What is 3PL?
The term 3PL has become more common in the business world, especially for small businesses and entrepreneurs. Third-party logistics, or 3PL for short, is an outsourcing method in which a business entrusts its shipping needs to a third party for distribution, warehousing, or fulfillment services. Let’s explore what exactly logistics are and how they are used in business today. Then we can look at some of the ways that 3PL can benefit your business, which can be as big or as small as you want them to be!
Logistics
Logistics refers to the movement of goods from Point A to Point B and the overall process of how resources are acquired, stored, and transported to their final destination. This includes transportation, warehousing, picking, and packing goods/items. Logistics management involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility. Third-party logistics are when an outside party, or company, handles the logistics of a business.
3PL Services
Many small businesses opt for using a third-party service provider to manage their shipping needs instead of operating internal freight and trucking departments. The main benefit that comes with using third-party logistics is access to greater resources than what’s available in-house. For example, if you own a small clothing manufacturing company and need to get your products from your factory to your customers as quickly as possible, you can outsource these shipping services through a third-party logistics (3PL) provider. This way, you can focus on growing your business without having to worry about managing expensive equipment or hiring experienced staff members.
3PL companies offer a variety of services to help entrepreneurs scale their businesses. These services include, but are not limited to transportation, warehousing, picking and packing, inventory forecasting, order fulfillment, and inventory management. In addition to these important functions, some 3PL companies offer other value-added services such as product handling and customs packaging. Some third-party logistics companies even provide access to certain additional benefits like credit card processing and shipping insurance.
Benefits of 3PL
There are many benefits of having a 3PL service handle your logistics. Some of these benefits include cost reduction, saving time, mitigating risks, the ability to scale up and down as needed, and improving the customer experience. Some 3PL companies may even offer additional services such as custom packaging materials. In this blog, we will be focusing on the benefits of cost reduction, saving time, and improving your customer’s experience.
Most small e-commerce businesses initially try to fulfill their own orders internally but quickly outgrow their space and operations. With their volumes of orders climbing, many of those small businesses shift their logistics and fulfillment over to a 3PL company to reduce the space, processing time, number of employees, and additional time needed if they were to continue to handle the fulfillment on their own.
Prompt Shipping
If your small business is relying on deliveries and shipments as part of your daily operations, it’s important to find a logistics provider that can help you streamline your delivery process. While there are many benefits to using a 3PL, knowing exactly how they can benefit your business is key in deciding whether or not they’re right for you. For example, with a 3PL, you may have more specialized drivers and vehicles dedicated to making regular trips to pick up and deliver packages from multiple customers. Additionally, many third-party providers offer flexible solutions that can adapt to changing market conditions based on changes in demand.
By using a 3PL, businesses can take advantage of economies of scale, reduced costs, and increased efficiency. Companies that outsource to a 3PL save time and money in their supply chain management. They also experience higher inventory turnover because they have easy access to multiple shipping locations, depending on the size and scope of their business. If you’re looking for a way to lower your costs, avoid stock-outs, and increase your sales volume all at once, you might want to consider outsourcing your logistics services. By selecting an experienced and well-established provider for these services, you could see a positive return on investment almost immediately – all while growing your business with peace of mind. With so many benefits to outsourcing your 3PL services, it’s no wonder so many companies are choosing to do so.
As a small business owner, you know that time is your most valuable asset. In some cases, shipping certain kinds of goods can take up a lot of your precious time. By partnering with 3PLs like American Logistics and Packaging Co., you’ll be able to free up your time so you can focus on what matters most — growing your business and taking care of customers.
Cost Reduction
Working with a third-party logistics provider (3PL) is typically far more cost-effective than building out an in-house team from scratch. But there are also many reasons why it makes sense for small businesses to maintain control over certain aspects of their supply chain. For example, if you have a unique product that requires special packaging or handling, it may be better for you to handle those processes yourself rather than handing them off to someone else. There’s no one right answer when it comes to deciding whether or not you should use a 3PL company—it really depends on your specific needs and goals for your business moving forward. A good way to think about it is by asking yourself what you want your company’s focus to be: Are you looking for ways that will allow you to grow quickly? Or do you need assistance scaling up so that your products can reach more customers?
