Blog Posts 3PLs: A Valuable Alternative to Amazon Fulfillment
- Amazon offers incredible potential for its third-party sellers, but fulfilling Marketplace orders can be challenging.
- A third-party logistics provider (3PL) can make it easier to utilize a Merchant-Fulfilled Network.
- Outsourcing can help sellers to retain control of their supply chain and better manage costs while ensuring efficient deliveries and excellent service.
Forty-one cents of every online dollar in the U.S. is spent on Amazon. Much of that spending takes place on Amazon Marketplace. Its third-party sellers generated $300 billion in sales in 2020.
The lure of selling products on Amazon is understandable; however, it is often more complicated than expected. For many sellers, order fulfillment is particularly challenging.
Using Fulfillment by Amazon to store, pack and ship products can be costly. Fees for shipping, handling, order processing, and inventory storage can quickly erode narrow profit margins, especially for sellers with lower-priced, slower-moving, heavy or bulky items. Damage, loss and other warehouse issues also pose concerns.
To avoid these pitfalls, many sellers opt to use a Merchant-Fulfilled Network to handle Amazon Marketplace orders but look to a trusted third-party logistics provider (3PL) for fulfillment and distribution. This arrangement allows them to retain control of their supply chain and better manage costs while ensuring efficient deliveries and excellent service.
Why Outsource Order Fulfillment?
Wondering if it makes sense to use a 3PL to fulfill your Marketplace orders? Consider the following advantages:
Leveraging a 3PL’s sophisticated order management system (OMS) can help to improve visibility, optimize inventory across multiple fulfillment sources, efficiently manage backorders as well as returns and exchanges, and more.
Automated fulfillment solutions such as pick-to-light, automated label application/manifesting, and wearable RF technology help to improve order turnaround and delivery times.
Chances are, selling on Amazon Marketplace will increase your order volume. Flexible space, staffing and technology are critical. A 3PL has the resources you need to accommodate business growth, seasonal fluctuations, etc. – whether you have 1,000 orders a month or 1,000,000.
Fast, cost-effective shipping
3PLs can help you to meet consumer expectations for speedy service while controlling costs. With a network of strategic DC locations, they’re able deliver to 90% of the U.S. in two days via ground service, reducing the need for more costly expedited service.
In addition, their negotiated rates with parcel and freight providers can minimize your shipping costs and ensure your products get to your customers quickly.
Maintain brand integrity
You’ve worked hard to build your brand. You don’t want to sacrifice quality, service, or reliability in the fulfillment and distribution process. A trustworthy provider will treat your products like their own and have quality controls and continuous improvement processes in place to protect your brand.
With their concentrated focus on fulfillment and distribution, 3PLs are well positioned to give Marketplace sellers the speed, service and scalability they need to deliver a positive customer experience.
If you want more control over the fulfillment process, enlisting a 3PL to support your Merchant-Fulfilled Network may be the right option for your business. Read our ebook to learn more.
Related to: Selling on Amazon, Selling Online