Tag Archives: e-commerce

How A 3PL Can Benefit An E-Commerce Business

Today, we can buy and sell everything we want online, but one thing still remains the same – items need to reach us. Unlike the traditional method, e-commerce made logistics for retail companies more complicated than it was in the offline era. More and more companies start using 3PL for e-commerce transportation. 

The number of small businesses and retail companies is constantly growing, and the number of customer demands grows even faster. Today, customers define what good service is, and most good customer reviews include fast and smooth shipping experiences.

Here is where third-party logistics providers (or 3PL’s) come to help. 3PL’s are who can help you manage your logistics, warehousing, inventory and load management. In other words, you can fully or partly outsource any transportation needs to a logistics company, and focus on marketing or other parts of your business.

How can you use 3PL for e-commerce business?3PL for ecommerce

  • Supply chain management. A good 3PL can analyze your supply chain, define current gaps and provide solutions to increase efficiency. Also, you can cut unnecessary operational spends with a 3PL and reduce overall spending on logistics.
  • LTL and consolidation. Logistics companies often possess a large carrier network and offer numerous transportation modes. If you are a small company, less-than-truckload (LTL) shipping can be a solution for your time and budget. 3PL also provide consolidation programs to move your goods in the most practical and cost-effective way.
  • Warehousing and inventory. Smooth and consistent order fulfillment is what modern e-commerce companies are looking for. Some 3PL’s can not only manage inbound freight and storage but also take care of your inventory and order fulfillment with the help of their technology and expertise.

Working with a reliable and reputable 3PL can simplify your operational responsibility and enhance your supply chain performance.

Apart from that, here are some comprehensive advantages of outsourcing your logistics to a third-party:

  • Reduce costs, save time. With all the services provided by the 3PL, you can significantly reduce your transportation costs. It also allows you to eliminate manual management and focus on your main competence.
  • Visibility and reporting. Most 3PL providers use transportation management systems (TMS), which lets them efficiently manage every shipment. Technology gives you 360-degree visibility into every operation and assures you keep track of each update.
  • Flexibility. While a 3PL manages your transportation, you stay in control. Regardless of how your transportation needs change with time or demand, a good 3PL can adjust.

To sum it up, working with a reliable third-party logistics provider can benefit e-commerce companies in many ways. From order fulfillment to shipment tracking, a 3PL can provide effective solutions to help your business prosper.

Need logistics help? Contact us now with any questions you have! 

 

The Logistics Behind Black Friday

The holiday season is a tough time for retailers and the transportation industry, and the time between Black Friday and Cyber Monday can be the peak period of the rush. Large volumes of e-commerce purchases are putting more and more pressure on businesses and their logistics managers every year. Today we will look at how the crazy shopping day known as Black Friday came about to change the holiday shopping season forever.

What is the origin of Black Friday?

There are many stories about how Black Friday got its name, but the main story says the origin of the term “Black Friday” came from 1960’s retailers’ slang. After Thanksgiving, the stores went from being “in red,” which meant having no money, to being “in black,” which implied making a profit. Black Friday also stands for the extreme rush caused by the beginning of the shopping season.

Interesting facts about Black Friday and Cyber Monday

Usually, buyers and retailers do not see the details of a company’s logistics and supply chain processes, but there is a huge engine running behind the scenes to keep companies organized and keep shipments coming in and out properly. The journey a package takes from a warehouse to your front door is far more complex than you may think. In honor of Black Friday later this week, here are some interesting facts and insights about the busiest shopping day of the year:

  • Almost 74 percent of Americans plan to spend big on Black Friday sales in 2018.
  • The average purchase amount is estimated to be $483, which equals $90.14 billion of total expenses between Black Friday and Cyber Monday.
  • Surprisingly, men will spend twice as much as women, reaching an average $626.44 for men compared with $342.50 for women.
  • To handle the mass amount of shipments and demand, UPS and FedEx are hiring 95,000 and 50,000 people accordingly as additional workforce.
  • On average, 6 people deal with a package directly before it reaches its final destination.
  • Since 2006, 7 deaths and 98 injuries occurred during Black Friday shopping.
  • Most companies start holiday preparation in the summer or even earlier.
  • The most wanted objects for gifts or personal purchase are gift cards, clothes, electronics, and jewelry.
  • Almost 52 percent of Americans have said they regret their purchases during Black Friday, and nearly 30 percent end up returning items they bought.
  • In 2017, Amazon took 54.9 percent of all online transactions during Black Friday.
  • People shop online more than in stores during Black Friday.

As the competition among logistics companies and retailers becomes fiercer every year, it is important to analyze the data and watch the trends to stay relevant and competitive. If you are a large company that needs help with your Black Friday shipment preparation, reach out to a third party logistics provider like PLS today to let us move your loads for you!

Declining Inventories: Are Shippers Improving E-Commerce Fulfillment?

The 27th Annual State of Logistics Report shows that inventory levels are down and logistics costs are rising.

Given the extreme demands of the hundreds of millions of online consumers who expect free shipping and fast delivery, e-commerce interrupts transportation budgets and regular shipping strategies. In 2015, transportation costs rose 1.3% year-over-year.

Now, shippers are adding DCs, improving warehouse technology and rethinking traditional inventories in order to meet demand while containing costs.

Retailers, manufacturers and suppliers hold inventory to reduce costs and/or to improve customer service. Having too much inventory can cause excess merchandise to be wasted, and not having enough inventory can leave customers without the products they ordered.

According to the State of Logistics 2016 report

  • Between 2009 and 2015, inventory levels rose about 5% annually, well above gross domestic product growth.
    • These years are typically associated with economic growth, so it’s logical that inventories rose, as businesses restocked, gained demand, and fulfilled e-commerce orders.
  • In 2014-2015, inventories flattened. Projections anticipate an ongoing decline this year and next.

Inventory is a substantial asset in most companies – today, businesses have costly inventory loads. At the end of 2015, inventory value stood at $2.51 trillion. The US inventory-to-sales ratio has been steadily climbing.

Advantages to Low Inventory Levels

  1. Reduced holding costs: Inventory holding costs include everything from the utilities used in the space to labor handling the inventory.
  2. Better management: Less inventory is easier to manage, store and retrieve.
  3. More capital and more space: it can be expensive to carry inventory. Maintaining moderate inventory frees up working capital. Less inventory creates more space, overcoming the need to have extra space for surplus product.

Inventory is a key measure of supply chain management; it determines where supply meets demand. Lower inventory levels reduce acquisition and holding costs, but increase the cost of direct or indirect stock outs.

Shippers are paying attention to the economy – holding excess inventory isn’t an efficient strategy. Overall, companies are better managing and optimizing stocks, reaping efficiency and productivity with accurate forecasting.

Smaller inventories free up cash, space and management. Low inventory levels are not an indication of poor forecasting or inaccurate transportation scheduling. Rather, it showcases a company’s streamlined supply chain management strategy – where processes have been assessed, cycle times have shortened, and the company operates efficiently and productively.

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