A recent survey found that 39% of consumers won’t give retailers a second chance after a poor delivery experience. Delivery delays and poor communication can make or break consumer loyalty.
In the highly competitive ecommerce marketplace, there’s no room for error. Retailers and e-commerce sellers face an ongoing battle in their supply chains, such as order processing delays, inventory management issues and shipping bottlenecks.
A third-party logistics provider (3PL) with deep experience in retail and eCommerce fulfillment can help streamline these processes, improve efficiency and ultimately enhance customer satisfaction and retention.
4 Areas Where 3PLs Can Help Relieve Fulfillment Bottlenecks
A specialized 3PL leverages its expertise in warehouse inventory management, picking and packing, shipping functions and more to help customers overcome eCommerce bottlenecks and meet customer expectations for ever-faster delivery times and order accuracy. Here are some of the ways a 3PL can help:
Improved Order Processing
Problems with outbound order processing often begin when the products are received and put away in the distribution center. Perhaps the order is incomplete or incorrect – a case of socks is only three-fourths full, or the color assortment or size doesn’t match the shipping notice. If those discrepancies get missed during receiving, all future inventory and order processing will be wrong for these products.
Through improved order processing and management, Essendant helped one eCommerce vendor grow its business 10 times over. At the same time, the company used Essendant’s nationwide network to ship orders faster without paying premium rates.
Better Inventory Management
Like order processing, effective inventory management rests on accurate receiving. If the inbound products don’t match the documentation, the product could get put away in a location that doesn’t match its sales velocity. When this happens, slots get overstuffed or empty too quickly, and accurate picking for those orders becomes challenging. The picker might have to take time to manually search for the right SKUs or pack an incorrect order.
Inaccurate inventory can cost a company $10 to $250 per item, depending on the product. To avoid those costs, rely on a 3PL with the processes and technology to store, manage, track and report for clear visibility into inventory levels. Your 3PL should support the entire product management lifecycle, from new product launch to end of life.
For example, a growing consumer goods company needed a 3PL partner to support its expansion into direct-to-consumer sales while also serving its retail partners. Essendant helped them add nearly 100 new products and ship via the most cost-effective mode, taking advantage of the nationwide footprint to store product closer to the consumer.
Fewer Shipping Slowdowns
Labor shortages, manual processes, and inefficient storage and packing methods can lengthen shipping lead times. However, a 3PL can overcome many of the challenges of managing fulfillment in-house, such as:
- A logistics provider takes on the challenges associated with staffing, which alleviates slowdowns from labor shortages and relieves strain on a company’s internal human resources department.
- Ensuring your tech stack keeps up with the latest developments, including warehouse automation, can have a hefty price tag. A 3PL invests for all its clients, who benefit without footing the entire bill themselves.
- Real estate. A national footprint lets retailers place inventory closer to important customer markets, allowing cost-effective, fast delivery options. The 3PL can also shift inventory among locations in response to changing market demands.
- Your 3PL will use the optimal service – whether that means full truckload (FTL), less-than-truckload (LTL), parcel, courier or something else – to serve your customers cost-efficiently. Look for a 3PL that can blind ship as an extension of your supply chain to residential and commercial customers, which can help mitigate costs associated with inventory and shipping.
Optimized Returns Management
Some large ecommerce sellers charge for returns, and it’s easy to see why. Online returns cost an average of 21% of the order value, and consumers place a high value on flexible return policies.
Your returns supply chain should be at least as sophisticated as the outbound fulfillment side. Shipments must be tracked, and refunds must be issued as soon as possible. Timely disposition of the assets can reduce the financial impact of returns, whether items return to inventory, get sold to third parties, or get recycled or otherwise disposed of.
A 3PL experienced in managing returns can set up systems to prioritize items by value or other criteria to optimize the disposition process.
When you need a world-class fulfillment operation, talk to the experts at Essendant to design a streamlined fulfillment solution that improves customer service and saves time so you can focus on building your business.