Are you looking to expand your third-party logistics (3PL) operation to handle increased online order volumes? That comes as no surprise. Order volume through 3PL Warehouse Manager has risen by 59% year over year.
However, with more volume comes more responsibility. Warehouses that don’t have efficient processes for fulfilling orders risk causing costly mistakes, overwhelming staff, decreasing staff productivity levels, and even limiting revenue growth!
Having the right warehouse management system (WMS) software is imperative to the success of your third-party logistics warehouse operation. With it, you can enjoy increased efficacy, better organization, and higher revenue.
This guide will explore everything you need to know about ecommerce fulfillment for 3PLs, including the best third-party fulfillment software to help you grow your business!
What is WMS?
WMS refers to a warehouse management system. This consists of the different processes and software that allows third-party logistics warehouses to administer and control warehouse operations, from the time the materials or goods enter a warehouse until they move out and everything in between.
Warehouses are the powerhouse and center of supply chain operations and manufacturing. They hold the material used or produced from these various processes, from raw materials to the finished products ready to go out to consumers.
The purpose of a WMS is to make sure that these materials and goods move through the warehouses to consumers in the most cost effective, efficient, and safe way. A warehouse management system software handles most or all of the functions that allow for these processes to occur, including:
- Inventory management
- Inventory tracking
- Reverse fulfillment (returns)
Warehouse management system software is an integral part of supply chain management. Remember, the supply chain is only as accurate, efficient, and fast as warehouse processes allow. A good WMS makes sure that processes work smoothly by tracking inventory and ensuring that goods are sorted and stored properly, as well as shipped and tracked accurately.
What Are the Benefits of Using 3PL Software?
There are a ton of benefits of using 3PL software. As you know, the success of your third-party logistics organization really depends on consumer satisfaction. Consumers today want their orders filled accurately and quickly, to be able to track orders throughout the course of the fulfillment and shipping process, and to know what to expect when it comes to their orders. For small businesses, this can be handled in-house, but many ecommerce operations rely on you, the 3PL warehouse, to handle fulfillment issues.
Your success depends on your fulfillment processes, and these can be enhanced by warehouse management system software.
Here are some of the benefits associated with using 3PL software:
Reduced costs for the 3PL and Their Clients
Reducing overhead costs is imperative to having a successful ecommerce fulfillment business. Streamlining the process means that you’ll see reduced costs, which can then be passed on to your customers.
This means both you and the customer will enjoy:
- Faster order fulfillment
- Lower shipping costs
- Improved consumer satisfaction
Streamlining processes results in reduced costs for 3PL providers, which can be passed on to their clients in the form of lower shipping costs, faster order fulfillment, and improved consumer satisfaction.
Lower risk for error
Reducing error must be the goal for any 3PL company.
The average cost of fulfillment errors for 3PL organizations is between $35-$50. As if that isn't costly enough, there are other indirect but very costly consequences as well, including negative relationships with your customers, bad reviews, and loss of business.
When the order fulfillment process is handled manually, there is an increased chance of error at each stage and from one stage to the next.
With 3PL software, all the data is stored, integrated, and shared for increased accuracy and speed. This means stronger and more accurate processes both for the 3PL and the businesses that they serve.
Process Customization and Scalability
Third-party logistics software is highly customizable, making it perfect for your 3PL business. You want to be able to customize features to make your software work for you. It should be able to do everything you need it to, helping you to manage every aspect of your 3PL organization.
Additionally, the software should allow for scalability in your process. 3PL software should be able to scale to meet the needs of their customers. You should be able to make changes and transitions if you enter a new market, open a new fulfillment center, or add inventory.
Having a 3PL software should allow you to grow- without the growing pains.
Increased Data and Insight in Your Business
Data is so important for making your 3PL business successful.
When you integrate all the supply chain activities, including payments, tracking shipments, and returns, you can get a better understanding of your business. You’ll be able to make data-informed decisions for your business based on:
- Tracking your inventory
- Generating reports any time you want them
- Running performance reviews
- Analyzing errors
- Taking a deep look at every process from raw materials to sending final products to consumers, and anything in between, depending on the nature of your 3PL
Doing this can help you increase efficiency, save money, and increase revenue by making more informed decisions in real time based on real data!
A Higher Level of Customer Service
What do consumers today really want?
Increased accuracy about when their package will arrive, where their package is now, and any changes that might occur during the fulfillment process. Consumers want this information from the ecommerce store or brand, who in turn wants it from their 3PL provider.
When customers hand over all of their supply chain activities to a 3PL, they want to know what is going on, and you want them to know that they can trust you.
