For Amazon sellers struggling to keep up with the demands of their customers, the burden of managing a reliable shipping and logistics operation can feel overwhelming. Fortunately, relying on a third-party logistics (3PL) provider is an increasingly popular solution that could save time, money — and sanity. By partnering with an experienced 3PL that understands your unique business goals and Amazon’s system integration requirements, you can reduce complexity while streamlining your shipping processes and providing superior customer service. Read on to learn more about the top three 3PLs for Amazon Sellers today: what they offer and how they’ll help ensure success in the eCommerce space!
What Is A 3PL, And How Can It Help You As An Amazon Seller?
Third-party logistics (or 3PL) companies can assist eCommerce businesses in scaling by providing a variety of services to streamline retail processes, such as inventory management, logistics, and return and exchange management.
Here's an example of how a typical 3PL shipping companies service works:
- You send inventory to the 3PL directly from your storage space or the manufacturer.
- In its warehouse, the 3PL receives and organizes each SKU.
- When a customer places an order, then you can either manually submit it to the 3PL, or they can receive it automatically through the software.
- A 3PL employee selects the ordered items and packs them into boxes for shipment, along with a receipt.
- The 3PL forwards the shipments to a local shipping service provider (e.g., DHL, UPS, FedEx, USPS).
Using a 3PL (Third-Party Logistics) service to manage and fulfill orders for an Amazon Seller can be incredibly helpful. A 3PL takes away much of the stress of fulfilling orders, freeing up time for sellers to focus on other business areas. Here are four key benefits of using a 3PL:
Related: What's the Difference Between Warehousing and Storage
Amazon’s Fulfillment Alternatives to FBA
1. Fulfillment by Merchant: Fulfillment by Merchant (FBM) is a great option if you want to handle your own inventory and fulfillment. You can store your products in any location, be it your home or a warehouse. The key benefit of this option is that you have complete control over the entire process from start to finish.
2. Seller-Fulfilled Prime: Seller-Fulfilled Prime (SFP) allows sellers to fulfill orders for Amazon Prime customers using their own resources and still qualify for free two-day shipping. This option requires additional effort on the part of the seller but provides an opportunity to take advantage of Amazon’s expansive customer base.
3. Third Party Storage & Fulfillment: If you don’t want to handle fulfillment yourself, Third Party Storage & Fulfillment (3PSF) could be the right fit for you. With this option, you can store your products in a third party warehouse or distribution center and have them fulfill orders on your behalf. This is a great solution if you don’t have the time or resources to manage inventory and shipping yourself.
Benefits Of Third-Party Storage & Fulfillment
By outsourcing fulfillment tasks such as order management, packing, shipping, and returns processing to a specialized partner with expertise in the field, your business will become more streamlined and efficient, saving valuable resources that would have otherwise been used in handling these processes. This increased efficiency can also lead to decreased costs, providing further savings across the board.
Improved Customer Service
A good 3PL provider has a dedicated customer service team, which ensures orders are handled quickly and efficiently, reducing both seller’s workloads while improving customer satisfaction at the same time; customers will receive their goods soon with fewer errors or delays during fulfillment than if done by inexperienced sellers manually fulfilling orders from home or warehouses where there is no proper staff for handling such tasks efficiently leading to unhappy customers who may never purchase again from you in future!
As your business grows, so does your need for storage space, inventory control systems, and additional personnel so do all these costs increase; A good 3PL, however, allows companies not only access but affordability when it comes to scaling up operations because they already provide those services making everything seamless under one roof even when sales suddenly take off in peak seasons like holidays, etc. - instead of having to outsource temporary personnel these services can be taken care of without incurring extra costs due such flexibility offered by third-party logistics providers!
Comprehensive Tracking Services & Insights
Reasonable third-party logistic solutions usually come loaded with superior tracking technology that gives visibility into any shipments progress while giving real-time analytics regarding delivery times & performance allowing amazon sellers complete control over how they manage their supply chain operations and giving them better insights into their processes resulting in improved decision-making capabilities overall!
Criteria For Choosing A 3PL Companies’ Provider
Deciding which 3PL company to partner with is an important decision, so it is critical that the provider has a track record of reliability. The best 3PL companies will have a long history of providing excellent services and meeting customer needs. Make sure they have the appropriate processes in place to ensure that all goods are shipped on time and arrive safely at their destination.
Diversification of Logistics Services
To be successful, 3PL companies must be able to provide a variety of services - from warehousing and order fulfillment to transportation logistics and more. Look for providers who offer a full range of services, as this allows you to tap into expertise in different areas if needed.
