How To Expand Your Business Through A 3PL

Redbird Logistics Services > Supply Chain > How To Expand Your Business Through A 3PL

With the world slowly emerging from the COVID-19 pandemic, many organizations are looking to grow and expand by offering new products into different areas of the market. Under today’s social distancing measures, more and more consumers are turning to online purchases in favor of the more traditional methods. In fact, there’s been a 129% year-over-year growth in US and Canadian eCommerce orders as of late April, with an impressive 146% growth in all online retail orders. It’s also estimated that by 2022, eCommerce retail in the United States will grow to $638 billion, as compared to $409 billion in 2017.

Taking these market trends into account, while aiming to satisfy their eCommerce fulfillment and their customer demand, businesses need to decide whether to outsource their order fulfillment and transportation processes to a third party. To do so, they will need to employ the help of third-party logistics (3PL) providers, which will handle the supply chain side of the company.

There are several ways through which third-party logistics providers can help you grow your business and help you gain a competitive advantage.

What is a 3PL Company?

3PL businesses will handle every aspect of their clients’ distribution network. This will include everything from fulfillment and transporting services, supply chain management, transportation management, inventory management, shipping audits, as well as risk management, shipping, and delivery monitoring. Depending on your needs and the capabilities of the logistics provider, 3PL operations can also include domestic and global trade, customs brokerage, trade compliance, etc.

In an attempt to streamline their supply chains and achieve rapid growth, more and more businesses are turning to the third-party logistics industry to oversee their supply chain operations. When paired effectively, the logistics company and its 3PL customers will stand to gain a mutual benefit. In short, third-party logistics providers will help their clients by providing a competitive advantage, improving their services, increasing the customer base, and lowering the overhead costs.

How to Expand Your Business Through a 3PL

Companies looking to experience business growth need to make use of synergy wherever they can get it. Luckily, the 3PL industry can provide this benefit. When partnering up with a logistics provider, organizations will be able to take advantage of several key assets that 3PLs have to offer. Among these, we can include the following:

Expand Your Business Through Their Expertise

Great logistics providers can and should add superior value to your supply chain. Their experience, tools, scaling possibilities, and general know-how is what they bring to the table. Professional and reliable 3PL providers will help grow your business by sharing their extensive expertise with you. Their experience is beneficial in all circumstances, but it’s even more so if you decide to jump into a new geographic market but aren’t sure how to get your products into the hands of your customers as quickly, as safely, and as efficiently as possible. Experienced 3PLs will be in the best position to provide you with shipping services in that exact location.

When you’re in the market for a 3PL to partner with, always look to receive every bit of experience they have to offer. This should not be a one-time thing but a continuous improvement throughout your entire collaboration. A solid relationship with a 3PL will need to help you leverage your supply chain as a competitive advantage by not only maintaining but also expanding your customer base. So, no matter what issues you are facing while scaling your business, be it staffing, warehouse management, or maintaining good customer relationships, your 3PL partner should have the necessary expertise to guide you on the most effective path.

Lower Your Overhead Costs

When you’re looking to expand your organization, you can expect that your overhead costs will also increase. This is aside from all the initial investments you need to make in terms of new tools, technologies, equipment, physical facilities, and manpower. Third-party logistics providers will help you with your rapid growth without needing to compromise too many internal resources.

One of the biggest of these is staffing. You wouldn’t want to hire someone until you are, at least, fairly certain that you can support their wage. With a 3PL partner, you don’t have to worry about these issues as they will bring their own personnel. If, for instance, you need some extra manpower for a sale, your logistics partner will simply allocate some of their employees to manage your business needs.

The same thing will apply if you need to rent more warehousing space. Instead of setting aside a sizable chunk of your revenue every month on rent alone, you can take advantage of a 3PL warehouse and expand your stock in a matter of days or even less. Put simply, working with a 3PL will help avoid many of the costs associated with the purchase and implementation of supply chain tools, technologies, and manpower, as well as the overhead that comes with it.

Better Flexibility

Businesses will also be able to expand their operations through 3PLs by making use of their on-demand services. There are many organizations out there looking to cut costs by removing their transportation and warehousing assets. Some of them do so as a means of fine-tuning their operations when introducing a new product to the market. Say, for instance, an organization has many seasonal products and will be expecting to sell most of them during the peak season, be it during the holidays or, in the case of fresh produce, during the warmer months of the year. They can call upon their third-party logistics provider to scale everything from space, labor, and transportation to accommodate the increased demand. The same thing will also apply whenever a business wants to make use of a new trade channel, such as eCommerce, or expand into new geographical regions.

Leverage Better Customer Service

Improving customer experience should be a top priority for any organization, regardless of its industry. Achieving a higher level of customer service, however, requires a lot of additional time and resources. Yet, by working together with a 3PL, customer service can be improved in only a fraction of the time. According to a 2020 study, some 83% of shippers and around 98% of 3PL businesses reported that their partnership has led to an improvement in the overall level of customer experience provided.

Make Use of State-Of-The-Art Technology

Another way to expand your business through the help of a 3PL is by making use of their technology. While the majority of organizations relied on paper-based inventory and route guides in the past, today’s transportation and warehouse management systems are completely digitized and automated. By partnering up with a professional 3PL, you will also be adopting the latest technology in the industry, which is something you would have, otherwise, had to invest in by yourself. 

Put simply, this collaboration will help lower costs, improve your supply chain integration and customer experience, bring products to market faster, increase inventory turns and global capabilities, and adapt to market changes quickly and more effectively.

If you are looking to partner with a world-class 3PL, Redbird Logistic Services can help!!  Contact us today!

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