4 min read

Ecommerce retail sales have continued to rise since the pandemic accelerated the uptake of online shopping. That shift — amounting to a decade of growth within just a few months — means many established brands ramped up e-commerce shipping from distribution facilities that weren’t built to support it.

Bolting on e-commerce fulfillment in facilities designed for B2B truckload and LTL services made sense at the time. However, brands that adapted pallet or case-level operations for direct-to-consumer (DTC) shipping through a dedicated e-commerce channel now may not be able to keep pace with consumers’ service expectations.

That’s where a third-party logistics provider (3PL) can help. Here are three benefits of working with a 3PL to help your brand achieve its DTC goals.

Prioritizes DTC fulfillment

A distribution network built around pallets and truckloads may not have the infrastructure and technology to manage high volumes of small unit fulfillment. Picking, packing and shipping at the eaches level requires the systems to track product location in the warehouse and manage inventory at a granular level. A fulfillment-oriented 3PL will have the infrastructure and systems to manage thousands of SKUs shipping to B2B and B2C consumers.

That’s a boon for brands looking to meet consumers’ ultrafast delivery expectations economically. A 3PL with a network of locations can offer distributed inventory stocking instead of fulfilling from the company’s distribution centers. With products stocked closer to buyers, shippers can offer tight delivery windows with better parcel rates. It’s also more cost-effective to compete with one-to-two-day delivery expectations when there are fewer zones to traverse. The 3PL can negotiate better parcel rates due to its consolidated volumes, further enhancing margins on each sale.

Lets you focus on your core competencies

Your company must consider where to invest resources to build a DTC business. Leveraging existing operations may require significant investments in technology, infrastructure and staffing. Gathering and managing those resources requires management and organizational focus that diverts attention from your company’s core business.

Rather than building an e-commerce fulfillment business, outsourcing DTC fulfillment to a 3PL allows an organization to do what it does best while not having to worry about the details of a carrier’s next-day shipping rates.

Organizations that have developed robust operations for B2B fulfillment may prefer to keep that segment in-house to serve wholesale customers. The DTC e-commerce segment, meanwhile, can be positioned for success by partnering with a 3PL that can rapidly scale to manage small unit fulfillment operations — without the need for capital investment. Labor and infrastructure expenses are part of the 3PL’s fulfillment as a service business model, reducing the risks associated with developing new sales channels.

Enables scalability

One key benefit of working with a 3PL is scalability. A 3PL has built the distribution locations and technology needed to manage fulfillment. Your organization can tap into those capabilities as needed, and avoid having to pay for them when they are not needed.

A 3PL with a broad network footprint can match growth in volumes and market geographies. Is business from your West Coast customers increasing? A 3PL can serve those buyers from local warehouses to lower shipping costs. Are new products selling quickly, and you need capacity to meet demand? A 3PL can carve out space to meet your needs.

A fulfillment-focused 3PL offers the flexibility to scale up for peak seasons – including, but not limited to, the year-end holidays. Some peaks come with the start of the construction or agricultural seasons. Summer travel and back-to-school can also cause business to spike. A 3PL can expand its services to meet those short-term demands and scale down as the season passes. There are no long-term expenses for additional space or labor.

As your product mix changes, a 3PL can adjust to stock and fulfill new items to support your marketing strategies.

If your organization is looking for a way to capitalize on DTC demand profitably, look for a 3PL partner with experience, a nationwide network and technology to support your long-term success.