How Your Business Can Best Use a 3PL Provider
You made it. It finally happened, your business appeared on Shark Tank, Good Morning America or received local news coverage. It’s been a dream that you’ve kept close to your heart since you launched your eCommerce business…and now it’s here.
Your business is receiving grand scale, national notoriety and orders are booming! Here’s the part where you need help, and here’s the part where a 3PL comes in.
But wait… they’re moving too fast. Suddenly, you can’t keep up. It’s exciting, but that excitement is quickly heading toward being overwhelmed. You’re stuffing boxes in your living room and inviting your family and friends over to help you fulfill orders. You need a break…
You casually check your company’s mentions on social media, ready to bask in the glow of the latest praise for your appearance on television. But that’s not what you see.
All you can seem to see are complaints about how orders are not fulfilled and comments roasting your business for being unprofessional because no one has responded to an email sent 20 minutes ago.
You blink back tears…you start to think all that media coverage may have been the worst thing to happen to you…your dream has become a nightmare…
Sadly, this is the story in one way or another, of so many business owners who don’t anticipate a sudden spike in popularity and find themselves unable to fulfill a major boom in orders.
Business Owners Don’t Have to Fulfill Orders in Their Garage, Third Party Logistics (3PL) Are the Way to Go
With the rise of the internet and thus eCommerce, we have more access to ideas and people than ever before. In the past, starting a business could be a long, intense process filled with many hurdles that made entrepreneurship seem inaccessible to the average Jane or Joe.
Now it’s not like that. Now, you can launch your products via an online store and gain popularity in a relatively short amount of time depending on what you’re offering.
As in the story above, a major drawback of this can happen when owners find themselves trying to manage the logistics of storing, shipping, packaging, and fulfilling all on their own.
When taking on this level of management, a business (whether it’s just getting started or has been around for years) can be crippled by sudden growth and be forced to close its doors.
This is Why 3PL Providers Have Become so Popular
“Back in the day,” transportation contracts involved the shipper (major wholesalers, retailers, manufacturers) and the carrier. As the marketplace expanded, involving an increasing number of outlets, it became necessary to involve an additional company in the process (a “third party”).
Third-party logistics providers have grown extremely popular with the rise in eCommerce.
What Does a 3PL Do, Exactly?
Companies need a go-between to effectively manage issues related to warehouse storage, transportation, shipping, packaging, distribution, container shipping and delivery–all together these parts make up the “logistics” of a business.
By having another party manage this side of the business, a huge responsibility is lifted for owners, who can then focus on business growth.
When Should Work with a 3PL Start?
According to one Shopify article, businesses should start working with a 3PL s soon as they realize that they are fulfilling at least 10-20 orders per day.
The article goes on to say that a 3PL needs to be called in if merchants find themselves running out of storage or paying too much for it, or if there is an upcoming event that will lead to a surge in business.
How Do I Get In Touch with a 3PL?
There are many ways in which you can reach out to a local or national 3PL provider. Doing an online search is one way, or talking to others to see who they recommend. You want to make sure that through your research you find a provider who offers several advantages.
Many times, 3PLs handle only one aspect of logistics. You may find one who offers warehousing, another who offers transportation and then another who partners with you on distribution.
When possible, you want to work with an asset-based logistics provider who can serve as a hub to help you manage your supply chain smoothly.
What’s the Best Way to Work with a 3PL provider?
You want to work with a provider who can help you scale your business by increasing your ability to reach your customers. With the right partner, you can avoid issues such as having too much inventory during low seasons, or not enough during peak seasons
One of the best advantages, as pointed out by C.H. Robinson’s Steve Raetz, Director of Research and Market Intelligence, is how 3PLs can help you break into new regions since they are often looking for ways to improve aspects of supply chains. Using a 3PL to help scale your business is an incredibly effective way to use third-party logistics.
Once you select your logistics partner, you want to make sure that you are comfortable with their style, that they have a robust network and seamlessly integrate technology.
You will want a provider who is not only comfortable incorporating your systems, but who also uses software platforms within their company to ensure transparency when it comes to the movement of your goods.
Some of the other key things to look for in your 3PL partner that will ensure a positive experience:
- Expertise
- Stability
- Customization
- Transparent Pricing
- Modern Management Tools
- Consistent Communication
- Flexibility
- Anticipatory Actions
Is There a Loss of Control When Working with a 3PL?
The short answer is yes. When researching what it means to work with a third party logistics company, you may come across a list of advantages and disadvantages.
One of the disadvantages that always make it onto these lists is a loss of control, but depending on your provider that doesn’t have to be a bad thing. What they’re really saying is that you will no longer be “in the weeds” of micromanaging every single step of the shipping process–which can definitely be a major advantage!
Who Uses 3PL Providers?
If you’re still wondering whether a 3PL company is a right fit for you, many Fortune 500 companies use 3PLs and that number is steadily rising. According to one study, 87% of supply chain executives are somehow connected to 3PLs.
Are 3PLs Trendy or Timeless?
As the demand for 3PL partners continues to rise, the logistics industry will be pushed further and further into the future. Forcing 3PLs to innovate and adopt new technology to meet the growing needs and ever-evolving marketplace.
The 3PL industry has been gaining momentum for decades and shows no signs of slowing down as more and more people move from idea to small shop to mass market.
Owners, whether big, small, old or new, traditionally find that working with third-party logistics partners end up working in their favor.
At the end of the day, you need a reliable, communicative, efficient partner with experience who is going to manage the logistics of your business. So now, are you ready to experience next level service with a tech-enhanced asset-based carrier?