Businesses today operate in an ever-changing environment and it’s important that your 3PL supplier is able to keep up with the latest trends. Look for a provider who has the ability to adjust their services to meet customer needs quickly and efficiently, as well as being flexible enough to adapt new technologies and processes.
Cost is always an important factor when selecting a 3PL company. Do your research on different providers and compare costs for all services offered. Make sure you are getting value for money from the provider by looking out for hidden fees or long-term contracts with high commitment levels.
Location of the 3PL partner can play an important part in your decision-making process. If a supplier is located close by, they can provide more frequent deliveries or pick-up and drop off services. This can be beneficial if you need to get your goods delivered quickly.
International Service Network
If you are looking for international logistics services, it’s important to choose a provider who has a wide network of partners around the world. This helps ensure that your orders arrive on time and without any delays due to customs clearance issues.
Different 3PL companies offer different pricing structures, so make sure you understand exactly what is included in the cost of each service. Some providers may have additional fees for certain services, while others may include everything in one flat-rate fee. Make sure you compare prices and factor this into your decision when choosing a 3PL supplier.
Sales and Customer Service
Last but not least, look for a 3PL provider who offers excellent customer service and sales support. This is especially important if you are new to the world of logistics or have questions about how their services work. Ensure they have a team of experienced personnel who can answer your queries quickly and accurately. This will help ensure that your business runs smoothly at all times.
Related: 13 Important Questions to Ask 3PL Providers
Top 5 3PLs For Amazon FBA Sellers
The five best 3PL companies for small businesses are:
A2b Fulfillment is the perfect choice for small- to medium-sized eCommerce businesses that need support with orders fulfilled through Amazon Vendor Central, Seller Central, and other eCommerce platforms. Their bi-coastal locations allow them to reach 94% of U.S. households in as little as 1-2 days via ground shipping. They offer same-day shipping services to fulfill Seller-Fulfilled Prime orders quickly and accurately.
Additionally, A2b Fulfillment offers bundling services that help you save time and money on order fulfillment. With an excellent program success and compliance track record, A2b Fulfillment is a reliable choice for meeting your fulfillment needs.
ShipBob is a tech-enabled 3PL that allows businesses to optimize their time and cost while delivering an experience that exceeds customer expectations. Their proprietary software will enable orders to be automatically sent to their warehouses, where inventory is picked, packed, and shipped out quickly. This makes it perfect for eCommerce sellers on any significant platform or marketplace, businesses selling direct-to-consumer and wholesale order fulfillment.
During peak seasons like Q4, ShipBob will not restrict storage capabilities or increase storage fees. Their on-site customer success reps at each location can help troubleshoot issues while offering affordable 2-day express shipping and integration with Amazon for a cohesive experience.
ShipMonk is the perfect choice for those looking to make shipping and fulfillment stress-free and focus on scalable growth. It integrates with your multi-channel eCommerce, FBA prep services, Seller-Fulfilled Prime, subscription box fulfillment, and retail fulfillment needs. Its features include custom packing prep and bundling services, a dedicated account manager to handle any issues you may encounter, easy-to-use software, and the ability to ship from 1 to 10,000 orders a day. Additionally, they provide lower shipping costs for SFP orders to increase profits, and there are no long-term storage fees.
Red Stag Fulfillment
Red Stag Fulfillment is ideal for fast direct-to-consumer fulfillment and small to medium-sized eCommerce businesses. Their packing and shipping services meet the requirements for Seller-Fulfilled Prime and other merchant-fulfilled listings. They offer a 30-day free trial, do not restrict storage space during the holidays or increase storage fees at busy times, have fulfillment centers on the east and west coasts of the U.S., and can deliver orders in 2 days to 97% of U.S. addresses.
Simpl fulfillment is perfect for small to medium eCommerce businesses. They take the time to understand your needs and will help you scale your business effectively. Their flat, weight-based fee per order allows you to save money. Their robust, real-time software makes managing orders and inventory easier. At the same time, their personalized 24/7 support from a dedicated success team takes the hassle out of getting information when needed. The intuitive software caters to large eCommerce brands and newcomers, so everyone is welcome! With over 50+ sales channel integrations, orders can be sent directly to their team for quick picking and packing. Speed is essential for Simpl Fulfillment!
Related: Top 3PL Companies Near Me For Fast, Efficient Shipping
Benefits Of Using A 3PL To Streamline Shipping And Logistics
Help Reduce the Cost Per Order
3PLs provide cost savings by reducing the need for in-house staff, equipment and capital investments. By outsourcing the warehousing, shipping and logistics to a third-party provider, businesses can save money on labor costs and reduce their overhead expenses. Additionally, 3PLs have greater economies of scale which allows them to leverage better pricing with carriers and pass these savings on to customers.
