The 3PL eCommerce-life

One thing is to partner up with a 3PL provider to grow the business, reduce the costs and generate a higher profit – legally reasons – but what is the name of the game now?

 

(picture credit Ugo Mendes Donelli)

 

Baam! The business-honeymoon is over and the champagne glasses are now empty. As with every other partnership it comes with obligations so the wealthy life can be redeemed. Every day will be a test and not only when it comes to trust but with far more consequences. It doesn’t necessarily mean that it needs to last until death separates the eCommerce company and the 3PL provider. However, a break-up is not without its costs. A lot of resources goes into forming a partnership and leaving will also imply its costs.

 

Why speak about breaking up when the wedding just ended? It should never be the case because a process before the agreement has been carefully conducted. Might be done with support from the love doctor aka. industry specialists to make sure the perfect match in heaven was made. Why so serious then? Since there will be a state-of-mind change from dating to partnering. The swift from one state to another can be tough to handle if not prepared. A piece of advice is to have an overall process where these elements can be inserted into instead of creating more troubles for the mind to cooperate with. The ARBAR-steps model has shown its value as the overall process to secure that the relationship is maintained and even for the trust to grow. This also allows learning about what is important and what to focus on going forward. As it is with every other relationship it is necessary to listen to each other. Even the small thing needs to be picked up and yes there is money in between as well. However, if an effort is put into this then it should without no doubt be successful for both parties. The process is alpha & omega and it is on-going.

 

Outsourcing the warehouse as an eCommerce company to a 3PL provider might come with more benefits in a “young business age”. The time can be a challenge as the years go since routines tend to be carved into stone. It is never too late to find a partner to join forces with. In early age then a business is helped by reduced overhead costs that lead the way of scaling up and it gives back your time. Nevertheless, when partnering up the goals are aligned to the current situation and the once wished for in the future. Supporting each other’s goals is essential for a good partnership.

 

The game details:

  • Check the chosen sales-channels are available and up running through the partnership. This counts for the current once used and if more are available as a part of the service level agreement (SLA). Even if the new channels are not in focus to start with, then receiving data through a test would give insight for later use. Direct-to-everywhere is a growing service approach to be near the segments in the market all the time.


  • Arrange and alter your product categories and especially if adding new stock-keeping-units (SKU) as a part of the plan. They should also be counted beforehand so it is covered by the SLA.


  • Universal Product Code (UPC)/barcode should at the same time be checked when looking at SKU to ensure it is possible to track the trade items. This is simply any confusion or losses when changing point of location.


  • There is a price for every aspect of shipping through a 3PL provider but how this is presented might not be with a break-down. It is not only the RSPPSR services (receiving, shelving, picking, packing, shipping, and returning) but also the access point through the WMS (warehouse management system). There might be a need for 3rd party API (application programme interface) integration or customisation.


  • It is important to identify the costs that follow each item and take to revision if it is beneficial to have in the assortment. Careful tracking of inventory is needed for the profitability reporting on costs of goods sold (COGS). This will also be used to determine potential savings.


  • The 3PL provider Corporate Social Responsibility also becomes a part of the eCommerce company’s account. Then it makes sense to pick up if bigger batches are shipped with multiple linear drops off as an example. If possible, the 3PL provider can connect eCommerce companies that use the same zone manufacturer or same distance shipping passage.  

 

A good relationship has been tested so it can grow even stronger. Growth might be an objective with the partnering up with a 3PL provider. This makes it a hot topic when widening or deepening the assortment to first check with the 3PL provider. The on-going conversation where both parties ask, listen and respond will win. Direct-to-everywhere is not the name of the game but rather the strategic approach used as the new benchmark. It might be that it is not enough for eCommerce companies with only one 3PL provider but this should never undermine the relationship. There might be future potential in other markets where a new 3PL provider is needed. Nowadays this can be obtained by the networks and connections so multiple parties benefit from it if not choosing – one standard fulfilment including a shopping cart. It is key to develop forecasts and follow up monthly order volumes closely. 

 

The process needs to be rewarding and this can be achieved when the name of the game is automation over manual work. Resources need to serve the best course and when possible they need to be released to find their way to new once. Again is important to take the partner seriously and let them know what is expected so it can lead towards both goals and objectives.

 

Stay up-to-date and connect with us on LinkedIn. We are friendly Vikings both when it comes to formally and informally meetings. Hit the “Lets talk” button so we can start our journey together. Glory and honour await us! Friendly regards, the Viking Consulting team

PLEASE SHARE

Share on facebook
Share on twitter
Share on linkedin
Share on email

Our B2All Tone-of-Voice

The messages originate from experiences and told as stories. The storytelling makes it possible for messages to be received by a wider audience. (picture credit

Read more »

The 3PL match

One thing is to find a third-party logistic provider but another is to be partnering up to realise the business’ mission. A step has been

Read more »

The Doughnut Paradox

What makes up the IT services nowadays? How are IT businesses’ services delivered? Why is it a doughnut paradox after all? To start with we

Read more »