How to Manage Inventory Through 3PL Fulfillment

September 20, 2022 470 views No Comments 5 Shares
3pl fulfillment

A third-party logistics provider (3PL) can help take your business to the next level by handling inventory management for you. This post will give a high-level overview of how 3PLs manage inventory so you can make an informed decision about whether or not using one is right for your business.

How Do Inventory Management Systems Work?

One of the first things a 3PL will do is set up an inventory management system (IMS). This system will be used to track your inventory as it comes in, is stored, and ships out again. There are several benefits to using an IMS:

  • You’ll always know what you have in stock and where it is. This is especially important if you have multiple warehouses or locations.
  • You can avoid stockouts and overselling. Nothing frustrates customers more than not being able to purchase a product they want because it’s out of stock. An IMS ensures that doesn’t happen by giving you real-time visibility into your inventory levels.
  • You can streamline your operations. By knowing what you have in stock and where it is, you can save time and money by having your products shipped from the location that makes the most sense.

A good IMS will also allow you to see historical data so you can make informed decisions about future orders.

Receiving the Inventory

Once your IMS is up and running, your 3PL will start receiving inventory from suppliers on your behalf. They will inspect all incoming shipments to ensure there’s no damage and that the correct products were delivered. They will then update the IMS accordingly so you always know what’s been received and when. When new inventory comes in, it will be stored in the 3PL’s warehouse (or warehouses) until it’s needed.

Storing the Inventory

The 3PL fulfillment process also includes storing your inventory in their warehouses. They will put processes and procedures in place to ensure that all of your products are stored safely and securely until they’re needed. You can rest assured knowing that your products are in good hands and won’t be damaged while they’re being stored. They will also be responsible for keeping track of inventory levels and ensuring that products are rotated so that the oldest products are used first.

Processing Orders

When an order comes in, whether it’s through your website or another sales channel, your 3PL will process it quickly and efficiently.

Picking & Packing

In most cases, orders will be picked and packed by hand to ensure accuracy. They will pick the products from their shelves and get them ready for shipping. Your 3PL will have staff specifically trained in how to pick and pack orders quickly and correctly so nothing gets lost or damaged in the process. In some cases, they also package the products themselves before sending them out to customers.


Once everything has been picked and packed, it’ll be shipped out to the customer via the shipping method of your choice. You’ll never have to worry about whether or not an order went out on time because the 3PL fulfillment process takes care of everything for you. Imagine trying to ship out orders yourself! It would be a nightmare. But with 3PL fulfillment, it’s all taken care of quickly and efficiently.

The IMS will be updated throughout the process so you can track your orders from start to finish. You’ll always know where they are and when they were shipped.

Tracking & Reporting

Your 3PL will also track all of your inventory and orders so you can see what’s selling, what’s not, and where you need to make changes. This data is important for making informed decisions about your business. They will also generate regular reports so you can see how your business is performing and where there are opportunities for improvement.


Inventory management can be extraordinarily complex and time-consuming. It’s hard to think back to times when such systems didn’t even exist.

But as you can see now, there are many benefits to using a 3PL for inventory management. If you’re looking for a company to partner with, be sure to ask about their IMS, receiving process, storage procedures, order processing times, picking & packing methods, and shipping procedures.

At Spectra, we have a team of experts who would be more than happy to chat with you about your specific needs.

Therefore, if you have any other questions about how a 3PL order fulfillment company could benefit your business, contact Spectra today for a free quote!

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