More and more businesses are turning to third-party logistics services (3PL) to help them streamline budgets while giving them a wider reach. These types of services have seen massive growth worldwide in the past few decades, in lockstep with the growth of online shopping and e-commerce.
Today’s online shopping experience wouldn’t be the same without the existence of 3PL services providing vital logistics to small and large businesses alike. Many smaller businesses and startups today are even totally reliant on 3PL services, as they may find it impossible to reach their target levels without outsourcing their logistics to a specialized company.
However, using a 3PL service isn’t without its risks. When a business chooses a logistics company, they are handing off a critical aspect of the company to an outside party. In many cases, this means that the 3PL will be communicating to customers and suppliers on behalf of their clients. 3PL’s may also have processes that are not always completely transparent to their clients. Either of these situations can have serious implications for the branding and bottom-line of the client if these risks are not managed.
This means it’s important for businesses, especially smaller startups, to choose their 3PL providers carefully. Here are some things to look out for when picking a 3PL provider.
1.) Customer service
Your 3PL provider should be ready to address the concerns of your company and those of customers and answer them clearly and concisely. Because the 3PL provider acts on behalf of your company, any errors reflect on your business rather than on theirs. This makes it critical to make sure that whichever assistance you choose delivers acceptable customer service levels.
One of the biggest reasons many larger companies have switched over to 3PL services instead of relying on in-house teams is that 3PL companies often have access to optimized IT systems to handle tracking and other important communications requirements as well as different inventories. More importantly, they have the specialization and expertise to use these IT systems effectively.
Choosing a 3PL service that has good IT systems isn’t just for your business’s convenience. It can help improve your customer’s experience by allowing them to have accurate expectations about their orders.
Different businesses will have their unique requirements that may not be properly addressed by a 3PL provider that takes a “one-size-fits-all” approach to logistics. Ideally, your 3PL provider must be willing to work closely with your company to come up with solutions that will benefit both your company and your customers.
4.) Service coverage
Your 3PL provider should be able to operate wherever you want to be able to market. While you can certainly use a different provider to service different markets, it just makes things simpler to have one provider do everything, especially if you’re running a small business.
5.) Overall value
The main point of using a 3PL provider is that they can deliver superior service levels at a lower cost to your company. The one you choose should be within your budget and also provide performance levels that you could not expect to reach working by yourself. If you’re a small business looking for high-quality 3PL services, then check out Red Stag Fulfillment.
Choosing 3PL providers is now a critical part of any small business’s checklist. Picking the right one can help a business expand into virtually any market while keeping expenses low. If anything, partnering with the right 3PL company can be the key to a small business’s success in reaching their intended markets.