3PL software means that you can track performance, sales and inventory, as well as provide that info to your customers in real time. This makes for increased transparency and communication, which are all pillars of an excellent customer service experience.
Increased Efficacy with Automation
By automating different aspects of fulfillment and the supply chain process, 3PL software can save both 3PLs and their customers a ton of time! Payments and orders are able to be tracked automatically. Reports and invoices can be generated from one single database instead of confusing and time-consuming separate spreadsheets.
Integrating with ecommerce platforms such as Amazon, Shopify, and more, can help improve automation. Using the right warehouse management system software means that 3PLs can offer support for ecommerce fulfillment and retail businesses.
Workflows to Expedite Ecommerce Fulfillment
As discussed, one of the major benefits of implementing a 3PL software is increased efficiency with automation. There is nothing more important than time in ecommerce order fulfillment. It’s integral to the entire process.
Consumers expect to receive their orders seamlessly and quickly. Otherwise, they’ll be dissatisfied with the delivery experience. This means that your customer will be disappointed with your 3PL business. All around bad news for everyone.
To speed up delivery and optimize order fulfillment, you have to look at every angle of the supply chain, starting from the very beginning.
Some of the biggest time killers of the supply chain process are manual tasks that occur right at the order processing stage. These can add hours or days into your delivery timeframes. Furthermore, when done manually, this stage can be rife with errors. This can be a costly mistake for 3PLs that can cause them to lose trust of their customers, business, and money.
The best way to remove inaccuracy and inefficiencies that cost time and money during the fulfillment process is to automate it.
3PL Central has worked with thousands of third-party logistics warehouses. By doing so, we’ve been able to pinpoint key best practice workflows that you can use with WMS software to fuel your ecommerce growth and expedite ecommerce fulfillment.
What is Automated Ecommerce Fulfillment?
Automated ecommerce fulfillment refers to the streamlined workflows that remove repetitive, time-consuming tasks from needing direct human management. Automated fulfillment includes both hardware and software solutions.
Automated ecommerce fulfillment allows third-party logistics companies to use the staff they have for more complex tasks while passing off the repetitive tasks to the WMS.
There are several benefits to this. It saves time and labor, thus creating significant cost savings, which can also be passed on to your customers. Furthermore, you’ll be better prepared to handle influx and peaks in demand. By increasing efficiency and having better workflows, you can handle more businesses, allowing you to scale and grow your 3PL business.
Efficient Receipt Against Advanced Ship Notice (ASN) Process
Many 3PL businesses receive an advanced shipping notice to make sure that they have received the correct inventory and to ensure that the products they have received are high quality. This helps to reduce errors in the picking and packing process, as well as avoid shipping the wrong product, which can be a costly mistake.
There are several benefits to automating this process:
- It speeds up both dispatch and delivery by making sure that everyone involved has accurate information about items coming and going
- Stock levels in fulfillment centers and warehouses can be reduced with cross docking or direct shipping
- Payment times are reduced, as ASNs eliminate a requirement for separate invoicing
Efficient receipt against advanced shipping notices means you strengthen your quality control process, thus allowing your 3PL business to build a reputation for efficient quality inventory management and receipt. It also makes a strong process that makes it difficult for others to replicate, thus helping you gain reputation and marketshare.
You can build your business by automating this process through WMS software that includes efficient receipt against advanced shipping notices.
Transform Your Processes by Leveraging Mobile Barcode Scanning
Two significant challenges that 3PLs face when scaling their ecommerce businesses are pick speed and order accuracy.
Mobile scanning doesn’t just help your processes flow more efficiently. This technology can also be used to capture shortages, overages, and damages that happen. By using a mobile scanner, you can detect these issues early on by having total visibility of your operations. You can quickly and accurately track inventory through every step of the process as they move from receiving all the way to picking, packaging, and shipping.
Automate the Order Creation Process
To be able to scale your warehouse, it’s important to automate the order creation process as much as possible. Warehouses should use integrations, which we will discuss later in better detail, with third-party marketplaces and shopping carts. This helps automate the order creation process.
Consider the real cost of inefficient order processes. This creates hundreds of hours per month, taking up valuable staff time on processing orders via manual and time-consuming methods such as phone calls, email, and even paper orders. This means that there is a huge opportunity cost since staff are investing their time responding to customers instead of picking and packing orders. This is a huge hurdle to scaling order volumes and growing your 3PL business.
When you automate your order creation process by connecting it to shopping cart platforms such as Shopify, the customer can simply place the order and then view the tracking number online. This means your staff won’t have to field emails and phone calls related to processing the order.
