How 3PLs can unlock new revenue with value-added services

Embracing value added services for 3PL profitability

Operating a 3PL has never been easy, and now customers demand more than just affordable and efficient shipping—they want a company that offers plenty of customization options. 3PLs face the dual challenge of thinning profit margins and an increased need to differentiate themselves from competitors.

Maintaining a competitive edge in modern ecommerce logistics requires more than the traditional 3PL model. Expanding value-added services (VAS) helps open new revenue streams and deepen customer relationships. But it also increases operational complexity beyond traditional warehouse management systems (WMS).

Advanced systems use sophisticated 3PL software that makes it easier than ever to stay on top of supply chain efficiency and shipping data while adding new VAS.

Why growth-minded 3PLs are going beyond core logistics with value-added services

Brands have many 3PLs to choose from, each offering fast and affordable service. To stand out, you need to offer value beyond the basics.

Responding to market demands and client needs

Ecommerce has come a long way, and so have customer expectations. Consumers want faster shipping and multiple customization options. Merchants want a 3PL that can offer end-to-end solutions and allow them to provide consumers with the personalization they expect.

Offering the VAS your clients need leads to stickier relationships with those who are looking for quality, not just the lowest cost.

Enhancing competitive advantage

Premium clients need specialized services—and they’re willing to pay a premium price to get them. Increasing your VAS helps you stand out from other 3PLs that only offer standard services. VAS also attract more discerning customers, reducing your client churn.

Capitalizing on untapped revenue potential

Adding VAS allows your 3PL to perform services that clients may have done themselves or outsourced elsewhere. You already have the staff, facilities, and logistics know-how. VAS help you leverage those key assets into revenue diversification.

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Spotlight on high-value services: Returns management and custom packaging

Two services are especially lucrative for 3PLs: reverse logistics and custom packaging.

Returns management: Turning a cost center into a revenue stream

With a little effort, you can turn reverse logistics management from a money-losing proposition to a reliable revenue stream.

The growing challenge of ecommerce returns

Consumers demand fast and easy returns, and they’ll take their money elsewhere if a business can’t offer them. As a result, retailers and 3PLs are managing complex and expensive reverse logistics for an increasing number of ecommerce returns.

How 3PLs can offer premium returns services

Creating dedicated returns processing areas is one way to meet the reverse logistics challenge. Streamlined receiving, inspection, and disposition processes make it easy to restock, repair, or recycle the products that come in.

3PLs can take the next step by offering VAS for returns, such as packaging for resale or performing minor repairs. An advanced WMS makes it easier with real-time visibility into each return, and AI that can optimize processing and identify trends.

Monetizing returns management

Building your return capabilities offers direct benefits to your bottom line. In addition to charging per-item processing fees and storage for returned items, you can also make money by offering expedited service and specialized handling.

Custom packaging to elevate brand experience and drive revenue

Consumers expect more from ecommerce packaging, and retailers want to deliver a consistent brand experience. This opens opportunities for a 3PL willing to expand its custom packaging offerings.

The power of branded and specialized packaging

Ecommerce customers are looking for unboxing experiences, not just packaged products. Thoughtful packaging and protection for fragile items help retailers build both customer loyalty and brand value. 3PLs can help by expanding their packaging capabilities.

3PL capabilities in custom packaging

Custom packaging options are almost limitless. 3PLs can offer branded boxes and polybags, custom inserts and labels, and eye-catching promotional materials. They can even offer specialized dunnage and protective packaging for fragile items.

Monetizing custom packaging services

Premium packaging commands premium pricing, which helps your bottom line. Tiered pricing for custom packaging jobs provides reliable income, as do services like kitting.

Custom packaging services require you to keep specialized materials on hand and plan for higher labor costs. Without proper warehouse management support, higher costs can eat at your profit margin.

How an advanced WMS like Logiwa IO powers value-added services

Advanced warehousing and technology-enabled WMS make it easy for 3PLs to implement VAS and increase their earnings.

Beyond basic inventory: WMS as a strategic asset

A traditional WMS is built for volume and speed, but it may struggle to keep up in an age of customization and premium shopping experiences. Today’s organizations need WMS that are integrated with existing processes and software, can grow along with your business, and flexible enough to keep up as your priorities shift.

Logiwa IO is built for advanced fulfillment

Logiwa IO harnesses the latest technology to provide algorithm-driven solutions tailored to your business’s needs. Our cloud-based software gives you access to real-time stats on inventory, shipping, and more.

Logiwa IO features driving new revenue streams

Logiwa IO helps you do the basics better, but it opens the door to new VAS revenue streams for your business.

Seamless kitting and assembly

With Logiwa IO capabilities, it’s easier than ever to build kits. Whether you choose on-demand kitting or prefer to kit to stock, our WMS keeps track of components and stock for better inventory management. Custom bundles, gift sets, even subscription boxes—we can help you do it all.

Integrated returns management model

Our WMS automates return workflows, facilitating rapid inspection and disposition and making return merchandise authorizations easier than ever. Our system also provides clients with better data analytics on reasons for return, analyzing trends, and opening up opportunities.

Advanced inventory management and optimization

More customization means more SKUs and variations to keep track of, but Logiwa IO keeps it all under control. Our advanced inventory management helps you optimize your warehouse space for both standard and custom-packed goods, improving pick-and-pack efficiency, even for complex orders.

Data analytics and reporting for value creation

Our data analytics help you provide clients with granular fulfillment data that help explain trends and provide actionable insights on shipping bottlenecks, packaging costs, and more. Providing this data offers clients what they need and shows your worth as a 3PL.

Seizing the future of 3PL profitability

Growth-minded 3PLs need to build their VAS capacity and diversify their revenue. No single step makes that easier than using a powerful WMS such as Logiwa IO. We can help build your 3PL value-added services revenue while improving overall efficiency and profit margins. 

3PLs that adapt and expand their offerings will be the ones that thrive in the future. Schedule a demo to see how Logiwa can empower you to fulfill brilliantly.

FAQs on 3PL value added services