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3PL is a service that allows you to outsource operational logistics from warehousing, all the way through to delivery, and ultimately enables you to focus on other parts of your business.
Third-party logistics companies provide any number of services having to do with the logistics of the supply chain. This includes transportation, warehousing, picking and packing, inventory forecasting, order fulfillment, packaging and freight forwarding. Wondering if your business needs to use a 3PL provider? When in doubt, use a pro-con list - we got started on one for you.
Using a 3PL provider offers lots of advantages. The biggest is that by handing over these logistics, you can focus on other aspects of your business such as sales, marketing and product development. Outsourcing 3PL leaves you with more time and resources. Here are a few other advantages:
A 3PL isn’t for every business. Here are a few drawbacks for you to consider. Would these impact your business?
Because of the sheer number of options, choosing a final provider can be an overwhelming process. On top of that, you must gather detailed information about the real cost of 3PL for your business.
Here are a few things for you to consider when choosing your 3PL partner:
1. Current and forecasted volumes. Choose a 3PL that can handle your current volume, but that also will be ready to handle your volume if you suddenly add a bunch of new stock, increase your stock volumes, or have a great spike in sales. You want to choose a 3PL that can handle your business now and handle it when you’re at full speed!
2. References and business performance. Check out references from other customers that use the 3PL provider and get a report on the company’s performance over the last few years. Seek out references and information about on-time deliveries versus delays, and how they compensate businesses when there are problems. See what their customers are saying about them - customer case studies and quotes are a good indicator of how the 3PL provider has built and maintained the customer relationship.
3. Compatible technology. If you’re using a cloud-based inventory management system, you should probably choose a company that is similarly cutting-edge and ready to integrate with your stock control software. Ensure that the 3PL provider’s technology works with how you work.
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