You can automate your order management and free up your staff’s time by choosing a WMS like 3PL Warehouse Manager with the right ecommerce integrations, allowing you to scale your business while pleasing your customers. Win-win!
How These Automation Processes Help Your Business
When you apply these warehouse automation workflows to your 3PL ecommerce fulfillment, you can reach higher levels of consumer satisfaction. This can create incredible growth, as happy consumers fuel businesses.
A major part of warehouse growth is having the right WMS to apply these scalable processes. The right WMS will be able to handle warehouse automation capabilities to help you grow exponentially. The warehouse management system software should also have ample ecommerce integrations, allowing you to do more and automate your business more fully.
To see how you can use our WMS, 3PL Warehouse Manager, for these automated processes, visit us here. Our highly rated and well trusted software can help you ensure that every process of the online shopping experience goes smoothly. These more productive ecommerce fulfillment processes allow for faster shipping, reduced costs, and an enhanced customer experience.
Must-Have Integrations for 3PLs to Improve Ecommerce Fulfillment
The rise of ecommerce means potential growth for 3PLs serious about improving their ecommerce fulfillment. The ability to keep 3PL customers satisfied lies primarily on the 3PL's warehouse management system software. The best third-party fulfillment software is the backbone of the entire 3PL organization, all in one place.
Unconnected 3PLs face a ton of issues, including:
- Reduced productivity
- Staff responsibility for repetitive tasks
- Increased human error, leading to higher costs
- Inventory mistakes
- Unsatisfied customers and reduced business
- Lack of opportunity to scale since time is spent on menial tasks
The good news is that with the right WMS integrations, you can do everything in one place, reduce the time staff has to work on repetitive tasks, and free them up for more challenging tasks to grow your business! With a strong cloud WMS solution and well-chosen integrations, you can run your business seamlessly from start to finish.
We’ll break down the best integrations to use with your cloud WMS, such as 3PL Warehouse Manager, the most trusted in third-party logistics software.
1. Shopping Carts
Online sales fuel ecommerce. Customers of 3PL warehouses need the expertise and experience of their 3PL to integrate with leading shopping carts. This helps your customers grow their business, which in turn helps you grow yours!
A well-connected cloud WMS can integrate with the most popular shopping carts. This means 3PLs can automatically receive orders, eliminating the costly, timely, and error-prone method of manual order entry.
These integrations can help you avoid manual entry errors and stock outs. You can also use your WMS to create custom integrations even with lesser known shopping carts, making it perfect for all kinds of ecommerce fulfillment and growth.
2. Picking, Packing and Shipping
Picking, packing, and shipping is one of the most error-prone and labor intensive tasks in the warehouse process. This is especially true when you are shipping hundreds of orders to different recipients all day.
You can streamline your picking process by going with a cloud WMS that allows:
- Customized and more organized processes for fewer errors in picking
- Order verification and hands-free picking
- Direct access to shipping partners
- The ability to automatically print the shipping label, without the tedious task of reentering information manually
- The ability to compare shipping rates to make the best decision- all within the WMS
All of this should be able to be done in one place, through the integration with your third-party logistics software.
3. Billing Software
3PL billing can get complicated quickly. With thousands of billable events, different billing cycles, and different service agreements, things can get chaotic fast without the right billing software. However, there is no need to have a separate software. In fact, having a separate software can make things even more confusing, increase the time it takes to get money, and create costly errors that could affect your bottom line.
A comprehensive cloud WMS should be able to:
- Seamlessly integrate with 3PL billing software
- Capture billing workflows for various services on an individual customer basis
- Automatically send billing reports and invoice details
- Reduce the time it takes to get paid for more cash on hand to run your 3PL operations
Going with a well-trusted WMS like 3PL Warehouse Manager can improve your billing practices, so you spend less time chasing your money and dealing with manual invoices, and more time growing and scaling your business.
4. Mobile Barcode Scanners
Mobile scanners allow employees to quickly and accurately count inventory, process SKUs quickly, and provide valuable inventory visibility with customers. Mobile barcode scanners are cutting edge technology that can increase the productivity of your 3PL ecommerce fulfillment operations. Done correctly, it’s the differentiator that can attract as well as retain customers, thus scaling your business dramatically.
Many barcode scanning technologies require additional software and hardware to scan and manage inventory. In fact, most of the solutions depend on connecting scanners to a computer in order to upload data. The challenge this causes is that it prevents real time operations, slows down response time, and complicates processes.
