A 2019 study has shown that 89% of shippers and 98% of 3PL — third-party logistics — providers agree that the use of 3PLs has significantly improved services to customers. 3PLs are useful as they can provide warehousing and distribution services that can be customized to meet market conditions or customer demands.
What are Third-Party Warehouses?
When working with a 3PL provider, you will have access to their warehousing services which will serve as a place to receive and store goods from your suppliers. This can help save you from having to manage your own warehouse and hire additional staff to run it. However, this also means that you must communicate your standards to the third-party company so that they are able to provide the warehousing services you require. For instance, they should know what your standards for accepting inventory are and what to do with shipments that fail to meet these standards (i.e. damaged during transport).
When receiving your inventory, a 3PL will also be capable of unloading, sorting, counting, and then indexing all items into a synched system that will allow you to see what you have at all times. This helps ensure that you always have stock of everything you need, and know when to order more when the numbers get low. The storage space allocated at the warehouse will typically cost less on average than running your own site. Some 3PLs will charge either on the number of items, pallets, or volume of combined space. However, when compared to the cost of renting your own space and paying individual workers, a 3PL will usually save you overall.
3PLs will also often take care of both the warehousing and distribution of your items, meaning you won’t have to worry about hiring additional fulfillment services. Shipping items this way can also save you money as FedEx, DHL, UPS, and many trucking companies all offer discounted rates to warehouses where they can fill up empty trucks without the need for additional stops. By combining all of this, you can stand to lower your overhead while increasing your throughput overall.
By combining storage with product distribution services, you help consolidate everything into one singular partnership that helps simplify your business. Consider this simplicity when compared to having to store, index, pack, and distribute everything yourself. Not only would you have to increase the number of staff members you have, but you would also have to expand your business space to accommodate everything. 3PLs remove this burden and instead allow you to focus on growing your business and taking care of your customers.
A Good Choice for eCommerce Businesses
3PLs are especially good for businesses that operate primarily online. This enables them to have access to large warehouse spaces to grow as their business does without having to invest in large spaces they may not otherwise need. Having a third party space also allows for the ability to customize as the markets fluctuate. Investing in a large space from the get-go might be a good idea when the market is booming, but during declines, you could be left with excess space that costs too much to maintain. 3PLs remove this risk while still allowing for growth should you require additional space for products in the future.
3PLs are good options to consider if you are looking for warehousing and distribution services but don’t want to invest in a warehouse all your own. Not only can they handle all of the logistics, but the can store, package, and ship your products quickly and more effectively than other alternatives. This helps keep costs low, sales high, and customers happy. If your business is in need of warehousing and distribution solutions, consider the advantages of 3PL providers and contact one today for more information on how they can benefit you.
