The continuous advancement of technology and globalization has made e-commerce a significant impact on businesses. Because of the wider audience reach, many businesses have taken their services to e-commerce platforms. Although small businesses may not have an immediate increase in sales in the beginning, there will come a time when they will find it hard to manage orders in-house anymore. Not everyone has the necessary resources to upgrade their storage to accommodate a more significant number of orders and it is equally difficult for some to keep track of logistics on their own. Fortunately, there is a solution to it and that is by using a 3PL.
What is a 3PL?
A 3PL or third-party logistics provider is usually outsourced by businesses to help with some aspects of their supply chain. They offer services that address the areas of the supply chain process where businesses may lack resources. Small businesses usually do not have enough capacity to monitor the entire process in-house so they need to outsource their logistics services. Common 3PL services include warehousing, inventory management, and transportation.
Handling products can be quite a complex process because you have to guarantee that all orders are in great condition when they arrived at their destinations. You also have to ensure that they arrive on time because this will make a positive impact on your consumers. When customers are satisfied with your performance, it will boost your brand image and generate more sales.
What are the benefits of a 3PL?
The efficiency of a business is what spells its success and you can only achieve that when you have a working, seamless supply chain process. There may be some hesitations when outsourcing a logistics provider but in reality, it presents many advantages to your business. Here are some benefits of a 3PL:
Saves you warehousing and transportation costs. You might think that getting a 3PL is just an additional expense, however, it is actually both a cost-effective and cost-efficient solution. With a 3PL, you do not have to invest in storage space and transportation services on your own because they can already provide it for you. Warehousing is one of their essential services and a 3PL also has a trained staff to manage inventory. In terms of shipment, they can tap into their network of transportation services to have your orders delivered to your consumers in the shortest amount of time.
Minimizes risk. Managing your supply chain can be quite risky because one wrong move or decision can affect your business performance. A 3PL can minimize the risks because they are trained to forecast unexpected events and apply immediate solutions if needed.
Increase efficiency. The 3PL is armed with knowledge and experience that they apply to the various businesses they lend their services. Not all businesses have the same needs so they have to tailor a strategy that is fit with them. Because they are already experts in the industry, effective and efficient order fulfillment can be achieved which will result in better customer experience and satisfaction. 3PLs also use advanced technology to increase efficiency and create a seamless supply chain process.
Saves time. Aside from saving money, you can also save time when you hire a 3PL. Since they are doing most of the heavy load, you have more time to focus on improving other aspects of your business such as marketing and promotions. Inventory management is a crucial step in the supply chain process and can take up most of your time especially during peak seasons. This is even more difficult for a small business to handle so having a partner to manage it will free up a lot of time to work on enhancing your brand image.
Flexible and allows scalability. Small to medium businesses may experience fluctuations in order volume from time to time. Even if you experience a sudden increase in orders, a 3PL can easily accommodate them in their storage without additional cost. They can scale up or down depending on the current state of the business.
Able to expand into new markets. Depending on your goals, you may want your business to tap into new markets whether domestic or international. A 3PL provider can help you access these areas and find out if they are profitable. Since they already have knowledge about these markets, you will have a lesser time to learn the intricacies as you have a partner who will guide you all throughout. Using a 3PL will help you in the growth of your business without having to spend for more resources.
Offers value-adding services. Business owners use a 3PL mainly for warehousing and transportation services. However, they also offer other services that add to the efficiency and customer experience. These value-adding services include quality control, packaging, and returns processing but some 3PL providers offer even more services that you might find beneficial for your business.
Gain more knowledge about supply chain management. A 3PL may be the one to handle the supply chain but it does not mean you cannot learn from it. The process involves a lot of rules and regulations especially if you are shipping internationally. Your service provider can help you comply with the different customs regulations since not all countries have the same laws in place. Knowing this kind of information will help you avoid issues in the future. You can also gain insights into managing the supply chain that will aid you in creating a strategy for improving your business performance.
Final Thoughts
If you want to establish your business presence in the e-commerce landscape, you have to prioritize your supply chain management. A 3PL offers the most efficient way to improve the process by offering their expertise and services. Since not all businesses have the resources to store their products, manage inventory, and arrange shipment, a 3PL can provide these for you so you have more time to focus on enhancing your brand image. This is also a cost-effective and cost-efficient solution especially if you are thinking of expanding in the future.
