HomeBusinessA Detailed Guide on How a 3PL Company Works

A Detailed Guide on How a 3PL Company Works

For e-commerce businesses, order fulfillment is an integral and critical part of their operations. As the businesses expand, they may realize that it is no longer feasible for them to fulfill customers’ orders in-house. This is where they should think about choosing third-party logistics. As a growing e-commerce business, you need to do your research before you choose an order fulfillment company. For that, you need to be aware of how a 3PL company works. This guide will provide you with all the information that you want to know about 3PL processes. 

Receiving

A 3PL needs to have an inventory on hand to ship orders. Therefore, the 3PL has to receive an inventory by accepting and storing it. Not every 3PL follows the same process for inventory receipt and storage. Some require the clients to fill out their receiving order forms so that they know which product they will be receiving. 

3PL Warehousing

3PL stores the items in the fulfillment centers after receiving the inventory. There is a distinct storage location for every SKU, such as a shelf or a bin. Every 3PL has a different storage capacity as 3PL warehouse space varies. E-commerce businesses should associate with 3PLs with more than enough space for their current inventory.  

Picking

The 3Pl fulfillment process begins once customers are placing their orders. Some 3PLs require e-commerce businesses to upload their orders to their systems using spreadsheets. Other 3PLS use advanced technologies that integrate the system of e-commerce businesses with their platforms. This integration automatically pushes customers’ orders into the 3PL systems, after which the orders get assigned to the warehouse picking system for collection.   

Read Also: How to Select the Appropriate Contract Management Software for Your Business

Packing

After collecting all the orders, they are sent for packing. The packing materials used are based on the capabilities of the 3PL, preferences of the e-commerce business, and the items to be shipped. ’s capabilities, your brand preferences, and the items being shipped. Some common packing materials are unbranded boxes, bubble packing, dunnage, etc. 

Shipping

The next step is order shipment. Most 3PLs print shipping labels on behalf of the e-commerce business. Various carrier companies partner with 3PLs such as DHL and UPS. These companies collect orders from the 3PL warehouses for shipment and onward deliveries to customers. The speed of delivery depends on the policies and partners of 3PLs.   

Returns

The 3PL companies also provide return processing services. They have this arrangement with the e-commerce business that in case customers return the orders, they will be shipped back to the 3PLs, and afterward, the 3PLs will process the returns and restock or dispose of them based on the preferences of the e-commerce businesses. 

Conclusion

Startup e-commerce businesses should consider partnering with 3PL companies to focus on other essential business processes such as marketing. However, if these companies are new to outsources, then the processes of 3PL companies would be a mystery to them. Therefore, the e-commerce business must be aware of how a 3PL works so that they can make an informed decision when choosing a company for fulfillment services. 

IITSWEB
IITSWEBhttps://iitsweb.com
IITSWEB is the Chief Business Development Officer at IITSWEB, a Magento design and development company headquartered in Redwood City, California. He is a Member of the Magento Association and an Adobe Sales Accredited Magento Commerce professional. Jan is responsible for developing and leading the sales and digital marketing strategies of the company. He is passionate about ecommerce and Magento in particular — throughout the years his articles have been featured on Retail Dive, Hacker Noon, Chief Marketer, Mobile Marketer, TMCnet, and many others.
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