expertise, infrastructure, and networks. They can save time and money by not having to build and manage their own warehouses or hire a fleet of delivery trucks.
Imagine you have a small online business selling handmade jewellery. As your business grows, it becomes challenging to handle all the shipping and inventory management on your own. This is where a 3PL comes in. You can team up with a logistics company that has the expertise and resources to handle these tasks for you.
The 3PL provider will store your jewellery in their warehouse, manage your inventory, and ship the products to your customers when orders come in. They'll also take care of any returns or exchanges. This way, you can focus on designing beautiful jewellery and growing your business, while the 3PL takes care of the nitty-gritty logistics details.