Why a 3PL Can Help with eCommerce Growth

 Ecommerce and retail sales have been on the rise for the last several years, and we saw a substantial increase last year as lockdowns pushed companies to shift to work from home. It’s estimated that US ecommerce grew 44% in 2020. It was the largest registered ecommerce growth in the last 20 years. Businesses who had never foreseen themselves moving online were forced to pivot from the traditional retail brick-and-mortar space. The pandemic was the catalyst that many researchers believe gave us a glimpse into what work life would look like in the future.

Experts are predicting even more momentum towards ecommerce growth for the near term. Most corporations have made it clear that work from home is here to stay even after the pandemic comes to an end. CEOs of some of the largest companies have already decided to move to WFH permanently. As a result, businesses in the ecommerce sector are looking to 3PLs as the core of their businesses. It is estimated that almost 90% of Fortune 500 companies are now using third party logistics companies.

How will businesses keep up with the increase in demand and ensure customer satisfaction?

The simple answer is to partner with a 3PL. You want experts in shipping, logistics, and inventory management to take ownership of the entire process. 3PL’s have a robust network of providers that correlate to a more cost effective, efficient, and scalable approach.

01 Infrastructure

3PLs have the warehouse, equipment, staffing and technology already in place to help businesses scale quickly. With the infrastructure already in place, it gives businesses the ability to focus on their core competencies. For example, if your business were to see average orders go from 50 a day to 5,000 a day, it would add tremendous pressure on your existing processes while it would be business as usual for a 3PL.

Utilizing an inventory management system gives 3PLs a leg up as it allows for shipping high volume faster. The cloud-based order management platforms that companies such as XPDEL offer allow customers to have their orders and returns processed at an expedited pace. Customers can track their orders through the process giving them greater visibility. It also gives the 3PL staff the ability to quantify its performance giving way to higher productivity.

02 Economies of Scale

An advantage of using a 3PL is they are able to scale quickly and economically. As a 3PL continues to purchase more product or equipment, the price per unit decreases. The business partnering with the 3PL and the customer who ordered the item are both able to save costs

On a micro level, that can be applied to items such as shipping boxes and tape. When you’re buying thousands of a specific unit, those costs become cheaper across the board which result in lower shipping costs for the customers. The same cost savings measures work with 3PL partnerships with fleet leasing or partnerships. It’s a domino effect that in the end leads to greater customer satisfaction on both fronts. For businesses, it allows you to allocate the extra funds into other areas of the business.

03 Market Expansion

Looking to expand into a new market? It can be a daunting task for businesses. By using a 3PL, businesses avoid the many pitfalls that arise from expanding into areas where they don’t already have a presence. There is no need to research local carriers or rent space because 3PLs already have distribution networks that give them easier access to customers.

The level of flexibility that your business needs to have in a new market is even greater. Working with a 3PL allow you those opportunities to make adjustments without the potential devasting errors.

04 Faster Shipping

Studies have shown 75% of ecommerce business is lost to shopping cart abandonment. Of the many reasons why customers choose to not continue, not seeing an express shipping option is near the top of the list. That’s why most businesses are choosing to rely on a 3PL to get orders processed quickly and delivered in as short as a few hours. With ecommerce giants such as Amazon and Walmart implementing same day and next day shipping, it has become mecessary for businesses to remain competitive. Customers expectations have risen and want their orders to arrive a lot faster and for a lower cost.

05 Customer Experience

Customer experience is at the forefront even more so today than ever before. 3PLs offer the accuracy, transparency, and personal touch your customers are looking for. Studies show that 13% of customers never return if their shipping is not on time. Adding a custom note to a package or ensuring that over 99 percent of your orders are delivered on time can be a decisive factor in customer loyalty.

How XPDEL can help

Backed by years of experience at XPDEL, we know what our customers expect so our focus remains on integrating enhanced technology while maintaining the human touch to reduce operations costs and increase efficiency. With competition getting stiffer by the day, it is important that your business makes the necessary investments to provide the best experience possible for you as well as your customers.

