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on January 19, 2022 by Jenna Frey in Fulfillment

How a 3PL Can Lower Your Overhead and Raise Profits

Illustration loading dock and trucks

How smart, scalable, and resilient is your enterprise supply chain? In both boom times and downturns, your brand’s viability depends on the strength and stability of an effective and efficient supply chain.

But for many brands, the increasing complexities and demands of supply chain management fall far outside their wheelhouse. In addition, the myriad costs of managing fulfillment and logistics in-house can outweigh what benefits they might derive. An experienced third-party logistics (3PL) provider can help manage part of or your entire supply chain, from warehousing to fulfillment and returns. Read on to learn how the right 3PL can remove complexity while increasing your sales and improving your customer experience.

What’s a 3PL? Third-party logistics (3PL) is the use of another business(es) to store, pack and transport one’s commercial goods to and from customers.

When Do You Need a 3PL?

With the right partner, the benefits to your business will increase over time. A 3PL doesn’t necessarily solve every business’s problems, nor should it. Only you know when and if you need a partner to step in to minimize the pains of growing demand for your goods and services. Whitebox advises ecommerce businesses to fulfill on their own until doing so becomes a distraction and drain on other parts of your business. Assess the point at which in-house fulfillment requires more time and money than profit allows. Your 3PL provider should eliminate complexity, help your business grow and free you up to focus on what you do best. 

A 3PL’s Greatest Strengths: Warehousing, Fulfillment, Returns

Creating great products is what put you on the map. As demand for those goods increases, so too do your overhead costs, that is, those recurring business expenses outside of producing your products. Keeping overhead low helps boost the bottom line and increase profits when your business is thriving and even when it’s not. A 3PL can and should contribute both to increased sales and reduced costs no matter what stage your company is at. Tap into their expertise in these three main areas to realize not only cost savings and operational efficiencies but greater customer satisfaction.  

Keeping overhead low helps boost the bottom line and increase profits when your business is thriving and even when it’s not.

Warehousing

Inventory management is costly and complicated for brands to manage on their own. From warehousing facilities to labor to the technology required to streamline communication and operations, brands benefit enormously from the expertise of a 3PL. Outsourcing this critical piece of the enterprise supply chain lowers the risk of costly mistakes while maximizing returns. The right 3PL can scale when and if you need without tapping into your resources. Want to enter a new market? A 3PL can help. Want to get closer to your customers? Strategically located warehousing storage facilities simplify getting your products from factory floor to front door.

Most importantly, smart inventory management boosts sales. How? Your 3PL inventory management strategy can help you stay in stock and adjust to customer trends. Data is the key to both. With a data-driven 3PL like Whitebox, you’ll know not only where your products are today but if you have too much product, too little or just enough for future demand. As we’ve all learned over the last few years, out of stock has lasting consequences. Loss of sales, loyalty and SEO rankings are just a few of the damaging effects. But with real-time insights and reporting into current inventory and sales trend data, a 3PL can help you remain just flush enough to minimize costs and maximize sales. 3pL Warehouse Storeage Illustration

Fulfillment 

A 3PL can open doors for a brand in ways you can’t do alone. Access to more carriers, greater influence in negotiations and volume discounts are some of the many advantages a 3PL brings to the table. In addition, a 3PL like Whitebox can pool inventory across multiple channels, effortlessly moving goods where they need to be while saving money. As a carrier agnostic provider, we can easily shift to the best shipping option for every order to get your goods closer to customers faster while saving money. This flexibility, in turn, leads to higher customer satisfaction. 

Fulfillment is about what you’re selling, to whom and where. Most brands focus myopically on “staying in stock” but fulfillment is more than meets the untrained eye. The data you can mine from fulfillment can and should drive operational efficiencies across your business, not just the back of house. From shipping insights to demand forecasting, expiration date tracking to product promotion, fulfillment data can unlock new areas of opportunity and growth. When vetting 3PLs and holistic solutions like Whitebox, be sure to dig into the provider’s sophistication and transparency around fulfillment data. 

Most brands focus myopically on “staying in stock” but fulfillment is more than meets the untrained eye.

Returns Management

“Sell it and forget it” doesn’t work in ecommerce. Nurturing loyal, repeat customers is just as important as acquiring new buyers. Return rates for ecommerce (20%) are double those of brick and mortar (9%). Moreover, returns eat into profits, disrupt processes and chip away at conversion rates. Returns management, otherwise known as reverse logistics, requires as much expertise, insight and customer service as getting products into buyers’ hands. An experienced 3PL can alleviate the burden of returns management while leaving a positive impression on customers. In fact, 92% of customers would buy again if the returns process goes smoothly. 92% Of Customers Would Buy Again image

What’s the root cause of your returns? Although seasonality can play a large part in returns, a high number of returns can indicate a bigger problem. A modern commerce 3PL like Whitebox uses reporting tools to pinpoint when returns of a specific product spike and why. Our holistic expertise on the marketplace and fulfillment side is an enormous benefit to brands in this regard. Are your product photos misleading customers? Can we tweak a product description to help manage expectations and more accurately reflect your product’s strengths? What return reasons are tracking highest? No matter the reason, if the product is returned in good condition, with Whitebox full-service logistics, it can rejoin existing stock, minimizing further loss to the brand. 

Ecommerce Fulfillment and Marketing in One Powerful Solution

A 3PL can transform your ecommerce business in myriad ways. Whitebox goes even further for its clients. Our modern commerce technology approach delivers a high-volume, low-defect network so brands can reach their customers where they shop. 28% Reduction in Fulfillment Costs and 508% Increase in SalesData-driven to the core, we deliver holistic omnichannel insights and expertise on the marketplace and fulfillment sides of the business. Transparency into the big picture of your business translates into greater opportunities to drive sales and realize savings. For Super Coffee, they saw a 28% reduction in fulfillment costs and a 508% increase in sales. Contact us to help lower your overhead and raise profits today.

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