Is your business growing and your customer base increasing? Are you shipping order quantities you simply can’t keep up with? When you first started out, maybe 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 now you find yourself at a point where this just isn’t possible.
If this sounds like your business, there are a couple things you can do: you can either invest in the warehouses, trucks, and technology necessary to keep operations in-house, or you can partner with a third party logistics provider (3PL). For most businesses just breaking out of the garage, a joining forces with a 3PL is by far the better choice.
“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
When your business is booming, you’ll need to get out of your 675 square foot garage. But are you really prepared to move into a 25,000 square foot warehouse? Probably not.
The “garage or warehouse” dilemma highlights the first real benefit a 3PL provides: scalability. Because you use and pay for only the warehouse space and service level you need, you can keep your costs in check. As your business grows, you can pay for more storage space in your provider’s warehouse. Having a 3PL in your corner makes it easy to scale to meet growing demand.
Some companies use a 3PL until they make it big, and then they invest in their own order fulfillment operations. Others choose to stay with a 3PL to concentrate on other aspects of their business. It all comes down to a company’s business objectives.
But, regardless of your objectives, there are undeniable benefits of working with a Third Party Logistics Provider.
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.
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.