Third-Party Logistics Takes The Pressure Off Your Business

Disclaimer: The views expressed in this article belong to an independent guest author and not Leaderonomics, its directors, affiliates, or employees.
 

Are you a business owner struggling with order fulfilment? Are you wondering how to make your business’ logistics more efficient? Worry no more. Getting a third-party logistics (3PL) partner is the way to go.

Third-party logistics are companies outsourced by businesses to deal with their supply chain. They work more efficiently for e-commerce businesses. The main aim of 3PLs is to provide order fulfilment services for their clients.

Read on to find out why 3PLs can be your business’s best investment.

What Services Do 3PLs Offer?

3PLs have specialisations. Some deal with goods requiring cold storage, others deal with heavy goods, while others handle hazardous goods. They make use of technology like the 3PL warehouse software from Softeon and other similar tools for supply chain and inventory management to ensure the efficient delivery of their services.

These 3PLs typically don’t have freight trucks for transportation. Hiring trucks or getting into contracts with freight companies help them render streamlined services for your business.

3PLs offer the following services:

• Warehouse storage: Once you manufacture your products as a business, you don’t need to worry about storage. Your 3PL will transport your products from your business into their warehouse for storage. 3PLs often have large warehouses that store products for several companies. Each company has their own section.
• Inventory management: After your stock is taken to the 3PL’s warehouse, they’ll take inventory of your products. The products will be logged in as your stocks.
• Shipping services: For orders made from your business, the 3PL will process them. This includes packaging them and delivering to customers. Some 3PLs may also offer packaging customisation when required. If your clients are wholesalers and commercial businesses, you don’t have to worry. Some 3PLs offer Full Truckload (FTL) and Less Truckload (LTL) freight services. FTL and LTL’s are ideal for dealing with large orders.
• Reverse logistics: Your 3PL will handle stock refunded by customers due to damage or defects. They’ll also help you get rid of unwanted stock.

A Typical 3PL Business Model

The typical 3PL model is illustrated below:

1. Your business makes the products.
2. The finished products are transported to the 3PL’s warehouse. Transportation can be done by your business or the 3PL. It depends on your agreement.
3. Upon arrival, an inventory of the received products is made. They’re recorded as stocks of your business.
4. The stock is stored in the warehouse depending on the products’ requirements
5. Once an e-commerce order is made on your business’s system, it’s directed to the 3PL’s system, which receives the order.
6. The 3PL’s warehouse team identifies the products ordered and takes them out of storage. The products are well packaged, awaiting delivery.
7. The products are then shipped to the customer’s location. Shipping can be done as soon as the orders are received. All this is dependent on the agreement with the 3PL. You, as the client, can track orders made until they reach the customer.

Why 3PLs

Below are the top reasons to invest in 3PLs for your business:

1. Allows for Business Growth

With a 3PL, you get the opportunity to focus on the production and marketing aspects of your business. You can grow your business faster and easier when you don’t have to worry about moving your products. By partnering with a reliable third-party logistics provider, you ensure that your supply chain operations run smoothly and efficiently. This collaboration allows you to allocate resources more effectively, driving overall business growth and customer satisfaction.

This may interest you: Leaderonomics Growth Model

2. To Save Time And Money

3PLs save time by allowing you to focus on growing your business. Time isn’t wasted on packaging or delivery.
They also save you money since you don’t have to buy or rent a warehouse for storage. You don’t have to employ more workers to deal with the packaging or invest in packaging equipment. You’ll also spend less on shipping costs. Most 3PLs have established connections and partnerships that allow them to ship at a cheaper cost. 

Supplementary reading: Seven Steps To A Greater Financial Freedom

3. Easier International Freight Transportation

If your business has an international customer base, having a 3PL will make the transit easy for you. A 3PL will help your business with all documentation needed at various borders. 
 

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4. Better Inventory Management

A 3PL manages your inventory and updates it as the stock moves in and out. These records are kept and forwarded to you, as the client. Also, a 3PL will inform you when you’re running out of stocks and when to reduce production based on stock flow.

5. Allows Up-scaling/ Downscaling Of Production

Businesses tend to have high and low seasons. You can adjust your production easily depending on how your business is doing. Unlike having your own warehouse, space may be wasted during a recess or more may be needed in a boom. With a 3PL, they provide warehouse space depending on the products you bring in.

6. Allows Testing Of New Markets

A 3PL has warehouses in many locations. You can arrange for your products to be handled by a warehouse, not in your usual locality. This way, new customers are able to access your products. This also allows for a wider customer base for your business.

7. Minimal Risks

Handling products can at times be challenging and risky. Even when properly packaging your products, they can still end up getting damaged in transit. This wastes your time and money. With a 3PL, products are handled accordingly to ensure the delivery of goods without damage. In case goods get damaged, you won’t be liable. The 3PL will take the risk.

8. Easy Handling Of Reverse Logistics

Reverse logistics happen when defective or damaged products are returned by customers. A 3PL will receive the goods and assess them. If some need to be disposed of, they’ll handle the process. The 3PL will also resend goods that are in good condition. All of these will be done without your involvement. The 3PL will only inform you of the returned products.

9. Increased Customer Satisfaction

 3PLs are experienced with ensuring customer satisfaction. They do so by ensuring timely and correct delivery. For any hiccups, they deal with the issue professionally and promptly. By working with an experienced 3PL, you can protect your customers’ trust and your company’s reputation.

Supplementary reading: 6 Easy Ways to Incorporate Client Feedback in Your Business

Conclusion

Working with a 3PL for your business will be your biggest and best investment. 3PLs can help you save time and money, streamline inventory management, scale up and down easily, test and enter new markets, and ensure customer satisfaction. The choice is now yours.

About Author: Jie Ch'iu is a business coach. He assists business owners and leaders to reach their potential in business and life. When he’s off work, Jie enjoys swimming, hiking, and cooking.

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