Posted on September 20, 2022 by Dennis Salazar

E-Commerce Brand Owners and their Love/Hate Relationship With 3PL Companies

We rarely work directly with 3PL companies, but most of our customers do since very few do their own stocking, picking, packaging and shipping. Our customers are experts at marketing, e-commerce, and sourcing, but they wisely choose to leave fulfillment to better equipped and qualified 3PL companies.

What is an E-commerce 3PL?

3PL stands for “third party logistics”. Other names for this type of service providers are co-packers, contract packers, fulfillment companies, and logistic warehouses.

The benefit of using one of these service providers is that our brand owner customers can stay focused on what they do best and do not have to spend precious time and money on warehousing, personnel, equipment and software.

The disadvantages include storage cost when a product does not sell, and handling cost when a product does sell. In other words, our clients and customers pay dearly for this necessary service that they themselves are not able or willing to do.

Common Problems Working with a 3PL

Our customers’ most common complaint after cost, is loss of control. How quickly can a new customer order ship? Are the orders picked correctly? Are they packed so they arrive undamaged?

When are products and packaging received? How are they stored, and who is responsible when pallets of products and packaging simply disappear?

In fairness, missing items are usually temporarily lost and found later within what can be a huge warehouse storage area.

How Salazar Packaging Helps Customers and Clients

We have been doing this long enough to know what our customers AND their 3PL service providers want and need. It begins with packaging delivered on time, as well as clearly marked and labeled. It also must be palletized correctly to minimize handling and restacking before it is stored in the correct place.

Our greatest contribution occurs during the design phase. We understand how the 3PL charges our customers for just about anything that requires additional time to assemble and use. With the shortage of labor, the higher additional cost is well justified.

We strive for an amazing unboxing experience. However, if an attractive design takes excessive time for a packer to assemble, that packaging cost savings can quickly be offset by a higher labor cost from the 3PL. Many packaging designers don’t get that and are almost totally focused on how a design looks, not on what the 3-PL will charge to process it.

Minimizing the number of packaging components can be challenging, especially when our customer’s product line includes a variety of individual items and an endless number of potential order combinations. So, creating multifunction packaging components saves our customers money on the packaging itself, but possibly even more on the storage and assembly of those packaging combinations.

Reducing Your Overall E-commerce Packaging Costs

Our goal is to always produce our DTC packaging at the lowest possible cost. However, an attractive, competitive price is just where our cost reduction efforts begin.

For example, shipping cost is always a concern, not just from you to your customer, but also from our factory to your 3PL. With today’s high transportation costs, we make every effort to maximize your cubic space on a truck and manufacture at our closest plant to your 3PL.

Guiding you in terms of how you purchase as well as when you purchase your packaging is another way we can help you produce savings. A 2,000-box order of custom printed die-cut mailer boxes can save you 20% compared to ordering 1,000 boxes. Avoiding placing orders in the 4^th quarter when all plants are at their busiest can help you minimize lead times and price per unit.