6 Signs Your Ecommerce Business Needs a 3PL Partner
Why You Need 3PL Partner?
Experiencing rapid growth as an eCommerce company is a great sign. Your current fulfillment process may involve manufacturing or receiving goods, storing them in your office, and packing them into mailers. However, as your business expands, the rush of orders can make it difficult for your team to keep up. If this sounds like you, a third-party logistics company or 3PL can prove to be an asset.
3PL companies provide distribution, warehousing, and order fulfillment services. They allow eCommerce companies to outsource their entire supply chain process or a part of it. Scaling your business becomes more accessible with logistics experts on your team.
While there is no magic number that signals when you need a 3PL, there are some telling signs.
Your Customer Base is Growing Fast
Every business aims to cultivate a large customer base that loves their product. However, as more orders pour in, you may find yourself ill-equipped to satisfy the demand. It is easy to ship a few products each day when your business is small. As the numbers climb higher, the time, space, and manpower needed for order fulfillment will become much more substantial. This is when a third-party logistics company can take that burden off your hands so your company can continue to grow without limitations.
Your Fulfillment Process is Slow
Slow processing times can affect the perception of your brand and reduce repeat orders. If you are understaffed, unorganized, or running out of stock, your processing times will be impacted. Your customers may start complaining about long shipping times, while others may cancel their purchases altogether. A slew of negative reviews can kill your momentum. When your order fulfillment drops to this level, a third-party logistics partner becomes necessary.
Your Processes are Becoming Complex
Your business can suffer if your processes become too complicated to handle effectively. The potential for error increases the more elaborate and convoluted your systems become. Instead of running a huge business with a small number of employees, it's best to look to a 3PL that can make your business more manageable. 3PLs specialize in streamlining the processes involved with order fulfillment for speed and accuracy.
Your Employees are Working Too Hard
When your employees are overburdened and working long hours, their productivity decreases, and they may start to make mistakes. When errors occur, more time and resources must be spent remedying them. If you have reached this point, it may be time to call in the pros.
Shipping is Chipping Away Your Profits
Hiring a 3PL can reduce your costs. When you partner with a 3PL, you gain access to lower shipping rates. Fulfillment centers have higher shipping volumes and more leverage to negotiate lower rates with shipping carriers. Fulfillment specialists can ensure your operations are completely optimized. Overall, it can be a much more cost-effective solution than fulfilling orders in-house.
You are Running Out of Space
When you house your own inventory, chances are you will eventually start running out of space. Renting a new building will increase your costs and complexity too. A simpler solution is to have a third-party logistics company store and handle your products so you can focus on manufacturing and/or selling them. 3PLs already have the warehouse space, equipment, and staff necessary to manage your inventory.
Growing eCommerce businesses can benefit from partnering with a 3PL. Outsourcing order fulfillment is cost-effective and allows eCommerce businesses to continue to grow and scale. However, it is important to pick a company that suits your businesses’ needs. Not all 3PL companies are made equal. So, look for a company that makes working together stress-free and profitable.
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