A third party fulfillment provider – 3PF for short – is an outsourced supplier that provides your online business with specific logistics services such as warehousing, order processing, packing, and shipping.

Why outsource to a 3PF?

Most online businesses start with limited budgets and sweat equity. Their reliance is solely on their personal resources to get the orders out the door. However, as the business grows, along with the number of orders to be shipped, it becomes increasingly important to outsource this activity, because sales and marketing efforts start to become a higher priority.

That’s exactly where a 3PF steps in; to help you with logistics and to help you increase your bottom line. They do the order processing and shipping, while you concentrate more on critical activities that help your business grow.

Since it’s the principle job of 3PFs to process orders daily, they are the true experts in the matter. What’s more, they’ll ensure that your products get delivered to the right person at the right time. Now isn’t that a heavy load off your mind?

Benefits of Outsourcing to 3PFs

A 3PF can benefit your business in a variety of ways, including:

·            Lower Overhead Costs – Reduction in long-term expenses including salaries, employee benefits, payroll expenses, insurance, transportation, and warehouse rental/maintenance costs.

·            Decreased Shipping Rates – Availability of more competitive and negotiated shipping rates from shipping carriers because of the 3PF’s aggregate volume. This is significant since shipping costs can erode a substantial portion of your profits.

·            Fulfillment Expertise – Since order processing and fulfillment is their main line of business, they can incorporate industry best practices at all levels of the fulfillment process.

·            Less Stress – 3PFs accept the responsibility of a fluctuation of staffing needs and warehouse space as your business ebbs and flows.

·            Professional Products – Many 3PFs have an experienced on-site IT staff who develop and maintain order processing and shopping cart functionality every day.

·            Customer Service – Most 3PFs have their own on-site call center, which your customers can call to ask any range of questions they might have.

·            Redistribution of Resources – A 3PF would allow you to bypass infrastructure development expenses. Instead these funds may be used for brand building, online marketing, and other means to help your business grow. You focus on your core competency and let the 3PF focus on theirs.

Selecting Your 3PF

Take an objective look at your overall operations, especially your business downtime, and ask the prospective 3PF the following questions:

·         Can their warehouse communicate seamlessly with your software?

·         Are they capable of syncing up with an FTP and can handle Fulfillment by Amazon (FBA) preparations?

·         Is there a contract minimum?

·         What are the services and technologies they have that would benefit your business?

·         Do they offer same day shipping to your customers?

·         What is the average tenure of their clients?

·         Do they have an experienced Account Management team and will you be assigned a single-point-of-contact within their company to manage your business?

·         What is the amount of warehouse space they can currently offer and what will be available in the future as your business grows…can they grow with you?

It always pays to go through reliable referrals and to check out if the prospective 3PF’s billing is per item or hour for picking and packing. Ask them about available discounts, their procedure for handling returns, error rates in fulfilling orders on time, and their acumen pertaining to order accuracy. Lastly, a central location is key. Fulfillment warehouses located in the Midwest, can reach 77% of the continental US within 48 hours. This is critical in today’s fast-paced world.

If the logistics of your business are keeping you up at night, a 3PF might be your remedy for a good night’s sleep.