Online shopping is one of the fastest growing industries today. Everything from electronics to grocery is just a few clicks away. With several new online retailers coming up every month, e-commerce giants are also feeling the heat of such competition.
On the other hand, consumers are also becoming increasingly demanding. The consumer satisfaction ratio is going up. As a result, many online stores have started providing same-day delivery.
To ensure timely deliveries, e-commerce stores need to handle issues related to inventory, packaging, warehousing, shipping, and tracking carefully. Having a location near their core consumer base can help ensure speedy delivery. That’s where 3PL service providers come into the picture.
- Cost Reduction (Saving Time and Money)
Setting up a complete warehousing and shipping system from the ground up is a costly affair. Your business has to bear the burden of various costs including infrastructure, advanced technology, transportation, and employee compensation.
You will also need to invest a lot of time and energy into setting this up and running it every day. But, outsourcing this work to a pre-established 3PL organization will save your time and money.
Most third-party logistics companies also charge you based on your usage. If you have a warehouse of your own, you will be spending a lot of money on its maintenance and repair regardless of whether it is in full, partial or no use at all.
Similarly, you will also be paying for all your shipping, warehousing, and tracking technology and employees irrespective of their actual usage. So, hiring a 3PL service provider is the best way to save substantial money and time.
- Better Coverage
Setting up comprehensive inventory management and shipping system requires you to create a network of warehouses, couriers, and shipping centers across the globe, especially if you are going to serve a global clientele.
It is not only expensive but also time-consuming. A third-party logistics company, however, has access to a vast network of resources to meet your daily shipping and warehousing demands immediately.
A 3PL provider can quickly integrate your supply chain into the markets where your business doesn’t have an established presence. Thus, it offers better delivery coverage compared to your in-house warehousing system at a lower cost. You can grow your business without diverting your financial resources.
- Higher Consumer Satisfaction
A 3PL service provider can increase consumer satisfaction in two ways. It will allow you to focus on your core business activities and ensures efficient delivery. Many companies want to focus on what they do best which isn’t shipping and warehousing.
That’s why keeping your focus on in-house warehousing activities will undermine your abilities to deliver core services. For example, an online t-shirt printing business can focus on creating better and new t-shirt designs and strengthen product quality if it outsources the shipping to a third-party logistics company.
Plus, owing to their extensive resources and well-trained staff, a 3PL service provider ensures risk-free and timely delivery to your consumers. You can also get a host of value added services such as repacking, gift-wrapping, sub-assemblies, and just-in-time services to improve your consumer satisfaction considerably.
- Speedy Delivery
In the early days of e-commerce, consumers used to buy online to avoid standing in long queue at stores or driving to the nearest mall. It was all about shopping from the comfort of your coach. So, using snail mail or postal delivery services could work.
Today, however, customers need e-commerce retailers to provide same-day delivery or express delivery. But, a third-party logistics company can provide your business with speedy delivery.
They already have a well-established network of warehouses, advanced technology, and trained staff. They can keep track of a package from start to end and readily overcome international shipping issues. Plus, their credibility depends on delivering packages to the right place, at the right time, and in proper condition.
- Flexibility and Scalability
Many online businesses have to scale up and scale down their operations according to the market fluctuations. Your business will experience many busy and slow times during the year. For example, your orders will pick up during the holiday season.
Usually, a 3PL service provider will allow you to scale space, labor, and transportation according to your current inventory. Thus, you can rent out more warehouse space during the holiday season and less space during off seasons. They also offer freight or cargo consolidation.
If you have several small packages to be shipped to the same location, a third-party logistics provider can club them into one big package. It lowers the cost of shipping significantly. You can get access to several comprehensive logistics plans like this one at affordable rates and flexibility.
In recent years, your online business needs to deliver an order in a time frame and cost that customers want. Though e-commerce giants have financial resources, they don’t have to set up in-house logistics system. Third-party logistics providers can provide you with the perfect leverage in this changing e-commerce environment at a fraction of the cost. Hopefully, knowing how your business can benefit from a 3PL company will help you enlist their services soon.