In today’s fast-paced and digitally interconnected world, brands are constantly seeking innovative and efficient ways to distribute their products. One method that proves to be popular is multi-channel 3PL (third party logistics). In this blog post we’ll explore how it works and why use multi-channel 3PL as a distribution strategy.
What is Multi-Channel 3PL?
‘Multi-channel’ refers to the practice of selling products through a combination of routes. For example, online marketplaces (Amazon, eBay etc.), physical shops, and D2C (direct to consumer platforms). ‘3PL’ stands for third party logistics , which describes the outsourcing of logistics and supply chain management to an external company.
According to Statista, the global logistics market is expected to exceed over 13.7 trillion US dollars by 2027.
The multi-channel 3PL distribution model involves a business using a specialist provider to handle the different aspects of product distribution across a range of sales channels, The external supplier would manage warehousing, inventory management, order fulfilment and shipping. By leveraging the expertise and resources of a third party logistics partner, businesses can optimise their distribution processes and enhance overall customer experience.
How does Multi-Channel 3PL work?
The 3PL provider stores the brand’s inventory in strategically located warehouses, which allows for efficient distribution across multiple channels without the need for businesses to maintain their own storage facilities.
By offering integration across a range of sales platforms, the third party logistics partner can pick, pack and transport items on behalf of the business when a customer places an order. This is an automated process that ensures timely and accurate fulfilment. The channel integration across multiple e-commerce platforms and marketplaces allows for synchronising of inventory levels to avoid overselling.
Additionally, a good 3PL provider will have their fulfilment base located close to major transport routes to offer efficient and cost-effective distribution.
The third party logistics supplier will also handle product returns or exchanges, including product inspection, refund processing and restocking.
Why use Multi-Channel 3PL?
In a highly competitive business landscape, efficient product distribution is vital for success. Ultimately, multi-channel 3PL offers businesses a comprehensive and cost-effective solution to overcome the challenges associated with managing logistics and supply chain operations.
Scalability
Multi-channel 3PL allows brands to scale their distribution operations without the need for significant capital investment. With the help of a good 3PL partner, a business can expand their product reach, enter new markets and handle increased order volumes seamlessly.
Expertise and Resources
3PL providers specialise in logistics and supply chain management, so by partnering with them businesses gain access to their expertise, innovative technology and established networks. This eliminates the need for companies to build and maintain their own logistics infrastructure, which saves time and money.
Operational Efficiency
Outsourcing logistics to a 3PL provider streamlines the distribution process. Subsequently, by leveraging the warehouse management systems and robust order fulfilment capabilities that are on offer, businesses can achieve improved order accuracy, faster order processing and reduced shipping times. This, in turn leads to enhanced customer satisfaction, loyalty and positive referrals.
Flexibility and Diversification
Multi-channel third party logistics is a proven model for diversifying into new sales channels and reaching customers across a combination of e-commerce and physical avenues. This versatility reduces dependency on a single channel and expands the company’s customer base.
Cost Savings
Utilising a 3PL specialist helps businesses minimise the costs associated with warehouse space, staffing, transportation and investment into technology. Additionally, the economies of scale achieved by 3PL partners can result in lower shipping costs due to the high volume of goods they distribute.
The benefits of multi-channel 3PL are undoubtedly clear. As e-commerce, social commerce and omni-channel retail continues to grow, embracing multi-channel third party logistics is of strategic importance for businesses looking to get ahead of their competition. Our third party logistics team are experts in multi-channel management and distribution. Plus, we have a range of storage and fulfilment options. We’ll find bespoke solutions to help you sell your products around the world with ease.