With e-commerce sales on the rise and showing no signs of slowing down anytime soon, online shopping giants such as Amazon are revolutionizing the retail marketplace. More and more consumers are finding the convenience of online shopping preferable to spending half of the day driving around to retail outlets. Fast delivery, expedited shipping, and free or low-cost shipping options also drive sales for e-commerce stores, particularly for consumers in search of deals, discounted goods, and niche items. Some big-box retailers, such as Home Depot, Lowe’s Home Improvement and Walmart are turning to e-commerce to promote “online only” specials that can be shipped directly to customers or picked up at retail locations.
Global exposure and Amazon expectations changing fulfillment landscape
Technological advances allow businesses to reach potential customers all over the world, increasing sales and brand exposure via e-commerce sites. Today, led by Amazon’s impressive business model, online shoppers have come to expect quality products and reliable, fast delivery. Online shoppers also enjoy the convenience of next day delivery, as well as free shipping and other shipping options.
Demands of online shopping encourage third-party logistics for fulfillment
In order to step up packaging and shipping products for increased on-time deliveries, many e-commerce stores are finding third-party logistics fulfillment centers an essential element in automating their supply chain processes and inventory management operations. With supply chain mode shifting into high gear, along with a more complex network of shipping options to navigate, many businesses are seeing more efficient results in outsourcing their third-party logistics.
Companies also benefit from partnering with a fulfillment center in a myriad of other ways:
- Outsourcing your fulfillment allows you to focus on growing your brand.
- Low overhead costs for warehousing eliminates leasing and labor overheads.
- Shipping expertise and shipping volume equal low shipping costs.
- Enhanced buyer experience increases brand loyalty.
Third-party logistics providers in the US is a growing industry
- According to Statista, in 2000, the US third-party logistics, or 3PL industry, generated a gross revenue of $52.6 billion.
- The 3PL industry has been growing at rates ranging from 5-13% increments annually, except in 2009, during the recession, when the gross revenue dropped 10 percentage points.
- In 2016, third-party logistics providers in the United States generated $166.8 billion in revenue.
Choosing the right fulfillment company for your online business
When choosing the fulfillment company that works the best for your online company, here are a few things to consider:
Services and obligations
Make sure the services offered by a fulfillment center meet your needs. You want to work with a company that takes your particular business needs into consideration, including flexibility and scalability to coincide with your busy and not-so-busy sales cycles. Be aware of added fees for minimums and understand those fees can raise your cost for outsourcing.
Location and distribution
Choosing a fulfillment center that’s strategically located near major trucking routes, international ports of call and international airports improves the speed of your orders, increasing sales.
Technology and shopping cart integration
Dedicated fulfillment and inventory software should integrate with your online shopping cart and coordinate your various multi-channel outlets. Directly routing to your fulfillment company’s interface automates your ordering process. Your product sourcing and inventory management software should be user-friendly, transparent and instantly updated, so companies and customers are kept in the transit loop from shipping to delivery.
Customer service and consistency
A readily available, resourceful and knowledgeable customer service presence is a must have to build long-term relationships with your brand’s base. Choose a company with live reps you can reach by phone, 24/7 as well as email and live chat.
GapGemini Consulting’s 2017 publication, The 21st Annual Third-Party Logistics Study, in conjunction with Penske and Penn State, noted a continuing trend towards shippers and their third-party logistics providers moving away from “primarily transactional relationships, toward meaningful partnerships.”
Phase V Fulfillment Company partners with you to streamline your supply chain processes and move your company towards its next expansion. We take the time to find out how your company works and what your goals are in order to customize your fulfillment and inventory management operations. Constantly working to save you time and money, your Phase V logistics team is on the lookout for more expedient and cost-efficient ways to get your products into your customers’ hands. From onboarding to product delivery, Phase V’s technology features full transparency in order processing and inventory management.
Conveniently located in Ft. Myers, Florida we connect to all North American and Latin American markets with coast to coast distribution. International businesses, looking to expand into the US market benefit from shipping from a central US location, with experienced packaging personnel and a shipping department that knows US rates and regulations. With nearly forty years of experience, Phase V has the expertise to help your company grow into its next expansion.