A Deeper Understanding of 3PL Warehouses and FBA
Many are now jumping into eCommerce business bandwagon. Online stores are opening here and there. But what’s ironic is, despite having tons of people getting into eCommerce, just a handful of them really know how to navigate and operate their online business. What’s funny is they are uninitiated with jargons that are used in this sector. Among these are 3PL warehouses.
As you engage yourself into online business, you will be taking, accepting and fulfilling orders online. For amateurs, this may make them scratch head for few seconds on how to streamline the process or if there’s a system that can be use to have a smooth sail of everything. This is where third party logistics companies will come into place. So what specifically does a third party logistic company do and what exactly is third party logistics definition?
Do You Know What You’re Getting Yourself Into?
With the massive advancement in internet technology, faster internet connectivity and more ways to connect online, it is not surprising why more and more people and established businesses are tapping to eCommerce.
Third Party Logistics or simply 3PL are basically a logistics provider that is offering outsourced logistics services to their client companies either for a part or all their supply chain management. It’s easy to get lost with countless of 3PL warehouses and companies to choose from nowadays. Fortunately, there are companies that you can partner on which can point you to optimal 3PL company for your business that you can rely on processing and fulfilling your orders. Few of these companies businesses are AiHello where they can point you to the best 3PL warehouses for your merchandises.
Engaging Partnership
As much as possible, make sure to take partnership with dedicated and committed companies that can point you to ones that can efficiently the role of a third party logistics company. With this, you can put more emphasis on manufacturing, promotions, advertising and selling products. Like the example partner above, it can help in eliminating worries of both logistics and warehousing while you on the other hand focus on expanding your business.
Third Party Logistics Advantages
Logistics are our area of concern. We’ve been doing this day in and day out. Even if you, personally have the resources to handle the logistics on your own, we can provide unparalleled support and assistance in supply chain partnered with smart positioning within supply chain itself.
Sales Forecast - Forecast by location, warehouse and aggregate
Inventory Management - Analyze & Forecast Inventories to Never Run Out of Stock Again
Automated Email Campaigns - 100% 'One Touch Setup' Email Automation
Analyze Products - View sales velocity, returns velocity, best selling skus & much more
Sync Multi-Market - Access The Whole Online Retailers Ecosystem by Using Amazon, Ebay, Alibaba, Shopify And Many More
Location Analytics - Know what sells where and how much
Hitting the Trifecta!
For anyone who is in the eCommerce business, being able to hit fulfillment, logistics breakdowns and shipping are the ultimate goal for a smooth operation and successful business. But it’s easier said than done. Believe it or not, this trifecta could be crippling to the part of the business. To make sure that your business won’t suffer from it, following are the primary factors to be mindful about when selecting 3PL warehouses.
Assuming that you have correctly chosen third party logistics companies, you can reap one of the main benefits of 3PL services; it’s saving time through its automation fulfillment. Rather than worrying and hiring staffs to take care on product shipment, you will have a partner whose main focus is to making sure that your merchandises and goods ends up to your customer’s doorsteps.
Finding the Right Service Provider That Fulfills the Role of a Third Party Logistics Company
Enough with the side notes, more on the real deal.
- Work with industry experts – the primary focus of any reputable 3PL warehouses is optimizing how the company is handling shipments. They have authority with regards to warehousing, fulfillment and shipping.
- Managing internationalization – one of the major roadblocks of hitting the international market is working on global fulfillment. Handful of people worldwide have time to deal with customs, documentation, duties and several other issues related to overseas sales. Through outsourcing, it’s offsetting that responsibility. It’s because your chosen logistic partner can’t just make selling across other countries simpler but also, they can expedite delivery time while lowering shipping costs.
- Limiting overhead – among the most difficult aspects of setting up warehouse of your own all lies in overhead. The overhead to lease the space and finding a team who can efficiently work on order fulfillments. It’s hard to keep up with these costs especially if you’re just a startup. By working with a professional 3PL warehouse, it can lower your costs while scaling fulfillment processes.
The FBA
When you are into eCommerce business, you aren’t limited to 3PL warehouses to help grow and expand your business. Literally, there are many options that can help you to climb your way up to success. And among these options is the FBA or otherwise known as Fulfillment by Amazon.
