When we started the business, we sold out on day one.”
That’s the kind of immediate growth that Alex McBride experienced with The:5TH, a line of clean and timeless watches.
By the time they launched in December 2014, McBride had built a community of 70,000 followers on Instagram (now almost at 500,000). On Day One, the company sold $100,000 worth of watches, which essentially wiped out The:5TH’s entire inventory.
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Meteoric success is every entrepreneur’s dream. But for the unprepared, this experience can be a nightmare due to stockouts, customer complaints, and possible loss of their trust or loyalty.
Thanks to a healthy dose of cash reinvested in the business, McBride, was able to launch a new limited-edition watch line on the 5th day of every month (hence the brand name). How? With the help of 3PL (third-party logistics) providers.
A 3PL (sometimes called a TPL — short for third-party logistics) provides outsourced logistics services to companies. These services can make up part or all of a business’ supply chain management functions, including:
Fulfillment trends have increased and broadened for retailers. Customers demand subscription boxes, product bundling, mobile optimization, multichannel sales, wholesale shipping, marketing campaign personalization, competitive rate comparison, global shipping, and countless others.
These trends can keep even the most streamlined operations team up at night.
This is where 3PLs come in.
You can turn to third-party logistics for the operational power of an external logistics company without having to make a significant investment in logistics resources such as warehousing space or transportation.
Before running to your realtor to list your warehouse, you first need to understand the true cost of your existing supply chain.Overheads such as premises, transport, and distribution may be expensive if your business will keep logistics in-house. A good 3PL supplier, however, may be equally pricey.
Whether your product is sitting on a warehouse shelf or on its way to a customer, in-house logistical costs will remain constant. These costs include warehousing, distribution operatives, transportation, packaging or machine-based handling.
If you’re unsure whether 3PL is for you, ask yourself or your team these questions:
Although there are plenty of advantages, 3PL isn’t for everyone. Consider some of these drawbacks. Would these factors impact your eCommerce business?
Lesser control over the delivery process
With a third-party taking care of your shipping, there can be challenges when there are delays or problems in shipping a customer’s order. The customer will be looking at you for the resolution, not your 3PL.
You’ve read the pros and cons. You’ve narrowed down your choices of 3PL providers. Now what?
Before starting a relationship, ask the 3PL providers to answer the following questions:
Remember, the role of third-party logistics companies is crucial if eCommerce business owners are seeking to grow their market share in a scalable and controllable way.
For some, concerns about 3PL integration with your other business systems may be a barrier to making the move.
Ensuring that your business already has an industry standard inventory management system in place will open the way to a smoother and less costly integration with your 3PL’s own systems. Faced with costly alternatives, craft brewing company Honest Brew utilized TradeGecko’s inventory and order management system and were able to do exactly that.
To get ahead of your competitors and eliminate barriers to growth, retailers and eCommerce companies need more than traditional pick-and-pack fulfillment services. Hiring a 3PL to take care of your logistics can significantly improve your supply chain and boost your sales.
Go ahead. Take the time to weigh the pros and cons. Make sure it’s a good fit between your inventory management system and your third-party logistics provider. To help you get started, we’ve compiled the following list of the top 3PL providers for eCommerce businesses by region:
The top 3PL providers in the USA
The top 3PL providers in Canada
The top 3PL providers in Australia
The top 3PL providers in New Zealand
The top 3PL providers in the UK
The top 3PL providers in Singapore
The top 3PL providers in Hong Kong
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