The hidden perks of partnering with a 3PL
Partnering with a 3PL has many advantages – but not all are obvious. Discover 3 hidden perks in our article.
When managing a business becomes a full-time job, you need to start thinking about who to trust with some of its channels. That's why many businesses seek out professional logistics providers as the first step.
When a business reaches a certain size, partnering with third parties has clear advantages. Any good business needs teamwork, expertise, and – most importantly – enough time and resources to do the job well. Paying someone else to do a better, more efficient job than they can is the mark of a good leader with ambitions for the future.
The clear benefits of third-party logistics providers (3PLs) are:
Increased efficiency
Cost control
Time savings
Pretty obvious. But getting a third party to manage core business operations like shipping and delivery releases the most precious thing of all: a leader's time.
Trusting 3PLs with your shipping logistics can seriously improve the way the overall business functions, allowing you to focus on increasing brand awareness, market saliency and value to customers.
But let's get specific. What exactly can a third party offer a business that allows the partnership to deliver its key metric: providing value at the best price, as quickly as possible?
In a 3PL, expertise is everything
With the right mindset, most people can be anything – and do anything.
But there's a reason most will find a specialism, a niche or simply a path they prefer walking over another. When we focus on one skill, it becomes what we're best at – and then we can share that with others. Companies work the same way, and they need each other to succeed.
Whether they're in broad commerce fulfilment or specific markets, 3PLs are experts in their respective industries and have much broader oversight into it than a single company will ever have. From managing supply chain risks to securing better costs, a partnership with a good 3PL promises value beyond cheaper storage and shipping rates – and in greater proportions compared to an independent.
The right 3PL provider will know how to source quality parts and materials at competitive prices. Moreover, it can often help clients swap custom components with readily available ones. (It's not what you know, it's who you know.)
Not only is this great for the bottom line, but it can also be a lifeline for a business caught short on its regular supplies when markets face disruption. When hit with bottlenecks, delays and global crises (looking at you, 2020), everyone needs a friend in their corner.
Third parties offer scalable solutions
Let's revisit that key business goal: delivering the product or service as quickly as possible. From a shipping and fulfilment perspective, 3PL providers can increase the speed and scale of an operation almost overnight – with the infrastructure to sustain it.
Let's look at a few examples of how 3PLs can be more flexible and economical than internal fulfilment.
First, 3PLs can cope with seasonality. Maintaining stock availability when it's seasonally sensitive is costly – and even consistently high-performing commerce events are difficult to predict.
Just think of the Christmas season! The peaks will fluctuate year on year across Q4 – and it's sensitive to trends, meaning holding onto last season's stock isn't always going to create sales in the next. Many businesses have faced difficult decisions around whether to pay deep storage costs on overhanging inventory or let it go as waste.
A 3PL partnership balances a lot of this risk. Warehouse management solutions ("the tech") streamline operations and guarantee stock is flying through the door as quickly as possible while increasing visibility for tracking and predicting demands.
3PLs also take responsibility for recruiting, hiring and training a workforce that can manage the high-demand periods. That includes absences and insurance too – both of which can be complex (and costly) to manage internally.
In a similar vein, third-party fulfilment and distribution centres are ideal for businesses with a high SKU assortment.
Harnessing a 3PL means paying only for the space you actually need – and at better rates, as the costs are spread across multiple clients. This allows you to offset the costs of minimum order quantities set by suppliers and maintain a healthy portfolio of products to keep customers engaged.
Sustainability is important
Managing operations in bulk doesn't just keep costs low and efficiency high – when approached with sustainability in mind, high-level operations can be friendlier to the planet than small-scale ones.
This is because every step can be optimised and collaborative. Storage, shipping, base packaging and management resources are all shared across a portfolio of clients, meaning wastage is kept to a minimum.
Making packaging more sustainable is a critical target for most businesses, given the increase in customer demand for recyclability in both transit and product packaging. For that reason, it's by far the most tangible and attractive benefit of 3PLs that most will already be familiar with.
It can be tough for smaller businesses to choose the most eco-friendly materials for their stock when it comes with a significant hit to margin if bought in smaller volumes. And if some options require specialised machinery, they're cut out completely.
A 3PL doesn't have this problem. As an established provider, it has both the financial float and the storage capacity to offer a wide range of options that suit the individual needs of its client base. Remember that point about being experts in their industry? That even extends to the latest innovation in biodegradable bubble wrap.
But 3PLs address more than just the common sustainability concerns. Plenty happens inside the 3PL itself that clients indirectly benefit from. This could either be from their own balance sheets or from the peace of mind that comes from knowing their business is in the most responsible hands.
Warehouses themselves are highly optimised, particularly for key factors such as energy. Light, temperature control, machinery and security measures – all of it is costly and inefficient when conducted by independent businesses. However, when they're all managed in one place, by the same provider, conserving resources is far more achievable. (It also makes meeting regulatory standards for niche industries way easier. Bonus!)
Offering 100% bespoke fulfilment, Stowsafe is a third-party logistics provider trusted by a host of UK clients. Get in touch with a fulfilment expert today.
