6 Things a Great 3PL Partner Will Do for E-commerce Retailers
By Patrick Allard, EVP, Chief Sales Officer, Radial
It takes a complex ecosystem to succeed in e-commerce. Everyone in the supply chain has a critical role to deliver on consumer expectations. Order fulfillment and transportation management are both table stakes — yet every e-commerce retailer needs to determine whether to build and maintain those functions in-house, or outsource them to a third party logistics provider (3PL).
What makes a successful e-commerce business? Great products, a streamlined online shopping experience, reliable suppliers, orchestrated order fulfillment, dependable shipping carriers, a functioning returns process, payment and fraud solutions, and accessible customer care. Integrated cloud-based technology that gives real-time visibility into the complete supply chain. Good marketing, management, and coordination. All necessary. However, the one thing that underlies all of these factors is relationships.
No matter how automated parts of the ecosystem are, your business relies on relationships with vendors and providers, and the people that run them. Understanding what makes a healthy relationship with your 3PL can go a long way to building a resilient, thriving e-commerce business.
We’re going to assume that the 3PL’s experience, tenure in the industry, reputation, proven performance, scalability, infrastructure, technology, and clientele are all factors that have been weighed carefully. Let’s look at factors that can significantly impact a 3PL relationship:
- Partnership Mindset. There’s a difference between 3PLs that take a vendor (and thus transactional approach) and those that have a partnership mindset. Partnership implies mutual support and vested interest in each other’s success — which lays the foundation for a symbiotic relationship that can get stronger and more beneficial over time.
- Prioritizes Continual Communication. Clear, ongoing communication and aligned expectations are critical to a successful 3PL partnership. Both sides must regularly revisit expectations, ensuring everyone is informed. 3PLs need a clear understanding of the brand experience, while marketing, sales, and forecasting teams must keep them updated to plan and scale effectively.
- Improves Your Forecasting. Most retailers struggle with forecasting, especially at peak, and this can drive major challenges between a 3PL and the retailer. Lack of communication and headlights into decisions the retailer is taking to drive sales and promotions can quickly develop into operational challenges. Operational challenges will quickly become consumer experience issues and cost challenges for all parties.
A strong 3PL partner supports better forecasting by aligning with the retailer’s marketing and e-commerce teams early and introducing AI and machine learning into the process. This improves communication and enables the 3PL to plan labour, secure transportation, and deliver on customer expectations during peak season.
- Seeks to Add Value. A strong 3PL partner goes beyond SLAs to add real value. By understanding both current operations and challenges, they identify ways to boost efficiency and customer experience—whether through automation during peak demand or improvements in transportation management.
Many retailers are contracted with one shipping carrier, but this can limit the retailer’s ability to deliver on CX. A 3PL can bring additional value by having a more sophisticated transportation management solution that leverages multi-carriers, speed, and cost to help the retailer grow sales and improve CX from click to delivery.
Radial Europe, Automation at the Groningen fulfillment site, Netherlands
- Uses Technology to Support People. Automation and AI are transforming retail and 3PL operations. While some adopt robotics without considering people, strong 3PLs use technology to upskill employees, shifting them from repetitive tasks to higher-value roles—like personalizing final packout for added customer value.
A 3PL should also implement and leverage advanced technology that can integrate with the retailer’s and supply chain’s systems. Data needs to flow seamlessly everywhere it’s needed to achieve a positive consumer experience. If the retailer’s technology is not capable of integrating with the 3PLs, a good 3PL partner will have technology solutions that can bridge that gap. Additionally, a 3PL will be consistently working to scale their technology and stress test it to ensure they can scale during peak demands. - Expands Your Market Reach. In addition to being able to scale to meet peak demands, a great 3PL partner will help the retailer expand their capabilities to reach more customers or serve new markets. Most 3PL providers specialize in direct to consumer (DTC) order fulfillment. Relatively few, (Radial does) can manage both business to business (B2B) and DTC. Many retailers need B2B order fulfillment and finding a partner that can offer both can help them move into more market segments. There is value in partnering with a 3PL that has the solutions and experience to reach emerging markets and replicate the same consumer experience across the globe.
Retailers should look for a 3PL with a proven track record of partnership, that has a broad network of customers to draw learnings and data from to help every retail customer improve best practices, and that delivers comprehensive solutions that simplify, support, and deliver the brand experience the retailer envisions for consumers. Radial serves more than 200 e-commerce retailers with a strong infrastructure, with such services as multi-carrier transportation network, omnichannel technology and fulfillment.
Patrick Allard Executive Vice President and Chief Sales Officer
As Executive Vice President and Chief Sales Officer, Patrick Allard is responsible for the company’s new business development.
