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Smart Warehousing Sep 22, 2021 8:27:42 AM 10 min read

Does 3PL Ecommerce Fulfillment Make Sense This Holiday Season?

With a worldwide pandemic and an overwhelmed supply chain, this year’s holiday season will be different from the years before. 2021's peak season is looking to be very busy for online retailers. US holiday retail sales in 2021 are predicted to increase 2.7% to $1.093 trillion.

E-Commerce alone will account for a record 18.9% of holiday retail sales. With this type of growth, e-commerce business owners need to take a look at how they will meet the increasing demand and if using a 3PL would make sense.

What Is a 3PL?

A third-party logistics or a 3PL partner is a business that handles all the logistics for your business. Essentially, you are outsourcing your supply chain to a company that specializes in it. This means they would take over your warehousing, your storage, manage your supply chain, schedule your transportation, handle all materials and distribution. Instead of you handling all the small details and planning, you turn over your inventory and send them any orders you receive and the 3PL will take care of the rest. 

Why Use 3PL E-Commerce Fulfillment During Holiday Season?

With this year shaping up to be extremely busy and the national supply chain already struggling to keep up, having someone in the industry can help you be successful. A 3PL partner can save you time, money, and resources when it comes to e-commerce fulfillment.

A 3PL partner allows you as a business owner to accomplish more, grow faster, and save you some stress along the way. Here are some things to think about when you’re trying to decide if it makes sense to use 3PL e-commerce fulfillment during this busy season. 

Time

One simple question you can ask yourself is if you have the time. Running your business's logistics during the holidays can be extremely time-consuming and can take vital time away from you focusing on other parts of your business like advertising and customer service.

When you are doing your own e-commerce fulfillment, you will have to manage your inventory levels, process all orders, update your website with products and their availability, pick and pack your orders, get them boxed and shipped out with shipping labels, and make sure they arrive at your destination in the time you had promised your customer.

While doing this, you will have to run the other important parts of your business. If you have low order volume and aren’t looking to grow substantially, then you could do your own e-commerce fulfillment. However, if you have a large customer base and want to continue to grow to a national footprint, you may want to look at 3PL e-commerce fulfillment options for this peak season. 

Costs

Another important factor to take into consideration when you are looking at whether to outsource your e-commerce fulfillment is your costs. This can be one of the biggest factors when determining which route you should take. If you outsource your picking, packing, and shipping to a 3PL, you can reduce your overall costs.

If you choose an established 3PL, they should already have a trained staff, processes, and connections with shipping carriers. If there was one year to consider outsourcing due to costs, this may be the year. Due to an overwhelmed supply chain and low shipping capacities, costs for businesses are increasing.  

In fact, U.S. retailers will face an extra $223 billion in costs of goods sold this holiday season due to jumps in the costs of freight, manufacturing, and labor.

A 3PL with trained warehouse staff means they can easily add your products to their pick and pack systems. This means you don’t have to pay money to train staff, you don’t have to go out and find the workers and you don’t have to worry about scheduling or having a workforce available.

Outsourcing the labor portion will help you cut down on costs because you won’t have to have as many salaried workers. This can also save you time and stress. If you don’t already have a trained staff, you would benefit from hiring a 3PL who does, especially as orders increase over the holiday season. 

Along with saving money on labor, using 3PL e-commerce fulfillment can also save you money when it comes to shipping costs. Most reliable and established 3PL companies already have connections with national carriers and get discounts due to their shipping volume. 3PLs that receive those discounts can pass those onto you. They can also help make sure you are getting your product shipped. Shipping capacities are low this year and if you don’t have a relationship with a carrier, you may find it hard to ship inventory and orders. 

Resources

Are you low on storage? Do you have trouble finding workers? Are you getting more orders than you can handle?

If your answer is yes to any of these questions, then it could be a good idea to hire a 3PL to take care of your e-commerce fulfillment. If you’re experiencing a high rate of growth and aren’t able to meet the new demand, a 3PL can help you. Since they already have the warehousing space, the trained labor, and proven systems, they can quickly integrate your product into their logistics and be able to fulfill your orders.

Trying to resolve these issues can take a lot of time and money and could lead to stunted growth for your business or unhappy customers. An established 3PL can make sure the process is seamless. 

Why Smart Warehousing

When you start looking at 3PLs to help you, you want to make sure you pick the right one. Smart Warehousing has been in the industry for 20 years and has the experience and the expertise to help your business. We can handle big or bulky, frozen or temperature-sensitive, and we can process e-commerce or B2B orders. 

With proven processes and a national footprint, Smart Warehousing can not only help you meet the demand of your current customers, but we can help you expand and grow your business across the country. With 34 warehouses across the nation, we can make sure your products get to your customer quickly and that they are satisfied. Contact us to learn more about how Smart Warehousing can become your partner.

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