Lower Capital Investment
As mentioned above, 3PLs help lower capital investments since they provide an alternative to investing in physical warehouse space or buying expensive trucking companies. Companies are able to avoid costly investments such as building additional warehouses or hiring new employees when using a third-party logistic solution.
Change Fixed Costs To Variable Costs
By utilizing a 3PL, businesses can change their fixed costs to variable costs. This allows them the freedom to adjust their spending as volumes fluctuate without having to completely restructure their operations. Additionally, they don’t have to worry about additional long-term commitments or being locked into long-term contracts with carriers.
Reduce Time To Customer
A 3PL can help reduce time-to-customer by utilizing faster shipping services and streamlining the process of getting goods from origin to destination. They also optimize shipments by consolidating orders and grouping items together for cost efficiency. As a result, customers receive their products quicker and companies are able to get paid sooner.
Reduce Shipping Costs
By outsourcing fulfillment and logistics requirements to a 3PL, businesses can take advantage of reduced shipping costs. Third-party providers are able to leverage their bulk buying capabilities and negotiate better rates with carriers. As a result, customers benefit from cheaper shipping fees and companies save on transportation expenses.
Provide Scale At Peak Times
Many businesses experience seasonal demand, where there is an influx of orders during peak times such as holidays or special events. With a 3PL, companies can ensure that they have the capacity to handle increased order volumes without having to invest in additional infrastructure or personnel. This allows them to maximize their profits during peak seasons and still meet customer satisfaction expectations.
Allow Focused Management Time
Outsourcing fulfillment tasks frees up time for managers to focus on more important aspects of the business such as product development, sales and marketing. This helps businesses stay ahead of their competition by allowing them to capitalize on strategic opportunities or new markets.
3PLs For eCommerce Order Fulfillment
Companies that rely on eCommerce for their operations can benefit greatly from using a 3PL. By outsourcing fulfillment services, they are able to take advantage of automated order processing and pick/pack capabilities that would be difficult or impossible to achieve in-house. Additionally, the provider can ensure orders are packed properly and shipped quickly so customers receive their items without delay.
Tips For Negotiating Contracts With 3PL Providers
Start with a draft
Before you even begin to negotiate with a third-party logistics (3PL) provider, it's important to create a draft of your proposed contract. This document should outline the principles and specifics of what services will be provided by the 3PL, such as shipping and inventory management. It should also include payment terms, metrics for success and dispute resolution procedures. Breaking down this document into smaller sections can make it easier to manage during negotiations.
Keep Your Initial Terms Simple
To ensure that the negotiations are conducted in an efficient manner, keeping initial terms simple is essential. Avoid complex legal jargon or language that could be interpreted differently by each side. Stick to clear definitions and avoid making assumptions about any aspect of the agreement that may not be clearly spelled out.
Know Your "Why"
Before you sit down to negotiate, it's important to have a clear understanding of why the 3PL is necessary for your business and how it can benefit you over time. Knowing this will help you prioritize your key objectives as well as understand what kind of service is needed and how much it should cost.
Prioritize Your Key Objectives
As you begin negotiations with a 3PL provider, make sure that you are prioritizing the key objectives that are most important to achieving success in the partnership. This could include costs, timelines, accuracy or customer service among other things. Consider which areas are non-negotiable and which ones might be able to be compromised on during negotiations.
Ask Questions and Understand Your Counterparty's Motives
During negotiations, it's important to understand your counter-party's motives in order to take advantage of any possible opportunities for a mutually beneficial agreement. Ask questions about what the 3PL provider is offering and why, as well as how they plan to meet their commitments.
Come Prepared With Research
Knowing the market rate for services from 3PL providers is key when negotiating a contract. Make sure that you come prepared with research into industry averages so that you can be confident in your offers and adjust them accordingly based on feedback from the other side. This will give you an edge during negotiations and help ensure that you are getting the best deal possible.
Should Amazon sellers consider partnering with a 3PL to help support their efforts? Absolutely! With the competition among Amazon sellers on the rise and customer expectations higher than ever, it’s essential to ensure that your business can turn orders around quickly and maintain high levels of customer satisfaction. A 3PL provider can not only simplify the complexity of shipping products and providing customer service but also provide unparalleled access to a more extensive network of transport providers for optimized cost savings and impeccable levels of quality assurance. Simpl stands ready to answer any questions you might have about third-party logistics solutions fit for your needs. Get in touch today and see how we can revolutionize your Amazon eCommerce success!
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