[Step by Step] How Can I Leverage 3PL and xMS to Increase Revenue?
Future Commerce · with Nima Elyassi-Rad, Ryan Powell · June 4, 2021 · 45 min
Summary
To truly leverage shipping as a growth engine, ecommerce operators must move beyond basic label printing and strategically integrate third-party logistics (3PLs) and sophisticated shipping software (xMS). This episode clarifies the complex landscape of fulfillment partnerships, from 3PLs to 5PLs, offering practical advice on identifying the right solutions to scale operations, reduce costs, and enhance the post-purchase customer experience, ultimately impacting revenue.
Key takeaways
Understand the nuances between 3PL, 4PL, and even 5PL models to strategically select the right fulfillment partner that aligns with your business's scale and operational needs. A 3PL directly handles storage, picking, packing, and shipping, while 4PLs often integrate software to manage multiple 3PLs, and 5PLs provide a brand house model outsourcing to 4PLs.
Prioritize customer location when choosing a 3PL; proximity to your customer base is crucial for optimizing warehousing and shipping efficiency, even if it means utilizing multiple facilities.
Manage customer expectations realistically. If your infrastructure doesn't support 2-day delivery, avoid promising it. Transparency in shipping times builds trust and prevents dissatisfaction.
Utilize shipping software like Shippo as a 4PL to manage and optimize carrier relationships and shipping processes, even when using a 3PL. This provides a central layer of control and data that larger 3PLs might not offer for smaller brands.
Recognize that the post-purchase experience, driven by efficient and transparent shipping, is where the customer relationship truly solidifies. Treat shipping not as a cost center, but as a crucial growth driver that impacts customer willingness to buy online and ultimately, revenue.
In this season of Step by Step presented by Shippo, we ask the question, “How can leverage shipping as a growth engine for my business?” eCommerce isn’t so simple anymore. Merchants can’t just sit at home, slap a shipping label on a box and call it a day. It is much more complex than that. In this episode, Ryan Powell, SVP of eCommerce at Whiplash joins the show to chat about the details of how to increase revenue through shipping. We’ll give you practical tips, step by step.
What does this episode say about supply chain & operations?
Understand the nuances between 3PL, 4PL, and even 5PL models to strategically select the right fulfillment partner that aligns with your business's scale and operational needs. A 3PL directly handles storage, picking, packing, and shipping, while 4PLs often integrate software to manage multiple 3PLs, and 5PLs provide a brand house model outsourcing to 4PLs.
What does this episode say about finance & fundraising?
Prioritize customer location when choosing a 3PL; proximity to your customer base is crucial for optimizing warehousing and shipping efficiency, even if it means utilizing multiple facilities.
What does this episode say about customer retention?
Manage customer expectations realistically. If your infrastructure doesn't support 2-day delivery, avoid promising it. Transparency in shipping times builds trust and prevents dissatisfaction.
What does this episode say about supply chain & operations?
Utilize shipping software like Shippo as a 4PL to manage and optimize carrier relationships and shipping processes, even when using a 3PL. This provides a central layer of control and data that larger 3PLs might not offer for smaller brands.
What does this episode say about supply chain & operations?
Recognize that the post-purchase experience, driven by efficient and transparent shipping, is where the customer relationship truly solidifies. Treat shipping not as a cost center, but as a crucial growth driver that impacts customer willingness to buy online and ultimately, revenue.
