Using third-party logistics, or 3PL, can have countless advantages for a business, especially eCommerce or small businesses. Third-party fulfillment and logistics are when warehousing and transportation are outsourced. Outsourcing fulfillment processes such as inventory storage, picking and packing orders, shipping, transportation, and other logistical entities can be beneficial to a business. Outsourcing logistics can also be helpful for businesses with bulk or on-demand products.
Here are some advantages of using a 3PL service provider:
Using a 3PL company reduces many costs, such as warehousing, shipping, and salary costs. Third parties can negotiate better shipping costs with parcel carriers because they are shipping at a higher volume than a typical individual company. And efficiencies are constantly being improved through new technologies and data, cutting costs and adding enhanced value to businesses.
Inventory & Data Management
If a business does not have a brick-and-mortar store or has limited capacity, using 3PL could increase inventory capacity at a lower cost than purchasing or renting warehouse space. 3PL service providers also handle data management, including auditing, which is one less thing for a business to worry about. Contacts, addresses, product turnover, and other data are handled by the 3PL provider, allowing business owners and managers to focus on more “big picture” items.
Time is often one of the biggest issues for a company; typically lack of time to get every task done. Utilizing 3PL takes a number of things off the plate of an employee, so they can complete other areas, such as sales, marketing, manufacturing, etc.
Risk Management & Accuracy
3PL companies have experts in logistics, which limits risks since they have advanced capabilities, equipment, and manpower with a narrow focus. 3PL warehouses are often equipped with advanced technologies, which also analyze data for changes in trends and double-check human error. Third parties are also often insured against loss or damaged products.
3PL companies handle all aspects of distribution, from picking and packing products to delivery. Most 3PL companies provide kitting services for larger-scale shipments, combining individual components into a larger kit for shipment. This is great for bundle promotions or campaigns that include shipments of duplicate packages to a lot of different addresses.
The 3PL company can handle all parts of the fulfillment process. Many companies work closely with carriers and vendors to track shipments and address any issues in the process. If there are issues in the supply chain, 3PL companies can identify the problem and suggest possible solutions that can mitigate the effects.
Partnering with a 3PL company can be customizable to a business. It is important to research different third parties before choosing one to partner with. An ideal third-party logistics firm will have standard services but create a plan and contract catered to specific business wants and needs. For example, some warehouses may include certain safety measures, temperature-controlled storage, and even temperature-controlled delivery. Most third-party logistics firms will work with clients to offer customized plans, but some are able to offer more services than others.
If a business plans to expand manufacturing or even open more locations, using a third-party warehouse or multiple warehouses will allow for easier expansion. By working with a 3PL firm, a business can leverage new supply chains and access new markets easier.
Overall, using a third-party logistics firm has many benefits. It will provide the business and its customers with a better experience. Utilizing third-party services enables business growth. With many responsibilities being outsourced, a business can focus its time and efforts on the core concern of the business, more sales!
Contact Omega High-Impact Print Solutions today, to discuss our fulfillment and logistics services.
Written by Omega High-Impact Print Solutions’ Marketing Intern, Ava Hoch.