A 3pl provider looks after operational logistics, taking care of everything from warehousing to delivery and allows business owners to outsource the logistics side of their business, allowing them to focus on core business activities. A 3pl provider provides many different services which relate to logistics and the supply chain. They may look after transportation, warehousing, picking and packing, ordering, inventory management, packaging and freight management and delivery. There are a lot of benefits for businesses that choose to use an outsourcing solution.
What are the benefits of a 3pl provider?
Using a third-party can be hugely beneficial for businesses. By handing over the management of logistics, businesses can free up a great deal of money to focus on their main activities or other areas like marketing and new product developments. Logistics can be massively time-consuming, so by leaving it the experts businesses can improve efficiency. Other advantages may include cost reductions. A 3pl provider can leverage their relationships with big freight or delivery companies to reduce costs and negotiate good prices due to economies of scale. Using a 3pl company can also help to improve profits for businesses as it gives them more room to grow and innovate.
Working with a 3pl provider can also be great for businesses that need to scale up or down at different times of the year due to seasonal fluctuations. Outsourcing logistics means that things can be scaled up or down depending on your needs, without having to commit a lot of capital to establish the logistics infrastructure required for the busiest time of the year.
A third-party can also help to provide a better experience for customers which is very important as nowadays customers often expect same day or next day shipping. Using a third party logistics manager means that faster shipping is possible.
Third-party providers can also make it possible for businesses to test out their products in new markets, without the need for investment in warehousing and logistics infrastructure. A 3pl provider is also useful for mitigating risk and take on the responsibility for fulfilling orders and managing delivery delays and other issues.
Another benefit is that third-party providers are often experts in their field and have the knowledge and expertise to keep things running smoothly whilst the business-owners focus on their main business functions.
Another benefit for businesses that work in international markets is that they understand international logistics and can help to manage any problems with documentation, custom duties or border issues.
It is worth noting that there are a few drawbacks to working with a third-party. Mainly that outsourcing means handing over some of the control that businesses have over the delivery process. It can also be a large investment initially, although it often quickly pays for itself. Another issue that some businesses struggle with is that it puts more distance between them and their product which makes it more difficult to control quality.
Finding the right 3pl provider
Finding the right third-party option involves choosing an outsourcing solution that can handle the volume of your stock and future stock. Before you choose a business make sure you speak to their references to find a reputable business that can provide a good experience. It’s also important to find an outsourcing solution that has technology and facilities that are compatible with your business functions and products.
Choosing to outsource your logistics function can dramatically improve your business efficiency and cut costs but it’s not right for everyone. If you’re finding that logistics are taking up quite a lot of time and money it might be time to consider a third-party option.