E-commerce fulfillment and third-party logistics (3PL) are two different approaches to managing the supply chain for online businesses. E-commerce fulfillment involves handling and shipping orders directly to customers from the retailer's warehouse, while 3PL is a logistics service that manages shipping, warehousing, and distribution on behalf of the retailer. E-commerce fulfillment is more cost-effective for small to medium-sized businesses, while 3PL is more suited for larger businesses. The choice between the two depends on the specific needs and resources of the retailer.

3. E-Commerce Fulfillment 3PL (Third-Party Logistics)
Manages fulfillment process for online orders Outsourced logistics and supply chain services
Order processing, packaging, and shipping
Transportation, warehousing, inventory management,
order fulfillment, and additional value-added services
Dedicated e-commerce fulfillment center or warehouse
with integrated technology and skilled staff
Network of warehouses, distribution centers,
transportation assets, and technology platforms
Flexible and scalable for online businesses
Scalable and flexible by leveraging existing infrastructure
and resources
Costs include warehousing, packaging, labor, shipping,
and technology infrastructure
Fees based on services rendered, including storage, pick-
and-pack, transportation, and value-added services

4. Step Description
1. Order Placement
Customers select products and complete the
checkout.
2. Order Processed Order details captured and verified.
3. Inventory Checked
Real-time inventory levels checked for product
availability.
4. Order Confirmed Confirmation sent to customers.
5. Warehouse Prep Fulfillment center prepares for order fulfillment.
6. Order Picked Products picked from warehouse shelves or bins.
7. Order Packed Products securely packaged for shipping.
8. Shipping & Delivery Package handed to shipping carrier for delivery.
9. Order Tracking Customers provided with tracking information.
10. Customer Support Assistance provided for inquiries or issues.
• How E-commerce
Fulfillment works

5. Advantages Disadvantages
1. Control and Flexibility: More control over
processes, customization, and adaptability to
changing needs.
1. Higher Initial Investment: Requires
investment in infrastructure, technology, and
skilled labor.
2. Brand Experience: Directly manage customer
experience, packaging, and branding.
2. Limited Scalability: Challenges to scale
quickly during peak seasons or sudden growth.
3. Cost Management: Potential cost savings
over time, especially for high-volume
businesses.
3. Operational Complexity: Managing multiple
aspects, including warehousing, staffing, and
logistics.
4. Data and Insights: Access to real-time data
and insights on inventory, customer behavior,
and order fulfillment.
4. Risk and Liabilities: Responsibility for any
operational issues, inventory management
errors, or returns.
5. Customer Communication: Direct interaction
with customers for order updates, inquiries, and
problem resolution.
5. Expertise and Efficiency: Challenges to
match the expertise and efficiency of
specialized fulfillment providers.
6. Integration and Control: Seamless integration
with internal systems, ERP, and e-commerce
platforms.
6. Time and Resources: Requires dedicated
focus and resources, potentially diverting
attention from core business activities.

6. Company Industry
Amazon E-commerce
Shopify E-commerce platform
Warby Parker Eyewear
Glossier Beauty
Harry's Men's grooming
Chewy Pet supplies

7. A business contracts with a 3PL provider to handle their
logistics operations. The 3PL provider takes care of tasks
such as shipping, receiving, and storage of goods, as well
as managing inventory levels and handling returns. The
business benefits from the expertise and resources of the
3PL provider, allowing them to focus on their core
operations. The 3PL provider may also offer cost savings
through economies of scale and streamlined operations.
Communication and collaboration between the business
and the 3PL provider is crucial for effective logistics
management.
• How 3PL works

8. Advantages Disadvantages
No need to invest in warehouse space or
equipment
Less control over the fulfillment process
Access to advanced technology and
expertise
Potential communication and
coordination issues with the 3PL
provider
Ability to scale up or down quickly
based on demand
Higher shipping and handling fees
Reduced labor and staffing requirements Potential for errors or delays in the
fulfillment process
Opportunity to focus on core business
activities
Dependence on the 3PL provider's
performance and reliability
Lower upfront costs and financial risks Limited ability to customize packaging
and branding

9. Company Switched from Switched to
Google In-house fulfillment 3PL
Birchbox In-house fulfillment 3PL
ModCloth In-house fulfillment 3PL
Warby Parker In-house fulfillment 3PL
Target In-house fulfillment 3PL
Zulily 3PL In-house fulfillment
Patagonia 3PL In-house fulfillment
Glossier 3PL In-house fulfillment
Bonobos 3PL In-house fulfillment
Wayfair 3PL In-house fulfillment

10. Cost Control Scalability Customer
Experience
In-house Higher upfront
costs for
warehouse
space,
equipment,
and staffing,
but potential
cost savings on
shipping and
handling fees
More control
over the
fulfillment
process,
including
customization
of packaging
and branding
Limited
scalability due
to warehouse
space
constraints and
potential
inventory
management
issues
3PL Lower upfront
costs and
Less control
over the
Greater
scalability,

11. sales@sdgloballogistics.com
9354898033
https://sdgloballogistics.com/