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Creating a product that’s ready to be sold in the market is only half the battle in the world of business. When you’re willing to take your product to the market, the next step is to make sure you have a logistics warehouse prepared to receive and store your products effectively.
This selection guide on selecting a logistic warehouse will help you with everything from understanding what location factors are most important to your business to choosing the best 3PL Logistics Warehousing Companies provider based on other factors.
An Overview of 3PL Logistics Warehousing Companies
Used interchangeably with fulfillment warehouse or fulfillment center, 3PL stands for third-party logistics. It is a company that handles all of your warehousing, order processing, and shipping requirements.
The main goal of any third-party logistics company is to become your one source for handling everything involved in the shipping, receiving, tracking, and other logistical needs of your business.
3PL Logistic Warehousing Companies are more cost-effective than having an in-house logistics team that will save you time and money.
Many businesses contract with multiple 3PL Logistics Warehousing Companies so they can compare services depending on individual shipping needs.
How Do Location and Size Play a Vital Role?
With so many 3PL Logistics Warehousing companies today, it can be difficult for small business owners to decide on one that will work best for their business.
When considering 3PL Logistics Warehousing Companies, size should be an essential factor. Mentioned below is a general list of questions for your checklist –
- How many square feet do you need?
- What type of layout do you prefer?
- Do you need forklift capabilities?
- Do you have restricted access requirements?
- Do you require a temperature control or cold storage facility?
- Are there any security issues or concerns?
- Are there any shipping and receiving issues with your location?
- Will your employees pick items from inventory, or do they just place orders?
- Is your product line seasonal, or does it change frequently?
- What are your volume expectations over time?
These questions can help determine which 3PL Logistic Warehousing Companies are right for you.
What are the Benefits of Using a 3PL Warehouse?
Using a 3PL provider offers a lot of advantages, 5 of which are mentioned below –
1. Cost reduction – 3PLs have more leverage with freight companies than individual shippers do. Working with carriers on behalf of multiple customers, 3PLs can negotiate pricing based on volume and order frequency.
2. Scale up or down as needed – Most businesses experience fluctuations in demand throughout the year. Using a 3PL allows you to manage peaks and troughs more effectively without having to commit to capital when you don’t need to.
3. Provide a better customer experience – Customers expect next-day or same-day shipping as standard. Using a 3PL provider allows you to offer fast shipping no matter where the order is being sent, thanks to having access to the 3PL’s wide distribution network.
4. Test new markets – With an international 3PL, you have the flexibility to test the waters in new markets without having to commit to any major investments like your own warehousing space or staff.
5. Mitigate risk – Shipping delays can and do happen for a number of reasons. When unforeseen circumstances pop up, a 3PL is responsible for making alternate arrangements to fulfill your orders as quickly as possible.
Which 3PL Company is Right for You?
Here are a few things for you to consider when choosing your 3PL partner:
1. Current and forecasted volumes – Choose a 3PL that can handle your current volume, but that also will be ready to handle your volume if you suddenly add a bunch of new stock, increase your stock volumes, or have a great spike in sales.
2. References and Business Performance – Check out references from other customers that use the 3PL provider and get a report on the company’s performance over the last few years. Seek out references and information about on-time deliveries versus delays, and how they compensate businesses when there are problems.
3. Advanced technology – If you’re a technology inlined company, you will probably choose a company that is similarly cutting-edge and ready to integrate with your stock control software. Ensure that the 3PL provider’s technology works with how you work.
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