A Beginner’s Guide to Third Party Warehousing and Fulfilment

Outsourcing third-party logistics holds many benefits for a lot of businesses in most industries. Rather than taking care of certain tasks in-house, it enables specific jobs to be done by professionals with greater expertise. Plus, it frees up more time for you to focus on doing what you do best and growing your company.

That’s why many firms, especially in the world of eCommerce, are turning to third-party logistics and third-party warehousing and fulfilment services to support their business model. Whether you already run an established eCommerce company or are just starting out, this beginner’s guide outlines the options available for third-party logistics, warehousing and fulfilment services and also helps you to decide whether it’s a good strategy for your business.

What is Third-Party Logistics?

Third-party logistics is the outsourcing of elements within the supply chain of storage of goods, inventory management, and even the despatch or shipment of goods. When referenced by a business, third-party logistics could be all or part of the logistics supply chain. 

What is Third Party Warehousing?

Third-party warehousing is simply outsourcing all of the warehouse related elements of your fulfilment process to another company. The warehousing element of any eCommerce business can be complicated within the supply chain, especially as it grows and has many more orders that need fulfilling.

Rather than own or rent out a warehouse for storing products and employing staff to deal with picking and packing orders, outsourcing to experts can be a much better idea. This way, when you receive an order online, it will be picked and packed by your warehousing partner before being transported or picked up by the delivery partner in the supply chain.  

How will Third-Party Warehousing Benefit My Business?

The main advantage of using third party warehousing is that it can streamline operations and simplify this section of the fulfilment process. Creating a new logistics department within your business will involve a lot of extra administration work that can take away from your main aim. Using professionals should ensure that a quality job is done as well, rather than attempting to control everything yourself.

With the right fulfilment provider increased orders within peak periods or projected growth can also be managed effectively giving your customers the best possible service.

It can be expensive to run your own warehouse, with the costs of rent, maintenance, staff and all of the inventory soon adding up. Making mistakes can further increase these, so in many ways, it’s safer and more effective to choose third party warehousing from the start. 

What is Third-Party Fulfilment?

Third-party fulfilment is when part or all of a business’ distribution and order process is outsourced to one or more other companies. Warehousing makes up part of this but there are many other elements. When a business uses a full third party fulfilment service all it needs to do is the source and sell products, leaving the rest to other logistics companies.

More commonly, businesses will use third party fulfilment services for only select parts of their fulfilment process. This enables them to maintain a certain level of control while using the benefits of experts for other areas.  

Does Third-Party Fulfilment Cover Shipping?

From the moment a customer order is placed to them receiving the item, it’s possible to use a third-party fulfilment service for all the stages. Along with warehousing, picking and packing orders, delivery fulfilment is also possible by letting an expert company take care of your shipping.

This can be well organised so that once the warehousing aspect has been taken care of, items for delivery will be picked up or transported to the shipper without your business getting involved. Or if you use part fulfilment, the same can be done from your own warehouse.

Should I Consider Third-Party Warehousing and Fulfilment?

There are a few clear benefits of using third party warehousing and fulfilment:

• Streamlined process: From an order being placed to reaching your customer, using expert third party warehousing and delivery firms within your supply chain can streamline the whole process.
• Cost-effectiveness: Outsourcing is an additional cost to factor into your business budget, but it should be more cost-effective than paying for extra staff and facilities, plus with the right partner, there should be fewer costly mistakes made.
• Greater focus: It allows you to spend more time growing your own business rather than learning and focusing on tasks such as packaging products.

Learn more about our fulfilment services, from despatch to returns.