Why Integrated Fulfilment Services are Growing in Popularity

Integrated fulfilment services have become increasingly popular with many online retailers, sellers and eCommerce companies.

This suite of services, which fall under the umbrella of third-party logistics (3PL), are comprehensive solutions that handle various aspects of the supply chain for businesses that either do not have their own facilities, or wish to explore a fully-managed alternative. Services typically include warehousing, inventory management, order processing, and shipping.

However, as well as fulfilling orders, an integrated fulfilment provider will also be able to handle returns and refurbishment, alongside outsourced customer service.  

At its peak in 2022, the global 3PL industry was worth $1.48trn, as a result of the economic bounce back following the Covid-19 pandemic, and rapid growth of online shopping. 

While there's been a slight tail-off since then, the global revenue of 3PL is expected to rebound again and hit $1.45trn by 2026. 

Using a 3PL, or integrated fulfilment company, has many advantages. These are some of the main reasons integrated fulfilment services are growing.

Key Features and Benefits of Using an Integrated Fulfilment Company

The growth of the 3PL market has been underpinned by a number of different factors. The Covid-19-fuelled eCommerce boom has created a need for more warehouse space, as well as access to technology and expertise that facilitates seamless order fulfilment. Meanwhile, online retailers have also sought out 3PLs that can provide cost-efficiencies and the ability for them to focus on their core activities. 

This applies to both SMEs and established organisations. Growing start-ups turn to integrated fulfilment providers when they are no longer able to keep up with demand. Even larger businesses that regularly require thousands of products to be shipped each month can make efficiencies when working with a third-party fulfilment company. 

• Comprehensive Services: 3PL providers offer a wide range of services that cover the end-to-end logistics journey. This includes receiving and storing products, order processing, pick-and-pack, deliveries and returns. 
• Scalability: The best 3PLs provide consultative support that can quickly adapt to changing requirements as businesses grow or experience peaks in demand.
• Reduced shipping costs: Bulk delivery discounts can be offered by having storage, packing and distribution all in one place. Integrated fulfilment companies will often have strategically placed, nationwide fulfilment centres. This enables them to be more efficient with transportation costs and thereby offer lower shipping rates. By outsourcing fulfilment, eCommerce retailers can also avoid the high costs associated with maintaining warehouses and hiring staff. 
• Seamless integrations: 3PLs provide plug-and-play and bespoke integrations with the leading software providers, including ERP systems such as Netsuite and cloud-based order management systems like Linnworks. A 3PL will be equipped with the latest security technology, item tracking, communication and processing tools to ensure your orders are delivered safely and efficiently.
• Grow your business: Outsourced fulfilment gives you time back to focus on other areas of strategic importance, like product development and marketing.

• Enhanced Customer Experience: Features like real-time tracking, order customisation, and a wide range of shipping options will help to improve overall customer satisfaction. Some 3PLs will also provide access to fully-trained customer service agents that act as an extension of your brand. 

How Fulfilment Services Work

The fulfilment process is fairly simple and should make your business work a lot more efficiently. Firstly, you'll deliver your stock inventory to the designated fulfilment centre. The costs involved here can depend on where the stock originates, how much you generally sell and whereabouts the fulfilment centre is based. 

Next, the integrated fulfilment company will sort and store all such stock, using a number or barcode system to ensure everything is well organised. As part of the inventory management process, your 3PL will record stock movements and can inform you when inventory is getting low.

Once you receive an order online it can either be down to you to forward on to the fulfilment company or utilise integrations with your eCommerce store to directly relay orders. When doing so this should automatically deliver information about the order, including:

• Customer name
• Delivery address
• Product(s) ordered, quantity and other variables
• Any special instructions (gift wrap etc.)
• Shipping method

Finally, the order should be picked and packed, then despatched to your customer on time. If there is an issue whereby the the customer wishes to return items, then most fulfilment services should process these as well.