At some point, all e-commerce businesses have to decide whether to outsource to a 3PL provider or invest in warehousing facilities.
As your business grows, your operations must evolve to meet the growing demands of your business.
E-commerce means getting your head around burgeoning fulfilment needs. At some point, you will reach a crossroads: do you outsource your fulfilment logistics to a 3PL, or do you invest in warehousing and a team to pick, pack and ship your orders?
What does 3PL mean?
Let’s get right back to basics. 3PL stands for a third-party logistics company. Generally, a 3PL provider will run all or part of a business’s logistics operations, such as picking and packing, inventory, shipping orders and freight management.
They become a true partner with all the technology and expertise you need to run your operation smoothly without the need for investing in real estate.
The services your 3PL provide are customised to suit your needs and can easily be scaled, up or down, depending on demand. In a nutshell, it will enhance your operations, productivity and customer experience.
Why is it better than having my own warehouse?
Many e-commerce businesses have warehousing because they want control over their inventory and warehouse management. The problem is they also have to have their team of pickers and packers, their own technology and the ability to scale up and down quickly with demand.
3PLs have evolved to cope with any type of business. When you factor in costs for staff, expertise and overheads, running your own warehouse operation may not be the most profitable option.
What can a 3PL Provider do for me?
Many e-commerce companies use 3PL to manage their logistics operations in a productive and cost-efficient manner. Plus, there are many additional benefits, such as:
- Meeting your transportation needs by finding carriers, streamlining paperwork, meeting your schedule, and doing it all cost-effectively
- 3PL distribution services focus on the efficient storage of goods and shipment to customers, quickly scaling in response to growth and is less costly than operating a warehouse
- Helping you grow by extending your sales reach into online markets
- Negotiating lower transport costs make it more cost-effective and more efficient to outsource fulfilment to a 3PL
- Greater expertise because a 3PL is composed of supply chain experts with experience managing supply chains for a variety of businesses
- Access to excellent IT capabilities, integrated systems, reporting and inventory tracking
The final word
Whichever way you look at it, outsourcing to a 3PL provider makes sense. Not only does it reduce your overheads, but it also means greater cost-efficiency, operational ability and customer service.