Why Ecommerce Brands Rely on 3PLs to Master Inventory Management?

3PL (Third Party Logistics) services bring the best out of online businesses by streamlining the fulfillment process and getting the items to the customers safely. And ideally, this is what a 3PL service is supposed to do, Right? What if there's more to it and you never really explored it to make the most of it. This blog will give you a way to explore how your 3PL partner is your inventory manager. The next few minutes of reading will let you know how your 3PL partner is also an inventory management expert.

Detailed  Breakdown of 3PL

3PL service providers are not just there for fulfillment and final shipment. They actually do a lot right before that.  So, here's a little breakdown of the services provided by 3PL partners to a business:

• ‍3PL providers receive and store the products in their storehouses such that the products re well organized, safe and easy to access when required.  
• As the products are stored with the logistics partner, the inventory is also managed by them. Many 3PL partners also take care of the optimal stock levels and alert the sellers regarding low inventory.
• Once, order is received by the seller, they further pass on the command to their 3PL partners who pick and pack the product to make safe and accurate delivery.
• Finally, the logistics take care of the shipment where the carrier takes the parcel to the final consumer for fulfillment.
• Their role does not end with just the shipment, they also take care of the returns or reverse logistics.

This very well explains that 3PL partners are not just for fulfillment, that take over a lot of tasks that otherwise have to be taken care of by the seller themselves. It actually plays a dominant role in making a business systematic and gives the owner time to focus on other important tasks.

What does Inventory Management include?

Inventory management is not simply counting products and listing them on a data sheet. It is a lot more complicated and includes a lot more than simple numbers on a sheet against products. Here's a little sneak peek into what all comes under inventory management:

1. Categorization and Classification 

Products need to be classified and categorized in certain groups based on sales volume, demand patterns and product characteristics. Also, sellers can do that on the basis of perishing time, season, product value so that they know what to stock and when should the same go out.

2. Inventory Policies 

Sellers must establish rules according to lead times, reorder points, and safety stock levels. Safety stock is a type of buffer inventory that guarantees sellers can manage unforeseen supply chain interruptions or variations in demand. In order to prevent stock outs, reorder points assist in determining the inventory level at which sellers should replenish products.

3. Inventory Tracking 

Inventory tracking can be done manually but the most post popular way of doing the same is through software. They can give seller the idea of real-time visibility into stock levels and also give them alerts regarding low stock value for restocking. It is the best way to reduce manual error and acceleration of the process.

4. Demand Forecasting 

Inventory levels depend on demand, and demand can be forecasted with a simple study of trends and seasonal fluctuation. Demand forecasting is something that allows a seller to predict demand for future so that they can optimize inventory levels, minimize the risk of overstocking or understocking also ensuring timely availability of the product.

5. Fulfillment Optimization and Warehouse Operations 

Warehouse management systems allow the seller to streamline selecting, packaging, and shipping. Bardcodes and RFID technologies pair up to improve inventory accuracy and facilitate quicker order processing. In addition to this, the fulfillment time can be reduced with the help of effective picking and packaging strategies.

3PLs for Inventory Management  Sums Up All

Inventory management might seem a bit heavy after reading all the points above. But this blog is not to increase your stress but to shake it off. So, here's the thing, 3PL can easily do all the above mentioned tasks for you and take care of inventory management tasks like a pro. Here's how:

1. Low Expenditure, High Returns 

Third-party logistics service providers have the required infrastructure, personnel, and technology in place, they can divide those expenses among several customers and give sellers a lot more economical option rather than one bearing all these expenses themselves. This is particularly advantageous if inventory demands change because sellers will only be charged for the space and services you actually use. Additionally, outsourcing might assist in avoiding financial commitments to surplus inventory. 3PLs can assist you in keeping the ideal quantity of inventory, which will lower storage costs and improve your cash flow.

2. Expert Handling Means  No Deflection from Core Business 

While the experts of 3PL service providers manage the back-end responsibilities, the sellers can stress on the core business activities like marketing, advertising and customer interaction. 3PL will not just give the seller free time but also allow them to have time for smoothening the order management and fulfillment process.

3. Advanced Technology Helps The Business Grow  

Sellers can immediately access state-of-the-art technologies like automated inventory management systems, real-time tracking, and even predictive analytics by outsourcing to a 3PL that already uses these systems. These tools are all included in the price of third-party assistance. These digital helping hands helps the sellers to increase the efficiency of the inventory operation and meet demand without experiencing stockouts or overstocking.

4. Bringing Happy Customer Feedback  

Delivery is the key to success of an ecommerce business. Delivering products timely and precisely is essential to keeping the clients satisfied, and a trustworthy 3PL can assist sellers in doing so. The service providers are armed with know-how to handle fulfillment with high precision and speed, which reduces errors and delays in shipping goods to the clients.

5. Risk Mitigation 

Risks associated with inventory management include logistical snags and regulatory problems. Many of these risks can be transferred to your provider through outsourcing. In addition to having insurance and backup plans, they frequently have a wider network that enables them to adjust in the event of a supply chain interruption quickly or natural disaster. Additionally, because 3PLs are used to managing intricate compliance requirements, they will guarantee that the inventory procedures adhere to industry standards without requiring you to invest resources in keeping an eye on regulatory changes. Seller can concentrate on expanding your business with the assurance that risks are being expertly controlled.

6. Say Bye Bye to Inventory Shrinkage 

Sellers lose money when inventory is mismanaged or under counted. Tracking inventory shrinkage includes losses due to theft, damage, or misplacement. They can significantly reduce profitability. One way to reduce these losses is by outsourcing. In addition to training their staff to handle inventory precisely, 3PLs employ sophisticated tracking systems and security measures to stop shrinkage. Sellers are more likely to maintain healthy margins and lose less stock if they have a good inventory management system in place. In addition to protecting your bottom line, this results in more accurate inventory counts for improved planning and forecasting.

Be the Witness While 3PL Helps Your Business Grow 

By now you must be convinced that 3PL service provider can do a lot for you and your business. It can actually do a lot more than you can imagine. This blog is your que to partnering with a 3PL provider right now so that your business can experience growth and you focus on better things for expansion. But managing all these different applications, sales platforms together can be tiring and confusing. Also, manual entries in different places can cause confusion and chaos.

Since, we are here to get a solution, let's get a solution to this problem as well. You can simple bring all your sales channels, 3PL providers together on an centralized dashboard through MapMyChannel integration application. It works as a multichannel order management system that streamlined the entire process from order receiving to final order fulfillment. Also, it functions as multi-channel inventory management system solving the biggest issue discussed all this while. It will come as a package that deal that will help with product listing, bundling, notification tracking and shipment.