If a business is looking to increase efficiencies or expand their global reach, many business owners find that using an in-house fulfillment system is more of a problem than a solution. It should then come as no surprise over 86% of Fortune 500 companies partner with at least one third-party-provider (3PL) to increase business efficiencies. With everything from scaling workforce to foreign regulation hassles, there are many reasons businesses chose to partner with a company that specializes in logistics.
All businesses benefit from the unique expert knowledge a 3PL brings to the table. A quality 3PL has not only the knowledge and experience to help businesses grow but is also equipped with best practices and resources to skip those awkward “teenage years” a business is in during its growth mode. A 3PL helps businesses with increased efficiencies and profitability as well. Here a few of the specific reasons why companies should partner with a 3PL.
Securing a warehouse in a foreign country is hard enough without factoring in international laws and regulations, currency issues, and labor acquisition. Managing a foreign warehouse from far away presents another set of challenges. To increase global reach, companies must find the perfect place, relationships, and partners all at the same time. A 3PL with an in-country presence knows all the local regulations and has long-term relationships with trusted vendors, partners, and local government officials to ensure success.
One of the most attractive benefits of partnering with a 3PL is cost efficiency. Instead of investing in your own facility and staff, 3PLs let multiple clients share the burden of space and labor costs, allowing for flexibility. You only pay for what you use, which is a considerable bonus for those companies who experience fluctuating inventory and labor needs from month-to-month. This reduces risk while increasing profits.
One of the most valuable benefits of partnering with a 3PL is scalability. As your space and labor needs increase, all you need to do is contact your 3PL. If you handled it personally, your company would need to hire, train, onboard, and maintain employees that you may not need to invest in for more than a few months. Your 3PL will also have a built-in reliable and high-quality workforce pre-vetted for you that is flexible with your current demand.
Personalized attention and visibility could be the biggest benefits 3PLs provide to their clients. A 3PL can significantly reduce the number of touch points needed to manage a supply chain effectively, thus you reduce costs and increase speed to market. They also have the latest technology and are up-to-date on the current industry and niche standards to ensure successful and above-board delivery. A great 3PL also actualizes distribution and storage procedures that are managed by a single entity, increasing accountability and putting an end to confusing and redundant communications.
Peace of Mind
When you choose the right 3PL, you can rest knowing your clients are in good hands. What elements make up the right 3PL? It’s a company with high-quality standards (check out ours here), understands your brand, and exceeds industry criteria to deliver the best service and fulfillment in the business. Third-party logistics providers also know how to handle unforeseen issues seamlessly and can remedy them quickly and without impacting the business or customers.
Partnering with a 3PL is a big decision and not one to be made hastily. Companies should ensure that their chosen 3PL is professional, reliable, affordable, follows all industry guidelines, and offers visibility to their clients. Merchandise Warehouse is just that company.