No matter what size e-commerce business you have, you could be a prime candidate for enlisting the services of a third-party logistics (3PL) provider.
If logistics and fulfillment aren’t core to your business model, then it’s probably something you can—and should—farm out to someone else. A 3PL can help take the headache of e-commerce fulfillment off your plate. Plus by working with a 3PL—who’s full time job is logistics—you’ll be taking advantage of their expertise and advanced technology.
But first, let’s review…
What is Third-Party Logistics?
Third-party logistics—a.k.a. 3PL or TPL—is used for logistics and supply chain management to outsource some or all of a company’s distribution/fulfillment. Basically a 3PL is used to help you get your product to your customer.
For us at Ship Central, it’s even more than that. It means taking the time and headache out of getting your product to your customers. Even though fulfilling orders is one of the most important parts of the customer journey, it can take away time and money that you could be investing in growing your business.
There are different types of 3PLs out there and different providers offer different services but common services include: warehousing, picking and packing, shipping, inventory and order management, and kitting.
Using a 3PL for your e-commerce fulfillment can save you time, money and headaches as well as help your business grow.
Don’t Wait Until It’s Too Late
When debating whether or not to switch to a 3PL, people often wait until it’s too late. They wait until their current e-commerce fulfillment strategy can no longer handle the volume of orders coming through. Not. Good.
When you have a mountain of orders but don’t have the resources to fulfill them in a timely manner, it’s a nightmare. And it’s 100% the wrong time to start thinking about a 3PL.
Back orders are not only bad for you due to the extra work it creates in order to catch up, late deliveries make for a terrible customer experience. This can translate into bad reviews. So not only did you lose a loyal customer you’ve also lost future customers as well.
If you decide you’re not ready for a 3PL that’s totally fine. However, if you think you are ready, don’t keep putting it off because it might just come back to bite you later. The right time to make the switch is before a fulfillment fiasco.
5 Reasons to Start Using a 3PL for E-commerce Fulfillment
Every company is different and the right time for a 3PL is different for every company. Here are just a few things to think about as you consider whether or not you’re ready to outsource your e-commerce fulfillment.
1. Fulfillment Is Costing You Too Much Time & Money
There comes a point where you need to decide whether logistics is a core component to your company. If you’re a small business/startup and you’re filling 10-20 orders a day on your own, it might be time to think about a 3PL instead of hiring another employee or continuing to fulfill all the orders yourself.
If you’re so swamped with orders and everyone has to pitch in with fulfillment, you’re wasting a lot of time that should be spent on more valuable activities. When you’re at a point where growing your business means investing more into your e-commerce fulfillment but that’s not core to your business, it’s time to start thinking 3PL.
2. You’re Running Out of Storage
If your storage space (storage unit, basement, warehouse, etc.) is packed to the brim or on the brink, then it’s time to think 3PL. A 3PL will not only securely store your product but also take care of the rest of the e-commerce fulfillment process while they’re at it.
This goes back to the previous point, when you’re in the position where you need to invest more into your logistics in order to grow it’s probably time to consider a 3PL. Storing and managing your inventory can get pricey and time consuming but with a 3PL you get that and so much more plus you can spend your time doing other more valuable things.
3. You’re on a Growth Trajectory
This is probably one of the biggest reasons for an e-commerce business to switch to a 3PL. Finding a 3PL that will give you the room you need to grow is crucial. Like I mentioned before, waiting until it’s too late can be a nightmare and can potentially stunt your growth.
If you’re not ready to manage your growth then switching to a 3PL could be the best option. Instead of having to invest in upgrading your supply chain, pass it off to another company who’s already done that work for you.
Be sure to pick a 3PL that will give you room to grow and is committed to helping your company prosper. You need to do your homework and guarantee that they’ll be able to meet demand now and in the future.
4. Your Packing Process Is Minimal
One thing to consider outside of your growth and bandwidth is what your packing process is like. If your products require simple packing, then a 3PL isn’t an issue. But if your packing is more complex and you want a lot of control and oversight on how things are done, finding the right 3PL to work with might be difficult.
Keep in mind that most decent 3PLs that work with many e-commerce brands have kitting services that you can take advantage of if you want to pre-kit certain bundles or products. Even if your packing procedure is complex, it’s still worth reaching out to 3PLs to find out if they’re willing to accommodate you.
5. You Have the Margins to Support a 3PL
Another thing to keep in mind is your margins. If your margins are already razor thin prior to enlisting the help of a 3PL then you might need to keep e-commerce fulfillment in-house. A 3PL can be majorly beneficial but all the benefits in the world won’t matter if you flat out can’t afford it.
On the other hand if you do have decent margins and can afford a 3PL they can be just the partner you need in order to grow your business. In fact a 3PL could potentially help you save money as well as supercharging your growth. Before you write-off 3PLs ask about a consultation to see if you might be a good fit.
The Takeaway
Don’t wait until you hit max capacity before you enlist the help of a 3PL. Waiting too long before you make the switch can be a nightmare for both you and your customers.
Consider whether…
1. Fulfillment Is Costing You Too Much Time & Money
2. You’re Running Out of Storage
3. You’re on a Growth Trajectory
4. Your Packing Process Is Minimal
5. You Have the Margins to Support a 3PL
When you’re ready to make the switch, come talk to us! At Ship Central we help take the headache out of e-commerce fulfillment so that you can focus on what’s important to growing your business.
With state-of-the-art software-based fulfillment solution you can integrate with the major e-commerce platforms like eBay, Amazon, Shopify and more. And you’ll also have the visibility you want with real time reporting.