What is a 3PL partner?

A 3PL (third-party logistics) partner offers outsourced logistics services, which include anything that involves the management of one or more facets of fulfilment, including inventory management, warehousing and other forms of logistics to support ecommerce businesses.

With the rapid growth of ecommerce in the 2000s and then again during the COVID pandemic, 3PL companies have expanded their services beyond simply picking and packing to include supply chain integration, POS and transportation services.

As ecommerce continues to evolve, 3PL partners are constantly in demand, this is due to businesses continuing to grow and operations becoming too inefficient to handle in-house.

Throughout this guide you will gain vital information on what a 3PL company does, how they work, the main benefits of partnering with one and much more.

What does a 3PL do?

The main goal of a 3PL company is to handle different aspects of an ecommerce company’s logistics and fulfilment. Below are some of the most common features offered by 3PLs.

Inventory management – Managing inventory goes beyond simply storing products. A reliable 3PL partner will be able to sync your inventory with your online store and provide real-time visibility into inventory levels across fulfilment centres.Once your 3PL receives and stores your inventory, you should have full visibility into key metrics, such as quantity and products sold. This ensures you always know what’s available for shipping to customers.

Storage – All 3PLs will have one or more warehouses where they can store your goods until they are ordered and need to be shipped to a customer. These facilities are able to store pallets of products with adequate shelving, racking and storage areas. For ambient food storage such as chilled goods, some warehouse facilities will have temperature-controlled areas to accommodate this.

Picking and packing – When an order is placed to buy your products, a 3PL will be able to offer the service of firstly picking that product from where it is being stored and then packing it adequately in your packaging. The packing process can be customised for certain promotions or gifting, if required.

Kitting – Customise how your inventory is prepared for customers with kitting: a value-added service provided by most 3PLs that lets you tailor the packing process and add specific touches (like adding a sticker to every order).Kitting can be very time-consuming if done in-house and it is a process that a 3PL partner can streamline to add as a successful cog in your ecommerce fulfilment strategy, whilst also saving you time and money.

How do 3PLs work?

A third-party logistics provider handles a company’s supply chain tasks such as order fulfilment, inventory management, shipping, and returns. This approach allows you to scale services as needed and control costs efficiently within your business.

3PLs integrate their systems with your ecommerce storefront using APIs, enabling seamless communication and real-time inventory visibility. They employ advanced technologies, like warehouse management systems and automation, to streamline operations and reduce errors.

3PL pricing is typically a mix of subscription fees for platform access and pay-as-you-go charges for services like picking, packing, and shipping. Tailored pricing ensures you get solutions suited to your specific logistics requirements. If you want to speak to us here at e2b about our 3PL services, then please contact us for more information.

Benefits of working with a 3PL

Often a company will immediately think that the primary benefit of using a 3PL service like ours is cost saving. Whilst this is true, we believe there are also other value-added benefits that an ecommerce business can gain from partnering with a third-party logistics provider.

• Expertise – 3PLs have a team of experts that span across the entire range of logistics and fulfilment services they provide. This means they are the best place to help with your 3PL needs and give advice from a strategic standpoint.
• Time-saving – One of the biggest benefits of working with a 3PL is the amount of time they can save you every day, whether this is time fulfilling orders or managing stock and inventory. A good 3PL partner can take this on and give you time back to focus on further growing your business.
• Growth – 3PLs have the infrastructure to be able to grow your demands of their services as and when you need them to. This could be ramping up fulfilment services around peak season or even just growing the fulfilment needs of your business as they grow. It saves any potential bottlenecks that could happen.

What’s the Difference Between 3PL and 4PL?

The key difference between 3PL and 4PL lies in their roles and focus within the supply chain.

A third-party logistics provider manages specific logistics tasks, such as warehousing, order fulfilment, and transportation. They own or operate the assets and infrastructure necessary to carry out these tasks efficiently.

In contrast, a fourth-party logistics provider takes a strategic, overarching role by managing and optimising the entire supply chain. They act as a single point of contact for the client, coordinating multiple 3PL providers and ensuring seamless integration across all logistics activities.

Choosing between 3PL and 4PL depends on whether your business needs tactical support or comprehensive supply chain management.

e2b a leading 3PL

If you’re interested in learning more about what a 3PL can do or want to start using 3PL services, e2b can help.

For a discussion about your business, growth plans and potential blockers, contact us today on 03303830400 or fill out our online contact form.