Small Business 3PL Services
We have quite a few small to mid sized businesses that hit our site each month. Occasionally, they wonder if they’re large enough to capitalize on outsourced 3PL services. Furthermore, they wonder if they can actually afford to use a 3PL provider. We believe there are a couple of important factors to consider.
Are You Severely Limited on Cash Flow?
We fully understand that there are instances where there simply isn’t enough funding in the business to even pay a provider for their work. These are the rare cases where companies are literally living month to month and don’t have cash in the bank to pay a 3PL company. If this is the case, it might make sense to get to a financial point where you’re able to meet the financial ability to pay.
Can You Afford Not To Use 3PL Services?
If you’re not literally “out of money,” then we would tend to argue that perhaps you can’t afford not to use 3PL services. Here’s why we believe this so strongly.
- Unless shipping is your business, it’s not the most important thing that should be taking up your valuable time
- Every minute spent on shipping instead of other more important functions is lost momentum
- Sales and marketing, especially in these difficult times, is the lifeblood of your small business
Opportunity Cost of Shipping
If, as the manager or owner, you’re out shipping product, this is unbelievably valuable time that isn’t being spent on moving the business forward. Shipping is a part of the business that you can get a lower level worker to complete. And by not spending time on the shipping, you’ll be able to focus on more important things. You know what they say about sales…if your business isn’t growing, it’s shrinking. This couldn’t be more true when it comes to small business. In order to succeed, you have to focus an enormous amount of attention on growing your business. Any time spent doing tasks that can easily be outsourced is valuable time wasted, and therefore a huge opportunity cost.
Use as Much or as Little as You Need
Using an outsourced 3PL allows you to use as much or as little of their resources as you need. The challenge is on them to increase space if needed or hire additional staff. Similarly, in slower times, they’re required to let go of staff or re-negotiate leases. By outsourcing, you don’t have to think about these issues. For small business owners, cash is king. Outsourced 3PL’s allow you to hold on to more of your cash – and they oftentimes allow monthly payments which further helps with cash flow.
Should your small business use a 3PL Company?
Just because you run a small company doesn’t mean you shouldn’t go big. A small business that contracts with a 3PL company gains access to large-scale resources that it can‘t easily obtain on its own.
Cost of Doing it all on your own
Getting warehouses, staff, and information systems up and running requires a major investment. Most small businesses can’t afford all this entails. 3PL companies are able to do all of this for you. And because they are able to spread costs among all their clients, they are usually able to offer many time-saving and cost benefits to your business.
Too many Overhead costs?
Overhead costs take a big bite out of profits. “We were spending upwards of $10,000 a month for warehousing, transportation, and labor,” one of our past clients has said. “We were able to cut out many costs by using a 3PL company.”
Better Customer Service
Using a 3pl company that has good technology in place means your customers will get their products! Using local warehouses, customers get their products faster. And 3PL companies usually have support staff on hand that can not only answer your questions but also serve as a customer service support to your customers.
Find the Right Kind of 3PL Company for Your Start Up
But do keep in mind that not all 3PL companies specialize in helping start up and smaller companies. Be certain to search for 3PL’s with this type of focus, as many prefer to work with more established firms. Take time to explore different 3PL companies and see what cost savings they can pass on to you.