So how much difference does a single digit make? In the case of 3PL and 4PL, the answer can have a significant impact on your choice of fulfillment company. Here’s a look at what this means for your business.
What is a 3PL?
A third-party logistics provider, also referred to as 3PL, is a valuable solution for many eComm businesses. A 3PL handles some or all of your company’s shipping needs, such as transportation and information technology (IT).
Benefits of a 3PL
- As an entrepreneur, you understand the business side. 3PLs have extensive experience with supply chain logistics, which frees you up to focus on the main goal of growing sales.
- Supply chain functions are costly in terms of time, space and labor. When you partner with a fulfillment company, they provide these elements for a fraction of the price you would pay if you did everything on your own.
- The needs of an eComm business can vary from year to year, and even from season to season. A 3PL can scale their services to accommodate seasonal spikes, market fluctuations and company growth.
Do you need a 4PL?
A 4PL, or fourth-party logistics provider, adds another layer to the operations of a 3PL. While a 3PL executes supply chain activities, a 4PL goes a step further by taking charge of overall supply chain management.
If you want to take a complete hands-off position with your supply chain operation, a 4PL can be a great option. The 4PL will work with your 3PL, including fulfillment warehouse and carriers, creating a centralized contact that enables strong communication and smooth procedures from start to finish.
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