Notes

How to Select the Best Partner For Your Ecommerce Business Part I

Third party logistics in supply chain management refers to the use of third-party companies to perform specific elements of an entity's logistics, inventory, and order fulfillment requirements. These companies typically have existing relationships with entities that own, operate, or manage a logistics asset. The companies act as logistics brokers. They purchase the inventory at a wholesale rate from the entities and then sell it to the entities on an individualized cost for a prearranged price. They also provide warehousing services and inventory brokering to the entities. They also provide third-party freight forwarders to the entities.


A great way to improve the efficiency of your supply chain is through the use of third party logistics. Purchasing freight forwarding services from a third party logistics company will help your business in several ways. First, you can streamline the transport of goods and raw materials between your factory and customers. By using a third party to provide these services you will save both time and money. Another advantage to using a third party logistics company is that they will typically be much more experienced and knowledgeable than your internal resources and they will be able to take care of all the details in between you and your shippers.


The most obvious benefit to using third party logistics services is that you will be able to streamline your shipping procedures. Shifting loads between vehicles in different zones will lead to delays in the arrival of goods. Also, your warehouse will not be able to keep up with the extra demand. By using third party logistics services, you will be able to reduce the number of zones in your warehouse and increase storage space. Streamlining your distribution and shipping processes will improve the overall efficiency of your supply chain and increase the amount of time that your goods are in your possession.


The disadvantages of using third-party logistics outsourcing services are also easily seen. If the logistics services provider is unable to meet your demands or if they do not have enough experience, your logistics operations could suffer. In addition, outsourcing to a third party will negatively affect your good name and brand if the relationship goes sour. The cost of the services that you require may be beyond what you can afford. Moreover, if the third party fails to live up to their end of the deal then your reputation may suffer.


While there are certainly some disadvantages associated with using an in-house logistics provider, ecommerce businesses can greatly benefit by using third-party fulfillment services. These services can provide you with several benefits including an expedited supply chain, improved returns on investment, reduction of freight costs and faster shipment times. In addition, ecommerce businesses can utilize services such as freight forwarders and air cargo carriers. A good fulfillment company will also ensure that your products arrive to your customers with optimal levels of quality.


Ecommerce businesses stand to benefit the most from a collaboration with a fulfillment company that is capable of providing a comprehensive variety of services. The most important services that your logistics partner should be able to provide include the following: warehousing and delivery, transportation and logistics, and return and refund management. The last benefit is particularly important for ecommerce businesses because this is the element that can eliminate or reduce the greatest amount of risk. Warehousing and delivery are the elements that entail the greatest risk; if these services are improperly executed or performed improperly, your customers stand to lose a great deal of money and the products that they purchase will not be delivered on time. This is why it is imperative that your fulfillment partner has extensive experience in these elements of your core business.


In addition, your logistics partner should have extensive experience in the supply chain industry and should embrace the concept of logistics efficiencies. They should have extensive knowledge in the development of customized shipping applications, air cargo regulations and requirements, custom container options, air freight consolidation and warehousing solutions. The fulfillment firm should also embrace expertise in supply chain software, data interchange, RFID and other internet-related technologies, manufacturing system integration, contract management, technical support and other internet-based applications. By having a partner that is committed to expanding their knowledge and acquiring the latest technological advancements, your ecommerce business stands to benefit greatly.


Last but not least, you want to make sure that your logistics partner has extensive experience in fulfilling your customer's needs. This is why it is essential that they have an understanding of all facets of your inventory management. This means having a full understanding of your inventory levels, your shipping processes and the methods by which you are collecting your monthly inventory as well as any special sales that may affect your ability to meet your customer's needs. Your ecommerce fulfillment provider should be able to integrate your supply chain procedures, including your labeling, packing and pick and pack processes. The firm should also have extensive experience in your industry, including your shipping processes, your warehouse, your transportation and logistics, as well as the entire distribution network.

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