April 2, 2020 
The advent of online shopping has lead to a significant shift in the market structure and retail spaces.
It brought about a revolution in the area of retail management for specialty retailers who had unique and competitive ideas but did not have the required floor space to execute the plans.
In fact, by 2020, the 3PL market can be estimated as high as $935 billion, mostly because of ecommerce outsourcing.
Present Retail Trend
The upcoming retail market trends have encouraged online trade, enabling better retail management by giving the retailers an opportunity to stage their products and services in a creative and non-traditional manner which increases their brand appeal.
Brands who have not tried out the same, must do so. Trends are moving and so can your brand reach!
Why Third-party Logistics?
E-commerce has brought in extensive business for all. However, logistics is one of the areas where complexity arises as one moves from physical retail to e-commerce.
That is where the third-party logistics retailing comes into picture. The complexity, which comes along with e-commerce, makes a strong case for hiring a third-party logistics provider.
What is Third Party Logistics all about?
In industry parlance, third party logistics provider is the service provider to whom logistics requirements are outsourced.
It refers to any service contract that includes inventory storage and management, picking and packing, freight forwarding, shipping, distribution, customs brokerage, contract management, IT solutions, cross-docking etc.
Need for Third Party Logistics Outsourcing
There is an extensive need for third party logistics. Prime reason being Third-party Logistics brand management ensures that the return process is carried out in such a way that it does not lead to a bad product review.
Here’s why third-party logistics outsourcing is the need of the hour for several retail brands:
- To ensure a smooth delivery to the consumers via online platforms
- In cases wherein goods are returned, the enterprise must manage a whole new process of reverse logistics. A return is not simple as it may sound. A proper procedure must be followed to get the products put back to the stock
- Maintain a continuous interaction with the customers in case of B2C and organizations in case of B2B unless the case is closed
The above three prime tasks are done through the 3PL outsourcing. Online reviews have a significant impact on the perceptions about a brand which are formed outside of a curated website and hence must be taken proper care of optimally.
How Returns are handled
As you must have experienced, each return has some level of inspection and disposition. Important decisions must be taken regarding the returns whether it must go back to the stock, sent to scrap, reserved for liquidation or consider for refurbishment.
Many times, the articles must be cleaned, re-tagged and re-bagged. This happens mostly in case of B2C returns.
Here’s a brief understanding about how B2B and B2C returns take place for quality service deliverability:
- For health and beauty, B2B returns get inspected for expiration dates, packaging etc. and then decision must be taken if they are going back to stock
- For B2C returns, the inspection is done, and only unopened items are returned to stock. Opened items are sent to scrap
With the significant increase in specialization in streams such as warehousing, business analytics, product monitoring etc., 3PL has become an indispensable proportion.
It strengthens the e-commerce paradigm by giving participants the choice and opportunity to perform only those tasks and roles that they specialize in.
As a result, third party logistics outsourcing fits well with the e-commerce ecosystem. It offers efficiency, flexibility, specialization and high-tech proficiency.
Reasons to opt for 3PL Services for your Business
3PL service could be a single provider, such as transportation or warehouse storage, or it can be a bundle of services capable of handling supply chain management.
When a customerorders a pair of coffee mug online instead of a retail store, it would still have to physically reach the customer. That is where the issues of warehousing, inventory, packing, shipping, and tracking, arise.
By using a 3PL outsourcing, it can avail the following benefits:
- Enterprise can save time and money through economies of sale
- Owing to the multiple storage locations, the company can benefit from speedier deliveries and smoothen distribution process. It works perfectly well with both local and international transits
- It helps fast growing business with large order volumes to function well
Returns facilitated by 3PL
Besides the benefits, the most prominent advantage that the 3PL outsourcing offers is the seamless experience of return and refund process, both for the customer as well as the retailer.
While the regular logistics enhance the flow of goods from producer or retailer to customer, reverse logistics manage the process of returns i.e. from the customer to producer or retailer.
The most popular role played by reverse logistics has been involving recovery of warranty, value, repair, redistribution, product recalls, used parts and replacement materials for refurbishment. It may also include end of life recycling.
The reverse logistics, if properly handled, plays a significant role in:
- Boosting sales volume by improving the brand image through better trust relationship with customers
- Become a tool that assists the organization in meeting sustainability goals
- Strengthen faith of customers for your brand
- Seamless return process that ensures maximum customer satisfaction
Understanding B2B and B2C Shipment Process
Every business has its special needs. However, when we look at B2B and B2C markets, they have generic needs regarding shipment. Let’s understand it.
B2B and B2C shipments compared:
- Order Requests: B2B brands mostly go for bulk orders of mostly raw materials and sub parts whereas the B2C channel includes consumer goods such as frozen food, appliances, FMCGs etc.
- Frequency of returns: While B2B returns are much more infrequent as compared to B2C but the former comes with more complexity
- Generic logic behind return: B2C returns are mostly due to personal preference and change of hearts, whereas B2B returns occur because of faults and breakdown of products
- Order Size: Reverse logistics for B2C tends to be few items at a time whereas for B2B are designed around handling bulks
In Conclusion
Third party logistics outsourcing helps in the process with includes both open box and closed box returns from the channel partners, and manage the disposition of returns inventory according to the rules of the organization such as back into good stock for resale, holding in spares inventory to support future warranty events and sending to repair vendors for repair/rework as required.
A report from Forrester Research found that spending by U.S business on B2B ecommerce in a year was more than twice the amount spent on B2C online business. Let’s make your business flourish with quality and focused third party logistics services.
