For many growing eCommerce brands, one of the biggest challenges they face is finding the right courier company to ship their orders. Not all couriers provide the same shipping options and often more than one courier service is required to successfully ship your products worldwide. By partnering with a 3PL you are given access to a much wider range of courier options for a fraction of the cost. Continue reading for how a 3PL can save you a ton of cash on shipping costs without compromising your customer satisfaction levels.
Shipping Rates & Options
Because of the large volumes of orders being shipped by 3PL’s with their courier partners, they can secure cheaper rates and choose different services on an order-by-order basis. For example, Malpa 3PL uses AusPost, DHL and SEKO (to name a few) to provide personalized shipping rates to brands based on their product type and size, order volume, distance shipped etc.
For a lot of up-and-coming eCommerce businesses, most of their order volume is shipped domestically with only the occasional international shipment required. In this scenario, the cost of shipping internationally on their own would be quite high due to the low volume of shipments (think buying in bulk vs buying retail). Now, there are a few ways that eCommerce brands typically deal with this.
1. Charge the customer variable shipping rates that change significantly based on what they order and hope it doesn’t turn them away from the purchase.
2. Absorb some of the shipping cost so that the customer can afford the purchase, ultimately eating into the businesses profit margins.
Neither of these situations sound ideal, because they’re not. Nobody wants to push their customers away or lower their profit margins. This is where 3PLs come into play, because of their access to a range of shipping options and ‘bulk’ rates, they can save you much needed cash by choosing the service that best suits you and your business for every single order.
Packaging Options
If you’ve been fulfilling orders for your eCommerce brand yourself then you will know already how expensive order packaging can be. Boxes, satchels, padded mailers, tape, void fill etc. all cost money and if you’re not yet shipping a high volume of orders these costs can prove to be much too excessive for your business. Especially if you have a wide range of products of varying sizes and weights. This is not a problem for 3PL’s as they are able to purchase large quantities of packaging supplies in bulk at discounted rates.
Most couriers base their rates off size and weight, 3PL’s are acutely aware of this and how much different weights and sizes cost. This, along with their access to a variety of packaging options allows them to customize each order to achieve the cheapest possible rate for you, while ensuring your products are shipped safely and securely.
Sustainable Packaging
With the ever-growing importance of the ethical and sustainable use of materials in logistics, the method of using the cheapest plastic packaging with the cheapest plastic void fill is outdated. However, this doesn’t mean you have to spend a fortune on recyclable or bio-degradable alternatives, at least not when you partner with a high quality 3PL. Again, it is the bulk purchasing abilities of a 3PL that will keep your money where you need it most, in your pocket. Most high-level 3PL’s will provide a range of affordable, sustainable packaging choices for brands who are environmentally conscious or just looking to lower their carbon footprint.
Up-to-date Technology
Partnering with a 3PL that stays up to date with modern logistics technology can save you a lot of money over time and significantly increases the efficiency level that your orders are picked, packed and shipped at.
By staying current, a 3PL can ensure it is ahead of the curve with any improvements to operations brought on by new software. The more current and streamlined a 3PL’s processes are, the more savings they will be able to offer your brand.
Drop shipping vs 3PL Costs
A lot of people think that drop shipping is the cheapest way to start an online business due to minimal overheads and a ‘shipped-to-order’ process. While this is somewhat true, it isn’t the whole truth. As demonstrated previously in this article, purchasing items in bulk is a significant money saver for any online company looking to provide products at an affordable price.
- When drop shipping, products are only purchased and shipped from the supplier when your customer places an order. This means that buying in bulk is not an option and also means that you are unlikely to receive discounted rates on shipping, packaging, products etc. Without discounts on the crucial products and services that you provide, these costs are likely to eat into your profit margin significantly more than they should.
- When partnering with a 3PL, costs for packaging, void fill, shipping etc. are significantly reduced due to the ‘bulk-buying’ method.