Using a 3PL service can help you with cost reduction in a few different ways. Since 3PL companies specialize in logistics, they have a more extensive network, an ample amount of space needed, and a team to take care of each step of the process. How would this help reduce costs on your end?
The 3PL company:
- Has ample warehouse space so you do not need to invest in another property just to store your products.
- Already has experienced staff members that handle each step of the logistics and fulfillment process, so you do not need to hire additional employees to maintain and monitor your warehouse, packaging, logistics, and fulfillment departments.
- May also have access to lower transportation costs as they deal with shipping and receiving packages, products, and orders daily.
- Shipping costs alone can become the single most expensive and challenging element for small e-commerce businesses.
Saving Time
Saving time is another significant benefit of using a 3PL service. Your time is important and valuable, and by allowing a 3PL company to handle your logistics, you can focus your time and energy on sales. Most small e-commerce businesses lack the time, space, or manpower to handle the rest of the supply chain procedures after the sale is made. This can lower the number of sales as the focus is taken away from selling the product and put towards trying to figure out how to store, pick, pack, and ship the products that have been sold.
Better Customer Experience
The customer experience is one of the most important aspects of any e-commerce business. Business owners want the customer to have a smooth and positive experience every time they purchase a product/item, so they have a better chance of recommending the business, writing a good review, and being a repeat customer.
Outsourcing your shipping, packaging, order fulfillment, and logistics to a 3PL company really helps improve the customer’s experience in a few different ways. First, if you are using a 3PL to handle your order fulfillment and shipping, your product will get picked, packed, and shipped in a timely manner once the order is placed. Customers expect their order to be delivered to them in a timely manner which is not always the easiest for a small business with minimal employees! It takes time to get the order ready and get out for delivery on top of handling all other pieces of the business.
Another way that using a 3PL company can help the customer experience is that you can focus more time and energy on sales and customer service instead of having to juggle multiple roles as well as ensuring the order has been shipped in a timely matter. If a small business owner were to take on that responsibility themselves, they would have to step away from production, marketing, or sales to ensure that the correct item was picked, that it was packaged correctly, and then to find the time to transport that package to the carrier and get that order shipped out. When using a 3PL service, an employee is already assigned to take care of the order fulfillment for you in a sensible manner without you having to step away from any other aspect of your business.
Conclusion
Overall, using 3PL services is a game changer for many businesses of all sizes. Many of these businesses have figured out that it just doesn’t make sense to devote so much extra time, resources, and employees to in-house logistics. In the end, it is cheaper to outsource logistics to a 3PL company than to deal with the continuous headache of handling it in-house. The cost savings, time savings, and ability to put more effort into sales and customer service as a whole makes up for the small price of using a third-party logistics company. That’s where we come in. American Logistics and Packaging is here to help you with all of your warehousing, fulfillment, and logistics needs.
Services Offered by American Logistics & Packaging
American Logistics & Packaging is a warehousing, logistics, and packaging company based in Sauk Rapids, Minnesota. Some of the services offered by American Logistics and Packaging include:
Warehousing
- Palletizing
- Oversized Pallet Handling
- Handling In & Out
- Forklift Operator
- Warehouse Manager
- Truck Pickup & Delivery
- UPS Scheduling
- Commercial Carrier Pickup & Delivery
- Warehouse Customer Access
- Pallets for Purchase
- Shipping Paperwork Sending
- Monthly Inventory Reporting
- Lot Tracking & Labeling
Kitting
- Receive, sort, and assemble kit components
- Manage preassembled inventory
- Create professional packaging materials
Order Fulfillment
- 24-72 hour fulfillment time
- Seamlessly manage Pick, Pack, and Ship Orders
- Realtime order status and tracking visibility
Interested in 3PL?
Many warehouses in the region are completely full, causing delays in responding to your needs. Our exceptional customer service sets us apart. We’re here to help with any questions you might have and to help you navigate our quoting process. Don’t miss out on the benefits available to you.