Original Source: Xpdel

How 3PLs Help Support Same Day and Next Day Delivery Demands

 If a business offered same day delivery a few years prior, it would have probably set them apart from their competitors. Today Amazon, Walmart and other ecommerce chains have made same day and next day delivery somewhat of a norm. Surveys show that roughly 80% of consumers would prefer a same day delivery option. This is why many businesses today are choosing to partner with a 3PL to ensure that their customers receive orders as fast as possible. 

With a focus on being agile and scalable, 3PL’s have the resources and expertise to support your businesses goals. Their relationships and networks give them the ability to support customer needs while keeping shipping costs down for businesses and customers.

Predictive Analytics in 3PLs

In order to satisfy these customer demands, 3PLs are also relying on data science now more than ever. Businesses today are realizing that to gain a competitive advantage there must be a focus on the picture that the data is painting.

Predictive analytics are helping 3PLs determine where and how much inventory to position at a specific warehouse. The ability to forecast ahead of time what customers will be purchasing allows business to process and deliver orders at an expedited rate. If an item is stocked in a warehouse or hub where the demand is high, the greater the chance it gets delivered quickly. Out of stock rates are also reduced, and carriers can optimize scheduling pickups to be able to get customer their orders in sometimes as little as a few hours. If we use perishables as an example, being able to estimate the amount consumers will be purchasing gives 3PLs the ability to relay that information to suppliers. Instead of your business waiting for a new shipment of bananas to arrive, you would have an accurate amount on hand to prepare in anticipation of impending orders. The customer order that may have taken 2-3 days to arrive can now reach its destination a lot faster.

These results in factors such as an increase in customer satisfaction not to mention a reduction in costs. With more cash on hand, you’re able to reallocate those funds to generate more revenue. These changes can also have a positive impact on investor sentiment.

With the improvement in productivity, your business would also be doing its part in helping reduce the amount of food wasted. Estimates show that 30-40% of the US food supply is wasted which is both an enormous ethical and financial issue for companies. Your approach to addressing this matter preemptively will show your customers that your focus is not only on the bottom line.

3PL Presence in Multiple Markets

The data only goes as far as your ability to execute. You can know what products the market may be in need of, but your business needs to have an established presence there to capitalize.

3PLs have fulfillment centers in central locations to be able to tap into numerous areas at the lowest costs and at the fastest rates. If you have a fulfillment center in a specific region, you can decrease the amount of time it takes for an item to go from your inventory to the customers hands.

For instance, you have a customer in Connecticut looking to make a last-minute purchase for a birthday party they forgot about. With a 3PL having a fulfillment center setup in the north east, it can often commit to same day delivery. Customers do need to submit orders by a certain time to receive it on the same day as the cutoff time may vary by location.

Having a local fulfillment center helps decrease the shipping costs as the customer may be within the same zone as the FC. Carriers often use zoning maps to quote shipping costs which work in the customers benefit when a 3PL is within that zone. This contributes to even lower shipping costs as 3PL’s utilize economies of scale. The high volume 3PLs see make the process more cost effective for all parties.

Combating Shopping Cart Abandonment

Customers desert their shopping carts for a number of different reasons. Surveys show that 25% of customers abandon their carts if a same day delivery option is not available. When working with a 3PL, you maintain the ability to cross off that potential issue that you would have faced without a same day delivery option.

Return policies are a contributing factor when it comes to shopping cart abandonment. Sometimes customers may feel that return policies are opaque in nature which give them a cause to pause. Many 3PLs used cloud-based inventory management systems. These platforms give businesses and customers the transparency they need that contribute to getting them to complete their orders. The efficiency that they provide as well as the visibility that customers have access to make it easier to complete an order.

Last Mile Delivery Specialists

The part of supply chain that tends to get overlooked is what’s known as ‘Last Mile Delivery’. It’s essentially the process of the goods leaving the fulfillment center all the way to a customer’s doorsteps. It can be the most expensive part of the delivery and make up to 28% of the delivery costs. When orders leave a warehouse, factors such as traffic and government regulations that restrict trucks from entering certain area get overlooked. A 3PL utilizes a route optimization plan to combat these issues. This impacts the supply chain for your customers as the delivery process becomes more efficient leading to quicker delivery times. Being able to continue to improve your customer experience is advantageous for any business looking to compete in the new world. That is why as a 3PL, XPDEL maintains its focus on expanding into more markets to establish even more market reach.

Original Source: Xpdel