For businesses wondering what 3PL is, the answer is simple: 3PL, or third-party logistics, is the practice of outsourcing logistics operations to an outside provider. As order volume grows, handling these processes in-house can become more complicated, particularly for smaller teams without their own warehouse. By partnering with a 3PL, businesses can fulfill more orders without building out an entire logistics operation.
This article explains when a 3PL may be the right choice, what businesses should consider before switching, and how to simplify the process with an inventory control and order management platform.
Integration should be an important part of evaluating any 3PL. Order, inventory, and fulfillment data need to move reliably between systems. With Order Time’s Open REST API, information flows between the 3PL and other systems with less manual intervention.
Before setting up the connection, businesses should determine what data needs to move between the two systems, such as sales orders, inventory levels, shipping details, and fulfillment updates. With the right integration in place, Order Time can serve as a centralized platform for managing inventory and orders while connecting with outside platforms and fulfillment locations.
Adding a 3PL creates new handoffs between the business and an outside fulfillment team, making reliable workflow triggers essential. Order Time uses document statuses to track transactions through different stages. Each logical point triggers the next step in the fulfillment process. Its webhook functionality can automatically send data to a hosted endpoint when an alert is triggered. Together, these capabilities reduce the need for employees to manually relay every update between systems.
For smaller but growing businesses, it may not make sense to invest in a warehouse even though order volume is increasing. A 3PL offers an alternative by providing the space, staff, and fulfillment infrastructure needed to handle orders without building an internal warehouse operation.
However, outsourcing fulfillment does not eliminate the need to know what inventory is available, which orders need attention, and what has already shipped. A 3PL can serve as the management layer that keeps inventory and order information centralized. As a result, businesses maintain complete visibility into their operations while the 3PL handles the physical movement of products.
Signs it may be time to consider a 3PL include:
When inventory is stored and managed by a 3PL, businesses still need a way to monitor their stock levels and verify that the numbers being reported are accurate. While 3PL providers are generally trustworthy, discrepancies can happen, whether due to damaged or misplaced inventory, counting errors, or inventory being incorrectly allocated.
Order Time's multiple Locations feature allows businesses to set up physical or virtual locations to track inventory across their operation, including inventory stored at a 3PL. Businesses can record inventory received or transferred to the 3PL location in Order Time, while fulfillment processed through the API can automatically reduce inventory as orders are shipped.
This gives businesses an independent view of the inventory they expect to have at their 3PL. When the 3PL provides weekly or monthly inventory counts, businesses can compare those numbers against the inventory recorded in Order Time. Order Time's reporting functionality can then help identify and investigate discrepancies.
For businesses working with a 3PL, this added visibility can make it easier to catch inventory mismatches and understand where discrepancies are occurring before they become larger problems.
Understanding what a 3PL is and how it fits into a growing operation is the first step toward deciding whether outsourcing fulfillment makes sense. A 3PL can help businesses keep orders, inventory, and fulfillment processes connected without building their own logistics or warehousing infrastructure.
With a platform like Order Time, businesses gain centralized inventory and order management that supports a more connected and efficient operation at scale. Learn more about how to maintain visibility and control with Order Time.