3PL is a third-party logistics provider that manages mainly eCommerce logistics operations. They take care of the complete order fulfillment process, which eCommerce retailers outsource to focus on their core competency, such as product development. There are two different types of 3PL companies. One is the all-inclusive provider, taking care of the entire process from order confirmation to delivery. The second type provides some of the stages of fulfillment for companies that prefer to manage their warehouse or use their trusted carrier service for order delivery.

Usually, most of the 3PL companies provide similar services like order fulfillment companies that include the following:

• Warehousing
• Inventory management
• Shipping and receiving
• FTL and LTL freight shipping
• Picking and packing
• Kitting and customization
• Reverse logistics (returns)

Benefits of Hiring a 3PL Provider

The most significant benefit your business can get from hiring a 3PL is getting relief from handling order fulfillment on your own and focusing on other business aspects such as product development, sales, and marketing. Apart from that, there are other operational benefits such as the following:

• Cost reduction – Working with multiple companies, 3PLs have a business relationship and association with most freight companies in the area. So, they are in a much better position to negotiate the best deal based on order volume and frequency.

 

• Scalability – Being experts in logistics, 3PLs have the professional capability to help you adjust to the shift in demand at any given time of the year. They help you change with the peaks and troughs efficiently without you committing to capital when not required.

 

• Better customer service – Nowadays, with the increasing prevalence of online shopping, consumers quickly become more demanding and expect next-day or same-day shipping. Thanks to the vast distribution network of a 3PL provider, you can offer customers faster delivery irrespective of when the orders are placed.

 

• Mitigate risk – Hiring a 3PL provider gives you the leverage to provide alternate arrangements of fulfillment to your customers if any shipping delay occurs. Another essential factor for your business is that you are protected from any damage or loss of goods.

 

• Get knowledge and expertise – Fulfillment processes such as warehousing and shipping can be daunting to handle on your own. When you partner with a 3PL provider, you get the opportunity to learn the details of fulfillment and understand the whole process much better.

 

• Help with international logistics – If you are planning to sell your products in the global market, then it is best to hire a 3PL provider for sure. You need an expert to hold your hands and steer you to growth and success when you are spreading your wings. 3PLs will cover documentation, customs, duties, and any other required papers you need to produce at the country’s borders.

 
Currently, more eCommerce companies are hiring 3PL service providers in India, becoming aware of the benefits of a strategic partnership enabling growth. You can expect your 3PL provider to meet the business requirements and fit the company structure to provide your customer with a seamless order delivery experience. A market analysis claims that the Indian 3PL industry will grow at a CAGR of 8.36% by the end of 2022.