Third Party Logistics (3PL) is the supply chain management for outsourcing the partial or full business distribution along with other fulfillment services. The companies who do not have distribution as their core competencies often refer the 3PL in order to rose to prominence.
An effective 3PL solution is legally bound to perform the requested services without having ownership of the inventory of such ecommerce company. The demand for 3 PL has increased over the last 2 decade. A study revealed that 96% of the companies listed under Fortune100 refer the services of 3PL.
Reasons for Enlisting a 3PL:
Do you Receive more than 20 Orders a Day?
If you have to deal with good order volume on a daily basis, it is time to consider the third party logistic to add a value to your business. It is one of the effective 3 PL solutions that will take the work off from your plate and let you focus primarily on customer sales. This service will surely inflate your cost of shipping to an extent but if you have enough margins, it can significantly contribute to the success of organization.
Curb your Storage Expenses
You will be surprised to know that you can effectively curb your storage expenses by associating with a 3PL. As the business expands, the need for storage facility also augments which involves a hike in storage fees. If you compare the quote from these effective 3 PL solutions, you may save a considerable amount on your surging inventory storage needs.
For Spiking Businesses
Are you in the phase of expanding your operations? If you can forecast a considerable increase in your order volumes, then it is appropriate to seek an effective 3Pl solution for your business at least four months in advance to efficiently deliver all your orders in time. The increase in your orders may be due to some promotional or marketing activities by your business, flash sales or seasonality.
Types of Third Party Logistics Providers
Following are the core areas which are available to cater to your business needs:
- Warehousing and Distribution: Depending on your business, the 3Pl offers various sizes and shapes that can suffice the warehousing needs for the inventory. With a comprehensive approach of choosing the right provider, the effective warehouse solution can efficiently contribute to the business success. However, pricing, shipping carrier rates, daily cutoff time for fulfilling the orders, insurance, delivery service levels and other management tools offered by warehouse are some of the crucial factors which are considered before finalizing any warehousing service from a 3PL.
- Transportation: 3PL here specializes in the transport between the two locations and efficiently manages the shipment between your warehouse and your factory or your buyer and you. Factors like Origin location, Timeframes, Destination location, Service levels Distribution, Pricing and discounts, Shipping method and Shipping & Receiving are crucial in deciding your transportation logistics partner.
What are the Advantages of Opting for Effective 3PL Solutions?
Optimizes your Shipments: With the expertise of 3Pl, you business can optimize the shipments by fulfilling the shipping and warehousing needs. Setting up your own team will incur more time and cost than referring a 3PL which can proficiently fulfill all your shipment needs.
Manage Internationalization: If you are planning to expand your sales at international level, an effect 3PL solution can take care of diligent aspects like customs, documentations, duties and other issues, making the selling easy in different countries.
Limits your Overhead Cost: Setting up a personal warehouse for a business involves huge fixed and overhead costs. But working with a 3PL provider can minimize your cost.
If your business is also on the verge of expansion, it is time for you consider an appropriate 3PL provider.