A third-party logistic company is a business that provides warehousing and fulfillment capabilities to other organizations. The 3PL model works well for a number of companies, but there are some specific cases that are usually the best. If your operation has any of these 5 characteristics, you might want to contact a 3PL warehouse.
Limited Storage Capacity
Not every location is great for warehousing and fulfillment purposes. For example, a manufacturer may sell its products directly to consumers. This can be exceptional in terms of the supply chain, but it also means holding onto sufficient inventory for fulfillment. By moving the fulfillment side of the operation to a 3PL setup, the manufacturer can dedicate more space to creating products. If space is at a premium, such as in a city with expensive rent or land prices, a 3PL warehouse could be the most cost-effective option.
Some businesses don't do enough transactions throughout the year to justify maintaining warehouses. However, they may need to ramp up during certain seasons to satisfy customer demand. A company that makes Halloween costumes, for example, probably doesn't get a lot of demand for its products in March. Come September and October, though, it needs to be ready to go. Seasonal businesses can often keep costs down by using the 3PL model.
An internet-only retailer often has less need to maintain facilities of any type. Consequently, an e-commerce business may be better off working with a 3PL warehouse. Especially if they need to reach customers nationwide, a well-located 3PL system can often get products in transit faster.
Using 3PL for fulfillment also allows e-commerce businesses to focus on what they do best. Rather than paying for extensive warehousing and fulfillment processes, they can outsource the job.
Specific Storage Requirements
Plenty of products need to stay in ideal conditions until they ship. A healthcare business might have testing kits that are light- and temperature-sensitive, for example. Developing warehousing capabilities to these requirements is rarely an easy task. However, a 3PL services provider may have the climate-controlled storage facilities necessary to do the job well.
Working with a small team can be great, but it also can become back-breaking work if everyone has to pitch in for fulfillment. Employing 3PL techniques will take the burden off a small staff. You can focus on product development, branding, and manufacturing while the 3PL company handles storage and shipping.
For more information about 3PL services, contact a local company.