Third-party logistics, often known as 3PL, is a system in which a company or a third party provides inventory management and delivery services to other organizations. In this case, the client who needs inventory management and delivery usually hires a third-party logistics or 3PL firm. In exchange, the third-party logistics company conducts some or all of the client's logistics-related duties.
Here are some of the primary tasks they complete:
Outsourcing logistics to a 3PL organization is a good idea because it provides you with the following benefits.
You can easily broaden your reach because it is focused on multiple regions, as 3PLs may have multiple fulfillment centers. Hence lowering shipping costs.
Any e-commerce platform, store, or industry can benefit from 3PL logistics services if they exhibit the following characteristics:
If you want to offer free two-day shipping like Amazon, you'll have to outsource fulfillment to 3PL logistics.
Having a 3PL partner simplifies your business and saves you time, energy, and money. However, you must select them using the following criteria:
Once you've identified your 3PL partner, you must scrutinize each key performance indicator, such as
A retail store converted as a micro fulfillment center and optimized to meet the expectations of retail demand online is called a Cloud store. These facilities are not open for shoppers thus they accommodate more inventory stocks and meet the customer demand received online.
The major benefits of the Cloud store for e-commerce are:
The COVID pandemic has taught everyone to be prepared ahead of time, especially retailers, who are being forced to provide online ordering and contactless delivery options. The Cloud store comes in handy here, whether it's to manage a large inventory or to provide contactless delivery and pick-up options.
Additionally, also in improving order accuracy and speeding up the process of meeting the needs of the customer, it serves as a means of attracting customers by providing various delivery options.
The Cloud store is only sustainable as a strategic and profitable option for retailers if it provides the following pickup and delivery facilities.
Note: If you don't have the resources to build a Cloud warehouse, you can always work with a third-party logistics company to meet your shipment needs.
Freight forwarder: Works with multiple carriers, such as air, rail, and highway, to transport goods from one location to another. They are primarily in charge of managing relationships and important tasks in the shipping process, such as negotiating freight changes and preparing shipping documents. They do not transport freight as such.
3PL: A 3PL manages the entire supply chain, including picking up, warehouse storage, and shipping.
Many norms have emerged as a result of the COVID pandemic, such as social distancing, contact-less delivery, and so on. Retailers find it easier to leverage the gap between customer fulfillment and quick deliveries with this concept of Cloud warehousing because it provides the benefit of customers not entering the crowded store.
Some of the reasons why retailers are converting physical retail space into Cloud houses are as follows:
At the same time, they make it easy for local customers to pick up or have them delivered on the same day. As a result, this will undoubtedly be growing strong in the long run.
The major differences between quick-commerce and e-commerce can be bifurcated on the following grounds:
Delivery time- The delivery time of orders is faster with quick commerce as compared to e-commerce.
Stock availability- E-commerce has a wide variety of products whereas quick-commerce deals in a small selection of products.
Transportation- The process of delivery takes place through Delivery trucks, four-wheelers etc while with quick commerce the delivery happens mainly with a two-wheel vehicle
Warehouse type- In e-commerce the stock are stored in a central warehouse whereas in quick-commerce the goods are stored in a physical store or small local warehouse.
Quick commerce is more likely to entail impulse purchases, resulting in lesser volume in terms of both product quantity and order price. E-commerce, on the other hand, is more planned due to the lengthier shipping durations. As a result, the average expenditure per purchase is higher, and the purchases are more diverse.