25
Jan

The Profitable Partnership: The 3PL Relationship

Grow your ecommerce business today by leveraging a third-party logistics company

Finding the right business strategy and partnerships can be difficult, especially in the competitive market Amazon presents to entrepreneurs. Strategies come in a wide range of options, from product specialization to product bundling along with optimizing listings and gaining a market share from properly placed advertisements. Because the market power on Amazon is limited, the greatest opportunity to raise profit margins is through expense control. One way of competing with higher profit margins is to leverage a third-party logistics (3PL) provider, which allows you to focus on your business growth while streamlining the logistics process and reducing fixed costs.

By creating a partnership with a third-party logistics company, you can outsource tedious and time-consuming tasks, such as finding low-cost freight quotes, customs paperwork, prep and inspection work, and even Amazon listing optimization. Without such tasks on your plate, you can focus and strategize on where to take your brand and product line next. A partnership of this caliber will provide beginners with support and knowledge while also assisting the most advanced of sellers to reach their peak performance. With the support of a third-party logistics company, the increase in volume and scope of work is reduced, along with the elimination of the overhead costs involved in expanding a business.

Take Advantage of Partnerships 3PLs Have Built

Third party logistics companies have substantial partnerships within the shipping and customs industry that aim to optimize transit time and customs processing, and incorporate efficiencies that save time and money without missing a beat in the process. Through years of experience, 3PLs work to perfect the logistics process for Amazon sellers and create systems that avoid costly mistakes.

Flexibility is Key

The greatest advantages Amazon-focused third-party logistics companies offer is their flexible and customizable services in the logistics process. With the ability to implement any service at any point in the supply chain, clients can minimize the costs of every aspect. Through a 3PL company, you can reduce the cost of shipping, cost of prep work, cost of storage, and cost of unplanned prep due to missed Amazon regulations and rules. Third-party logistics companies that focus on Amazon sellers have extensive knowledge and experience in the processes Amazon sellers go through and have perfected the process with innovative partnerships and systems.

Eliminate Issues with Your Amazon Seller Account

A beneficial business strategy is to arrange FBA compliance work through a third-party logistics company. Sending inventory to Amazon FBA that does not meet the FBA regulations will result in penalties against your Amazon seller account. The inventory can be prepped at Amazon’s FBA fulfillment centers or the inventory can be retracted through a removal order, both of which are costly and time consuming. Through a 3PL partnership, you can inspect your inventory prior to sending it to Amazon, ensure your goods were manufactured as your supplier said they would be, check for damage from shipping, and handle any necessary prep work to ensure FBA compliance.

Reduce Storage Costs to Increase Profit

Optimizing the storage process and reduce the costs can also be arranged through your third-party logistics partner. Most Amazon sellers send their entire inventory into Amazon’s FBA warehouses to be stored until their goods are sold out. Amazon’s storage rates are approximately $615/month per container which is about 40% higher than most 3PL storage rates. By having your 3PL periodically trickle inventory into Amazon when it needs replenishment, you can drive down your overall costs for storage fees and ensure that you have the optimal amount of inventory at Amazon’s fulfillment center to keep your sales on track.

Utilize Third-Party Fulfillment to Diversify Your Business

Some third-party logistics partners can provide you with the opportunity to diversify your ecommerce business through integration of product fulfillment services to multiple ecommerce platforms. Through third-party fulfillment you can reach a larger audience by widening the platforms for your product listing. Most 3PL companies that offer fulfillment can handle fulfillment for almost all major platforms, such as eBay, Walmart.com, Jet, Etsy, Shopify, and more. Expanding to multiple platforms expands your brand recognition, product exposure, and ultimately your sales.

In order to thrive in this industry, you must use your time as efficiently as possible and outsource the parts of your business that make sense. Use partnerships to drive down costs and grow your profit margins. Consider your strengths and weaknesses, where you want to spend time and money, and where you can make changes to ultimately increase your bottom line as a business owner. Especially as you scale, utilizing partnerships across your supply chain may really make sense for you and your growing business.

 

About FBAforward

FBAforward was created with the goal of simplifying the logistics process for Amazon sellers so they can focus on driving revenue. We are always operating in our client’s best interest and work endlessly to provide the best possible options and rates. We recognize the opportunities that our clients see in outsourcing and we are more than happy to arrange and handle any business process needed to optimize their profit margins. We at FBAforward pride ourselves in being experts in the Amazon logistics process. By offering services from start to finish we apply the needed services to cater to our client’s needs, including but not limited to inspections in China, international shipping, customs clearance, U.S. trucking, Amazon compliance, FBA prep, U.S. inspections, product testing, third-party fulfillment, and more. Contact us for a free consultation at support@fbaforward.com.

 

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