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7 key technologies to look for in a 3PL: A game changer for ecommerce fulfilment
Order fulfilment

7 key technologies to look for in a 3PL: A game changer for ecommerce fulfilment

Yukta Anand
August 16, 2022
mins read

Technology is driving the world today, including ecommerce. The use of technology and automated processes has proven to have multiple benefits for ecommerce, like streamlining supply chain logistics, saving costs and providing insights for decision-making.

Ecommerce brands that can fully harness the advantages of the technology will be ahead of the competition. One way ecommerce brands can do this is by partnering with a technologically robust 3PL (third-party logistics) provider.

On the flip side, if your 3PL provider is not tech-focused, it can harm the profitability and credibility of your brand as well as ruin a customer’s shopping experience. It can also lead to increased fulfilment costs, manual errors, and inefficiencies in order deliveries, thus hindering your ecommerce brand’s growth.

In this blog, you will learn what a 3PL is, the benefits of partnering with a tech-focused 3PL and the essential technologies you should look for in a 3PL to stay on top of the ecommerce game.

What is a 3PL?

A 3PL (third-party logistics) provider offers logistics services such as storing inventory, picking, packing, shipping orders, and managing returns. Ecommerce brands can outsource their operational logistics to a 3PL provider and save time which they can then spend on their core business needs. For instance, Eshopbox is a 3PL (third-party logistics) provider that offers a full-stack ecommerce solution.

3PL providers use advanced technology to boost the efficiency of operations, drive down fulfilment costs, and ensure fast delivery. Many 3PL (third-party logistics) providers have recognised the importance of technology in ecommerce. As a result, they are investing heavily in it and its benefits.

Benefits of partnering with a tech-focused 3PL provider

The modern supply chain has no room for errors, which is where technology comes in handy. State-of-the-art technology can help ecommerce brands in many ways, such as:

1. Save time and reduce manual errors

Ecommerce brands can save time and reduce the chances of human errors by automating processes like receiving orders, updating inventory, order tracking, and processing returns.

2. Save costs

Ecommerce sellers can drive down fulfilment costs by distributing their inventory into multiple fulfilment centres spread across the country to reduce orders' transit time and shipping costs. Moreover, it makes processes efficient which helps in reducing costs.

3. Take data-driven decisions

A technologically progressive 3PL provides ecommerce brands with data and insights to find out KPIs (Key Performance Indicators) like order accuracy rate, sales velocity, and return rate. These metrics help them get complete visibility of their business performance and then make informed, data-driven decisions to improve upon the same.

4. Improve customer satisfaction

Technological tools help ensure a smooth order fulfilment process with high order accuracy. For example, barcode scanners and conveyer belts reduce the chances of errors during order processing. This keeps the customers happy by ensuring that the right order is shipped to them in the right condition. Moreover, automated order shipping notifications enhance the post-purchase experience for customers.

Types of technology to look for in a 3PL provider

Technology is crucial in ensuring seamless order fulfilment, but not all third-party logistics providers are harnessing its benefits. Therefore, ecommerce brands should ensure that the 3PL provider they partner with uses robust technologies. Here are some technologies that ecommerce brands should look for in a 3PL provider.

1. Ecommerce integrations

While selling online, ecommerce sellers usually have to log into a seller portal, create product listings and customise the settings according to their preferences manually. This process must be repeated for all sales channels, making it time-consuming and also creating room for errors. You need a system that synchronises data across all sales channels and reduces the scope of such errors while saving time.

As stated above, integration is essential, but integrating bulk data (inventory, orders, and returns) requires expertise that not all ecommerce brands have. Thus, the first technology you should look for in a 3PL is integration across multiple sales channels like Amazon, Flipkart, Myntra, Shopify, WooCommerce and more.

For instance, Eshopbox has 2-step integrations across marketplaces, shopping carts, and accounting software—allowing you to integrate within minutes. You can also use custom integration using developer-friendly APIs.

Eshopbox integrates multiple sales channels and shopping carts
Eshopbox integrates multiple sales channels

2. Warehouse Management System (WMS)

A Warehouse Management System (WMS) is a kind of software which contains a set of guidelines that govern the everyday functioning of an ecommerce warehouse. 3PLs should have a robust Warehouse Management System (WMS) for storing inventory, picking, packing, shipping orders, and managing the workforce.

For instance, Eshopbox has a robust Warehouse Management System (WMS) in place to ensure effective workforce management and streamlined order management with Standard Operating Procedures (SOPs).

A Warehouse Management System (WMS)
A Warehouse Management System (WMS)

3. Inventory Management System (IMS)

An Inventory Management System(IMS) is a set of software and hardware technology that allows you to track your inventory across the supply chain, from inventory levels in warehouses to when orders are shipped to customer locations for delivery.

