Ship fast and scale your business
Third-party logistics, or 3PL, is a major part of an effective e-commerce supply chain. 3PL firms make it simple for companies to outsource some or all of their logistics and warehousing.
By working with a 3PL provider, online stores can outsource the responsibility of inventory management, product order lists, and order fulfillment to a 3PL provider. The result? Faster shipping for their customers, and more time to focus on what they do best — running their business.
The logistics industry isn’t like it used to be. Shipping volumes are rising, the pressure to deliver internationally quickly is higher than ever, and there’s just so much competition out there.
Then, of course, there’s warehousing. Traditional warehousing was designed for wholesale — not for small or medium e-commerce businesses.
When you’re just getting started, your order volumes are low, or you’ve got a brick-and-mortar store, managing your own logistics and even storage is reasonable.
However, what about the other important things that’ll help your business grow — like sales, product development and marketing? As you grow, the time spent managing logistics from start to end will likely cost you more than finding another solution.
With small shipment volumes, it can be tough to negotiate terms for shipment contracts. Minimum shipping volumes often become a roadblock for small and medium-sized companies that want to scale up.
Having your own warehouse ties up your capital. For many online stores, investing in walls and shelves isn't an option.
Let your customers choose their preferred delivery methods and take advantage of your 3PL partner’s pre-negotiated and competitive logistics contracts.
Seasonal variation in demand can be a huge deal for small and medium-sized e-commerce businesses.Hiring a seasonal workforce can be a challenge too. By partnering with a 3PL partner, it’s one less thing you have to worry about.
E-commerce managers should have time for more important things than picking, packing, and shipping. A 3PL partner can help you create the time to scale and grow your business.
1. A customer orders a product from an online store
2. The order is automatically transferred to the 3PL provider and processed in storage
3. The stock balance is automatically updated in the online shop
4. The product is stored in the warehouse that best fits your needs
5. The order is processed, neatly packed, and delivered
6. The customer receives their product anywhere in the world by their chosen delivery method
Every e-commerce business is unique — there’s no rule of thumb when outsourcing becomes a competitive advantage.
Though, a good indicator is when logistics becomes a time-consuming bottleneck, or it's challenging to get the shipments out in time. Some growth-focused e-commerce businesses even invest in a highly efficient supply chain before a single item has been sold.
Is 3PL right for you?
We’ve created a simple framework to help you answer that. Download the checklist and assess your logistics position today.
”Looking at shipping volumes only may not give the right picture. Each e-commerce business needs to evaluate its own situation”.
Rickard Wigrund, Business Development Manager, OGOship
3 most common logistics services offered by 3PL service providers
3PL is a complex field, and many service providers are specialized. Some may focus only on transportation, and some on warehousing or distribution. And, in reality, only 42% of global 3PL service providers even name e-commerce as a service they offer.
Customers expect fast deliveries — without paying for higher shipping costs. To remain competitive, e-commerce firms often outsource their logistics and warehousing. In fact, almost half of e-commerce businesses rely on 3PLs to sell across borders.
OGOship is a 3PL company specializing only in e-commerce. Our mission is to make sure e-commerce businesses can ship their goods fast and cost-effectively, all around the world.
Start by evaluating the service providers on a few key areas: customer service, warehousing, specialization, management tools, and costs.
Does the service provider prioritize customer service? What communication channels are there? What are the service levels in case you need to contact support?
In partnering with a 3PL company, reliable customer service is essential. If the service provider doesn't have clear and consistent processes in place, you may not get help quickly when you need it most. OGOship has an excellent track record in providing first-class customer service for its clients.
Evaluate their ability to offer you different warehousing options. Does your partner have automatic or manual warehouses? Are different warehouse locations available?
OGOship has both manual and automatic warehouses in its network. If you’re sending large volumes and want to emphasize quick delivery, the automated warehouse might be your best option. If your shipments need more customization, a manual warehouse could be a better solution for you.
OGOship has several warehouses in Sweden, Estonia, Finland, and the Netherlands, with a new warehouse opening in the United States in 2020. With multi-warehousing, you can store your goods in any location, ensuring fast shipping times and a cost-efficient supply chain.
Some 3PL service providers specialize mainly in transportation between locations, while some can handle everything from storage, fulfillment, inventory management, and transportation. Some 3PL companies are even specialized in a specific industry.
OGOship is specialized in e-commerce logistics and warehousing. We provide outsourced logistics, warehousing, and fulfillment services.
Do they offer a management system that easily integrates with your e-commerce platform?
Smooth integration ensures that orders are picked, packed, and shipped, and inventory levels are updated in real-time.
Some service providers have systems that allow e-commerce businesses the possibility to boost sales through logistics — cool, right?
OGOship's myOGO, for example, has features like Campaign Engine, which allows mass customization of orders straight from the system. You can add rules to change shipment types according to the order value, or add additional products. Talk about getting creative!
When choosing the right 3PL partner for your business, it's crucial to have a clear understanding of the costs. Remember to check the small print and ask: is there a minimum monthly spend? What are the account set-up fees? How much does software integration cost?
OGOship's pricing model has no hidden or getting started fees — just pay as you go by order volume. Integrations with most common e-commerce platforms are free and ready to use. Create a free myOGO account and take a look around or request a quote.
”There are so many things you need to consider when evaluating which 3PL partner is the right one for your online store’s needs. One of our strengths is a strong emphasis on customer service. We are always ready to take one more step to ensure everything works out smoothly for our customers. ”
Tim Kannerbro, Business Development Manager, OGOship
2PL, or second party logistics, means that a customer buys single services such as shipping goods, customs, or storage.
3PL, or third party logistics, is when a company outsources services related to the whole supply chain. A 3PL provider manages the material flows or related actions on behalf of the client company.
4PL, or fourth-party logistics, is when a service provider provides logistics services for the customer's whole supply chain and is also in charge of directing and developing their logistics.
Dropshipping is an operating model where an e-commerce owner sells products in an online store, but the manufacturer delivers the products directly to the customer.
Reverse logistics includes things like customer returns, warranty, and service returns. In reverse logistics, the direction of the material flow is from the customer to the supplier.
Ready to learn more? Our experts will answer any questions you may have on how to get started, what the key features are, which warehouse locations bring your e-commerce business the maximum benefit.