However, you can get the competitive edge and increase efficiency by going with a WMS that integrates seamlessly with mobile barcode devices, allowing accurate and efficient pick and pack processes. These integrations allow for the ability to ensure data occurs in real time, without the need to connect to additional hardware and software. This allows 3PLs the ability to compile, analyze, and archive data from one centralized location saving time and decreasing error rates.
5. Customer Communication
One of the most important parts of running an effective 3PL is providing excellent customer service. This is the best way to ensure that your customers are happy, leading to increased business, repeat consumers, and referrals.
One of the best ways to strengthen every part of the customer journey is by keeping them fully informed on the status of their inventory. Increased communication and transparency makes you more trustworthy, something that is incredibly valuable in the ecommerce space.
A comprehensive cloud WMS should be able to handle all aspects of customer service, including a permissions based consumer portal, transparent comprehensive reporting, notifications of key warehouse issues, and real time status updates on fulfillment and delivery.
What to Look for When Choosing 3PL Software
Finding the right third-party logistics software is integral to running and growing a successful 3PL warehouse. A comprehensive cloud WMS takes over some of the most critical parts of your business, which are the processes behind order fulfillment. When you make the wrong choice, you end up costing your organization time and money. You can even lose customers due to inefficient processes and practices, which can cause your business to suffer greatly.
Fortunately, the right cloud WMS can help you grow your business, while avoiding growing pains along the way. Here are key things you should look for in a 3PL software:
Your WMS is only as good as the technology that it has. You have to make sure the third-party logistics software has up to date technology. This means you can better automate and streamline processes to reduce costs and errors. You’ll also want to make sure the technology is reliable. If it frequently shuts down or doesn’t run as it should, it will not help you run your warehouse properly and end up being more trouble than it's worth. Make sure you choose a well trusted 3PL software to handle all of your operations and scale your business.
Scalable Functionality and Growth
It’s integral that you choose a cloud WMS that allows for you to scale your business. Your goal shouldn't be to remain stagnant, but keep growing. That means more customers, more orders, and more to take care of.
You should make sure to choose a 3PL software that supports and offers room for dynamic growth.
The primary reason any company outsources to a 3PL provider is that their company has grown beyond its means to manage its logistics processes in-house. Your goal for your company is to keep growing, so choose a 3PL software that offers room for growth.
Labeling Compliance Requirements
Sometimes, there are regulatory requirements when it comes to packaging and labeling the product. An experienced 3PL software will have the technology to fulfill these requirements, keeping you in compliance with local laws.
Multiple Customer Architecture
This is a major concern for 3PL organizations. You must have software that can fulfill orders and manage inventory for multiple customers. This is especially important when it comes to making sure you have room to grow.
3PL billing software is an important feature. Billing functions are absolutely critical to making sure that invoicing doesn't get misplaced, unpaid, or mixed up. This allows you to be able to automate processes and keep the charges for them on time, accurate, and in one centralized location.
It’s important for 3PLs to lessen their overhead when possible. Look for WMS software that can fit your needs and is affordable. Keep in mind cheapest isn’t best. The wrong software could actually cost you in the long run.
Look for a third-party logistics software solution that provides the speed and accuracy for the processes you need. Value isn’t just about cost- it’s about handling many moving parts so your business is as efficient as possible. This saves you money in other areas, such as staff no longer using their time on repetitive tasks, and reducing errors, which can really add up.
Having the right 3PL software is absolutely critical to both running and growing your 3PL business. 3PL software solutions are integral to improving customer satisfaction, speed, and accuracy.
When it comes to choosing the right third-party logistics software for your 3PL, you need to consider your options and think about what your business needs now, as well as what it needs when you want to grow.
An integrated cloud WMS can make all the difference in how you run your business. With the right software, you can automate processes, get money faster, enjoy a more integrated warehouse, and keep your customers happy.
It’s easy to see why our network of over 12,000 logistics professionals choose 3PL Warehouse Manager to handle their supply chain ecosystem.
Schedule your free demo today!
What does 2022 have in store for the 3PL Industry?
In our 2022 State of the Third Party Logistics Industry Report, 3PL Central will be sharing how 3PL warehouses can optimize their operations and grow in omnichannel fulfillment by leveraging technology to solve the key issues that warehouses face today.
This year's report will go over the best practices, trends, and challenges facing today’s warehouse to be successful in 2022, including technology, the evolution of the 4PL space, and the ongoing supply chain crisis.This comprehensive and in-depth report also goes over how to best adopt omnichannel and ecommerce fulfillment.
Get the report here so you can keep up with the latest industry trends and more.
Written by 3PL Central
The first cloud-based WMS solutions designed for 3PLs. Powerful, flexible, scalable, and specifically designed to help 3PLs and warehouses grow to the next level.