Guide to Picking a 3pl Warehouse

Guide to Picking a 3pl Warehouse

In today’s e-commerce landscape, having a warehouse is already a must to store your products. Globalization and technology contributed to the surge in demand from online consumers and businesses need to keep up with it. When you have a warehouse, it is easier to manage an inventory and create a seamless distribution.

As demand grows, managing the supply chain is a critical part of a business’s operations. Many businesses nowadays have chosen to get the services of a third-party service provider to handle their warehousing and distribution. Why? Because they offer a whole package when it comes to supply chain management, maximizing efficiency to its fullest. Not only do 3pl companies have a centralized system in place, but they also partner up with reliable shipping companies to make deliveries fast and effectively.

Choosing and partnering with a 3pl company for warehousing and distribution is a vital component of the performance of your business. In this article, we will discuss how to select the right 3pl warehouse for you.

Why is 3pl Warehousing Important?

The goal of a business is to satisfy its consumers. When customers are satisfied, it will bring more sales to a business, increase its sales, and expansion is possible in the future which is why it is important to have a seamless and effective supply chain management to achieve them. If an unexpected blunder happens and is handled poorly, it will affect the performance of your business, resulting in loss of sales and customer experience issues.

Partnering up with a 3pl company is a great way to guarantee smooth operations from start to end. By using their warehousing services, there is a centralized system to monitor every business process and you will be working with an experienced and trained staff. Choosing the right 3pl partner from the start improves the speed and efficiency of your supply chain and reduces the risk of bad performance. When you have a solid system working, it is easier to connect with different markets, domestic or global.

Having a 3pl warehouse will let you manage inventory efficiently and cost-effectively. With everything you need in one place, a faster flow of supply can be achieved. This would also help your business be competitive against other e-commerce sellers even if you are in a highly saturated niche.

Factors to Consider When Picking a 3pl Warehouse

Picking a reliable 3pl warehouse can be quite overwhelming especially if it is your first time getting their services. It is not an easy process as you will have to carefully assess which provider offers the best services to maximize your supply chain process and get your desired results. To help you out in finding the right 3pl company for your business, here are the factors you should consider:

  1. Warehouse location. One of the most important things you have to consider is the location of the warehouse. A warehouse located near your customers guarantees faster shipping times and will reduce costs as well. Over the years, consumers have chosen e-commerce sellers who have a good record of shipping orders on time. E-commerce is a fast-paced environment and will continue to do so and you can only keep up with it if you can move your products efficiently and quickly.

Some 3pl companies have multiple warehouses in different key locations which is ideal for sellers who have customers in different countries. However, if you are only starting, multiple warehouses might not be that important. If a 3pl company only has one warehouse, you have to check its transportation options to see if they can meet your customer’s delivery expectations.

  1. Services offered. All 3pl companies offer the same basic services, but some offer additional services that improve customer experience. Such additional services may include kitting or packaging, quality control, and returns processing. These can help streamline your supply chain process and enhance your brand to your consumers.

When choosing a 3pl warehouse for your products, ask yourself if these additional services fit your business needs. However, all of these will greatly benefit you in the long run and save you money. Quality control is a great service to avail because it can avoid costly errors and delays. If you have an Amazon store, some warehouses also offer FBA service which simplifies order fulfillment for the platform.

  1. Technology. 3pl warehouses are already using the latest technology nowadays to manage inventory more efficiently, creating a more streamlined process from start to finish. Some also can integrate their system into your online platform so that whenever an order comes in, the warehouse will automatically receive the order details and start packing orders.

With their system, they can also update inventory status in real time, allowing your customers to see how many stocks are left for a particular product. They will also be provided with tracking information as soon as their order is dispatched from the warehouse and shipped by the transportation company.

  1. Experience. Of course, you have to take into consideration the experience of a 3pl warehouse. Experienced 3pl companies already have the years to back up their credibility and reliability. It is easier to filter out those who have been in the industry for quite some time already. However, experienced 3pl companies may have higher pricing and it is understandable if you cannot commit to these prices yet. With that said, you can still find other companies with more reasonable prices and enough experience. It will just take an extra effort to prove that they are reliable to avoid wasting money.

Your potential 3pl partner must be knowledgeable about all processes involved in supply chain management. They should know all rules and regulations concerning the movement of goods from their origin country to their destination. This includes customs regulations which may vary from country to country.

  1. Customer service. You should also consider how a 3pl company accommodates questions and inquiries from their clients. You can already determine this when you first consult with them. Great customer service is when they entertain you promptly and give detailed and concise answers. You want customer service that is easily accessible especially if you have an urgent inquiry. Taking too long to respond is not a good sign and should be avoided.

  2. Special storage services. This is only applicable to sellers whose products are needed to be stored in a controlled climate. Not all 3pl warehouses have the capability of storing special items so you have to clarify if their facilities can handle this type of goods. If you intend to sell food products, you have to ensure that the warehouse is in a controlled environment so as not to risk wastage which can be quite costly if it happens.

Final Thoughts

3pl warehousing is an essential part of supply chain management. A streamlined process improves the efficiency of your business performance, resulting in a great customer experience and an increase in profit. But this can only be done if you choose the right 3pl warehouse for your business so you have to be mindful during the selection process. It can be an overwhelming process but it greatly improves your supply chain process and helps with the overall customer experience.