When it comes to fulfillment and third party logistics, those not in the industry might find it difficult to navigate the waters. For all intents and purposes, we order online and our package shows up in a day or two - voilà. However, every eCommerce business owner knows what happens in between can be the stuff of nightmares! Luckily, third party logistics companies (3PLs) have mastered the art of fulfillment and most businesses of size are now using their services. So let’s dive into 3PLs and explore how the most innovative companies are enabling retailers to create engaging brands!
eCommerce is growing at an astoundingly quick rate. Cumulative data from Statista suggests that the online selling industry will top $4.8 trillion by 2021. This is up from $1.3 trillion in 2008, representing a 269% increase. If you own an online store, go ahead and take a moment to congratulate yourself! Online selling, which was once a manageable, minor aspect of business, has now become a crucial revenue driver for many brick and mortar retailers. And when it comes to business online, consumers have come to expect a certain level of service. At the forefront of these expectations is speed and accuracy, two areas that the fulfillment industry has well under control. With the rare exception, reliable 3PLs can get your parcel to the correct end destination as fast as you need it delivered.
Lately, however, customers are expecting a bit more from their online retailers - just search for ‘unboxing’ on Youtube if you don’t believe us. Not only are customers looking for memorable experiences with the packaging, tracking, free shipping, worldwide delivery and more have all entered the playing field of expectations. This has led to quite the shakeup for logistics companies. When it comes to innovation, however, you’ll find some of the best minds in the business being put to work. At Shipbob, “Our clients request value-added services on a regular basis and we work together to invent and create processes that will provide the client what they're looking for and what Shipbob can deliver on.” If you can think of it, odds are good your 3PL will be willing to work with you to make it happen.
While outsourcing fulfillment has become a necessary part of doing business, losing control of branding, packaging and the customer experience wasn’t meant to be part of the deal. Early on in the shift to eCommerce retailing, there was a void where sellers were unable to offer their goods in anything but plain packaging--brown cardboard boxes with packing peanuts. This opened the door for companies like innovative 3PL NRI Distribution. They realized from the outset that maintaining brand integrity was a key part of any online business, and was one of the first logistics companies to offer customers the option of using their own packaging. In their words “[our] core values revolve around providing custom and flexible solutions. Value-added services are primary to that. Many of our clients request [custom packaging] which is often why they choose us in the first place as their 3PL.”
Mention ‘custom packaging’ to any operations manager and we’re fairly confident you won’t be met with excitement. After all, the core business of fulfillment is getting the package to the right door, fast and cost-efficiently. That’s what they do. SKU, LTL, kitting, RMA’s - this is the language of fulfillment and until recently, value-added services hadn’t entered the foray. But more and more innovative shipping companies are popping up. At ShipMonk, for example, they have seen a sizeable amount of their customer base turn to the subscription model. As a result, ShipMonk has adapted, now offering custom boxes and tissue. And they’ve seen the results as well; “our clients trust us in packing their product the same way they would. We have many measures in place to make sure we pack the product to deliver the unboxing experience our clients are hoping for.”
Now why, you may ask, doesn’t every fulfillment company offer custom packaging solutions? It’s a clear revenue driver, and indeed has come to be expected by many eCommerce retailers. The answer is relatively straightforward: they are worried about the complications that come with custom packaging. As stated earlier, a 3PL’s core business is speed, accuracy and efficiency. Custom packaging throws a wrench in the mix. So how can the fulfillment industry go about offering this to their customers without sacrificing their systems? The answer shouldn’t surprise you: keep it simple.
Utilizing packaging components like custom tissue, stickers or custom tape is an easy way to maintain your brand. There’s no need to create ridiculous displays or boxes with 17 different components that each have to be assembled individually by hand. While no doubt these look amazing, they fall well short of the ‘worth your time’ line. So with simple solutions, 3PLs don’t even have to break stride to include custom packaging. And with these options becoming more prevalent, logistics companies are embracing the change.
In the words of CEO and Co-Founder, Mathew Galt of Fulfilio, “customers love being able to work with providers who care about their customer’s delivery experience as much as them, and one that helps carry their brand message through the journey.” He goes on to say “we get a lot of customers requesting any number of these. From personal notes, custom wrapping paper and packaging, to the way in which each item is kitted. It’s how they’re able to set themselves apart, and our staff love being a part of that experience.”
What would a conversation on fulfillment be without bringing up the $784B elephant in the room. Amazon has completely changed the way that eCommerce and fulfillment works. Granted, they’ve changed a lot of other aspects of life as well, but when you break it down, Amazon is the largest fulfillment business in the world. Indeed, just a few weeks ago Amazon made the announcement that 100 million people are “Prime” members, making them the largest subscription outfit in the world as well. What has made Amazon so successful? Well, in large part it’s due to their branding
Early on in their development, the marketing team at Amazon realized that the moment of receiving a package provided a huge opportunity for them as a business. Now on their online marketplace, it’s rare to be able to pinpoint the store that you’re buying from. More likely you simply know that you’re ordering from Amazon. With Amazon you are still able to customize what is inside of the Amazon box. However, the modern day 3PL can offer an enticing alternative here: complete custom packaging solutions. Not only do 3PLs like Shipbob not charge a thing for extra custom packaging, they’ve made it a distinct selling point of their offering; “At Shipbob, we believe each client's brand should stay in the spotlight through the unboxing experience, not ours. We build a partnership with the seller to service their end customers while growing their brand and ensuring a stronger connection between our customers and their end customers.” The modern-day 3PL makes their mark on delivery timelines and accurate fulfillment; you make your mark with what you’re selling and how it’s presented. It’s the perfect partnership.
Another aspect that independent 3PLs are taking the initiative on is reducing their environmental impact and making their industry more sustainable. The push for eco-friendly options is not unique to any one industry, but in an industry that is mostly operations behind the scenes, it’s uplifting to see a concerted effort being made. Michael at Fulfillrite makes it clear that 3PLs have embraced positive social and environmental trends that have swept other industries. Putting it simply, “sustainability is a huge concern, especially with the boom of eCommerce.”
Now, plenty of people claim to be making sustainability a priority without ever following through on their promises. So what are 3PLs like Fulfillrite doing? Quite a lot, as it turns out. “[We have] a number of initiatives to seriously reduce waste and make fulfillment as environmentally friendly as possible. Firstly, we have software that determines the most efficiently sized packaging for each item. Every single item we ship is measured by 3D imaging programs and fed to the computer. Aside from saving the customer money on packaging and dimensional weight charges, we don't waste space. The environmental impact of over packaging is astounding, so this really helps.”
With the tidal wave that is eCommerce, fulfillment will continue to play a huge role. Those 3PLs that are offering value added services such as custom packaging and kitting will continue to be far more attractive for businesses that are trying to build their brand.