Despite the fact that Amazon is a global online marketplace, not many are accustomed to FBA. Thus, leading them to ask the question, what is Amazon FBA? As a matter of fact, the FBA business model is booming and it keeps on generating interests among individuals by hundreds or thousands per day.
Essentially, FBA is almost the same as conventional eCommerce businesses today. But in FBA, it isn’t you who has to fulfill the orders. What happens here is, Amazon will be storing products on your behalf and even select, package and ship it out to your customer’s address. In other words, FBA meaning is, you can build brand faster and easier without stressing yourself of the warehouse logistics, courier, packaging materials and so forth. Using Amazon’s private labeling at the same time, it opens up new avenues in building your brand as well as website. Thereby, it automatically increases your business worth and value.
Fulfillment by Amazon: Explained
With fulfillment by Amazon business model, it opens up new doors in leveraging the robust customer base and distribution network that Amazon has established. As what mentioned, Amazon is going to warehouse products, complete order fulfillment and provide customer service. Young entrepreneurs can then conceal their identity as a big and established corporation without the problems of acting like one.
In order to sign up for an FBA account, merchants living in Mexico, Canada and the US have to have a Selling on Amazon account. The merchants can start adding products to Amazon’s catalog either by incorporating their inventory management software within Amazon’s platform, in bulk or one at a time.
Listings on their website are shown with “Amazon Prime” logo. The best part about this, there’s no additional charge for the Amazon Prime free 2-day shipping and there’s also free shipping on all eligible orders. FBA could be integrated directly to the website of the vendor. This way, customers may shop through Amazon without having to leave the third party website.
A Word from the Big Guy
However, Amazon recommends their merchants to use its eCommerce service in ensuring that their products are going to be eCommerce ready. This is the only way they can provide guarantee that their products can be securely and safely transported to their customers. They are making boxes, polybags, bubble pack, stretch wrap and several other shipping materials easily accessible to vendors Selling on Amazon. There is some fulfillment by Amazon fees while other services are optional.
Following are the benefits you can reap assuming that you’ve started your FBA business right.
- · Low startup cost – when using FBA, it’s not necessarily a requirement to fork out considerable amount of money to launch your business. You can literally save in staff, storage costs, shipping, supplies, office rent and everything you need for the success of your eCommerce store. Well obviously, there is fulfillment by Amazon fees that you have to settle to use their service. Don’t worry too much about the fee as it’s justifiable from the benefits you can get from their platform.
- · The mark of trust – we know that in business, it is extremely important to build trust among customers. When you’re using Amazon FBA, it makes your store become a trustworthy name right there and then despite you’re just in the early stages of your operation. This is due to the reason that you’re under the umbrella of trust that Amazon has built among its consumers for years it has been in the
- · Pull in more customers – let’s face the fact, one of the major challenges of any startup businesses are marketing. Finding, attracting and convincing customers to buy from you is beyond words to explain particularly for new entrepreneurs. This is true especially in crowded online marketplace such as Amazon. It’s comparable to finding a needle in a haystack. Just picture how hard it could be. But thanks to Amazon FBA, you can make your newly opened store to easily standout and attract customers.
- · It’s all taken care of – much like in 3PL warehouses, Amazon FBA takes care of everything you need to catapult your business to success. Be it packing, shipping or warehousing, you have a cushion to whatever help you require. Try to envision it, you have the Technology, Competency and Excellence of one of the world’s biggest online retailers supporting your business. See how much you can reap from such.
- Outstanding customer service – an online marketplace as big as Amazon will never reach its stature today without remarkable customer service team. And just like the point prior, their CSR will be the responding to any customer demands, queries, returns and several other concerns. Thus, the only thing you need to do is to focus on how you will grow your business
The Bottom Line
Regardless of the niche for your eCommerce store, it is critical that you are backed with the right support. This will serve as your protection towards any bottlenecks that will come along the way and if ever there are, you know that you can overcome it anytime soon. Whether it is 3PL warehouses or Amazon FBA, you need to allot time in grasping the concept of each option. This is the only real way of making the most of each world.
