Is your business growing and your customer base increasing? Are you shipping order quantities that you simply can’t keep up with? When you first started your business, it made sense to store your products in your garage and head to the post office every time an order was ready to send.
But there comes a point when this simply isn’t feasible.
If this sounds like your company, there are a couple of options to keep up with the demand:
- Invest in warehouses, trucks, and order fulfillment technology, keeping operations in house.
- Partner with a third party logistics (3PL) company to handle your order fulfillment requirements.
More often than not, the large capital investments required to keep order fulfillment in house are simply not feasible for growing companies, especially when there are 3PLs who can provide the same service at a fraction of the cost. 3PLs have tried and tested systems in place, so that you can concentrate on growing the business while your order fulfillment is in good hands.
“Simple Global has been an integral part of our success and ability to scale effectively. We trust them to handle our logistics and supply chain while we focus on growing our business.”
Daniel Kane, Co-Founder
What is a 3PL?
Picture this. Your garage is overflowing with products and you can’t keep up with orders. Do you upgrade from your 675 square feet garage to a 25,000 square feet warehouse? That’s a 3700% increase. It’s a big risk to take.
A better option is to partner with a third-party logistics provider. 3PLs can scale according to your business needs, removing a great deal of financial risk.
- Sometimes, 3PLs are used by growing companies until they reach a certain size, at which point they have the financial capabilities to invest in their own order fulfillment operations.
- Other times, 3PLs are a perfectly acceptable long-term solution for businesses that want to leave order fulfillment to the logistics experts.
It all comes down to the goals and objectives of the business.
3PL is an umbrella-term for several services that most ecommerce companies need once they reach a certain size. These include:
- Receiving, Warehousing and Storage
- Inventory Management
- Order Picking and Packing
- Transportation and Shipping Coordination
- Order Tracking
- Returns Processing
- Customer Service
- International Logistics
- Customs Expertise
Read more about the services of a 3PL in this post, “What is a 3PL?”.
As companies grow, these parts of the business can take up more time, cost more, and, if executed poorly, lead to greater inefficiencies and poor customer service. This is where a 3PL partner can provide huge value.
Benefits of partnering with a 3PL
Capital cost savings
Handling your own logistics requires a heavy investment in resources. To keep it all running and organized, you’ll need a warehouse, a staff, logistics software, hardware (e.g., scanners), forklifts, and other equipment.
3PL’s already have those things. They’ll have a fulfillment center (or even a network of fulfillment centers) and everything required to run it. Some 3PLs have their own fleet of vehicles for shipping. If they don’t, they have the clout to negotiate great rates with national and global shipping carriers. You can take advantage of their logistics infrastructure so that you don’t have to invest in your own.
Logistics providers that have multiple fulfillment centers give you a special advantage. You can split your inventory in different regions (for example, the U.S. West Coast and East Coast). Orders can then be shipped from whichever fulfillment center is closer to the customer’s address, reducing delivery time and keeping shipping costs low. Spreading inventory across multiple fulfillment centers also protects you against localized shutdowns due to extreme weather, technical problems, and other unpredictable situations.
Expand your reach
Shipping domestically is one thing, but there is a whole host of challenges when trying to go global. You have to consider things like international regulations, various taxes, and customs clearance. Plus, international shipping can be prohibitively expensive if you don’t have the right connections.
3PLs have the experience and the infrastructure to ship your items globally with a minimum of fuss. Their networks often include internationally-based fulfillment centers, making shipping to overseas countries faster, easier, and cheaper.
Sometimes in business it’s feast or famine. During certain periods you could be selling hundreds of products per week, but there could be other times when business slows to a crawl. Like many retailers, your orders could soar during the peak season between Black Friday and Christmas. If you’re handling fulfillment on your own, it might be hard to meet the increased demand.
3PLs are flexible and can scale up or down based on order volume. They can easily increase, adjust, and reallocate resources as needed to make sure all your orders get fulfilled on time.
Fast, efficient delivery is important to customers. In fact, 24% of online shoppers report having canceled an order because delivery time was too slow! With retail giants like Amazon offering two-day, one-day, and even same-day delivery, it’s critical for smaller brands to be as efficient as possible.
3PLs are laser-focused on logistics, so they are constantly developing new ways to streamline the fulfillment process. Orders come in, and your 3PL will pick, pack, and ship them quickly, efficiently, and cost-effectively. By partnering with a 3PL, ecommerce brands can offer their customers fast delivery with unparalleled transparency regarding order status and tracking.
As your company continues to grow, it’s only natural that you are going to also outgrow your current order fulfillment solution. Take the complexities out of logistics, and let Simple Global do it for you. Simple Global is a 3PL that navigates logistical challenges for you, so you don’t have to. We’ll remove your order fulfillment headaches before they start to negatively impact your customers, your operations, and ultimately, your bottom line.