An efficient Inventory Management System (IMS) helps ecommerce brands simplify inventory management by automating key business processes like keeping track of inventory levels. In addition, it reduces the risk of overselling and stock-outs by synchronising inventory and orders across all sales channels.

For instance, Eshopbox’s Inventory Management System (IMS) updates inventory in real-time. This includes instances when an order is placed when inventory is received at the fulfilment centre, when an order is shipped out and when a returned product is restocked.

  • Eshopbox updates inventory across multiple sales channels to ensure inventory accuracy. When a product is sold on one channel, inventory gets updated across all channels in real time.
  • Eshopbox provides inventory replenishment reminders to prevent stock-outs.
  • Eshopbox recommends ideal inventory placement based on historical sales, which ensures lower fulfilment costs.

4. Automated order fulfilment

Order fulfilment may seem easy, but it can be time-consuming and prone to errors. An automated order fulfilment process can increase the efficiency of ecommerce brands by shipping orders at lightning-fast speed through the use of technology such as barcode scanners, conveyer belts and smart robots.

For instance, Eshopbox has a robust automated fulfilment system.

  • When customers place orders on any sales channels, they are all complied in a single dashboard.
  • Orders are then allocated to the fulfilment centre closest to the customer, where they are picked, packed and shipped.
  • Eshopbox’s proprietary algorithm determines and uses the most cost-effective shipping method for ecommerce brands.

5. Seamless post-purchase experience

An ecommerce brand’s relationship with a customer does not end once an order is placed; in fact that’s just the beginning. Post-purchase experience is vital in maximising customer satisfaction. By delighting your customers, you can build loyalty—making them come back for repeated purchases. Technology helps create a good post-purchase experience.

According to research, 84% of companies that work towards improving their customer experience also report an increase in their revenue.

Here’s how Eshopbox ensures a good post-purchase experience:

  • With robust Standard Operating Procedures (SOPs) and an automated picking and packing process, Eshopbox ensures lightning-fast shipping with high order accuracy.
  • Ecommerce brands have the freedom to choose a custom packaging option so that they can delight their customers by creating an exceptional unboxing experience.
  • Automated order notifications are sent to customers at every step of the fulfilment process. For example, notifications are sent when an order is confirmed, shipped, sent out for delivery and delivered.
  • Real-time order tracking is available to customers 24/7.
  • Customers can re-schedule a delivery attempt or modify their delivery information without any assistance from the support team on the Eshopbox self-service customer portal.

Eshopbox with its technology and fulfilment expertise achieves high order accuracy, consistently. They bring in the agility required to adapt and deliver a great customer experience. It gives our customers a smooth ride from purchase through delivery and beyond.

- Kunal Sethi, General Manager - Ecommerce, Clarks

H&M sends proactive order notifications
H&M sends proactive order notifications

6. Profitable returns management

Returns are an inevitable part of every ecommerce business, but they don’t always have to be a hassle. A technologically advanced 3PL will have the right system to manage returns and effectively convert them into a revenue-driving source.

For instance, Eshopbox’s returns management system makes the process stress-free for both ecommerce sellers and customers.

  • Customers can easily initiate a return or an exchange on the Eshopbox customer portal for website orders.
  • Eshopbox helps customers find the right replacement with one-click exchanges.
  • Eshopbox’s return management system syncs returns across multiple sales channels, so ecommerce brands are notified when a return is initiated on any sales channel.
  • The return pick-up is automatically aligned with an upcoming order delivery in the same or nearby areas to make it cost-effective as you would not have to pay for return shipping.
  • Returned products go through a quality check and are restocked or refurbished according to their condition; this helps ecommerce brands recapture revenue.
  • Eshopbox’s tech-enabled fulfilment centres have dedicated return processing stations equipped with cameras to provide proof (image or video) for defective items.
  • Ecommerce brands can also raise claims on marketplaces with automated Claim Filing Reports (CFR) if the quality of the returned product is not up to the mark.

Returns management by Eshopbox
Returns management by Eshopbox

7. Automated payment reconciliation

While selling online, ecommerce brands must adhere to the guidelines of multiple marketplaces with unique fee structures. Moreover, shopping carts attract fees of payment gateways used on the website. Keeping track of all this data and updating it manually can make it prone to errors, but with an automated system for it, the process will become quick and efficient. A bonus tip is to choose a 3PL provider with an automatic payment reconciliation system in place.

For instance, Eshopbox automates payment reconciliations across sales channels and helps ecommerce brands keep track of the following:

  • Orders which have received payment
  • Orders which are awaiting payment
  • Orders for which payment is overdue

Summing up

Technology is the future of ecommerce, and brands that effectively utilise it will beat their competition. Thus, ecommerce brands need to partner with technologically savvy 3PLs like Eshopbox that provide robust warehouse management, inventory management, automated order fulfilment and returns management while ensuring a good post-purchase experience for customers.

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