Along with the benefits of using an outsourced warehouse, there is much to be gained from the services of a third-party logistics provider (3PL). These service providers have the combined experience of their management teams and extensive knowledge in terms of supply chains and logistics. You can also evolve your logistic partnership over time, starting with the outsourcing of warehousing. We look at these benefits.
Flexibility
By outsourcing, you gain the unexpected bonus of more options, hence greater flexibility. Your 3PL has built up a vast e-commerce omnichannel distribution network that you get to leverage. This will lower the cost of keeping excessive inventory in stock. It also provides flexibility for customers who can make purchases through their preferred channels.
Capitalising on their economy of scale advantage, 3PLs have more flexible shifts, greater human resources, and knowledge of the chain through the ports to successfully navigate hurdles that can break a small company. You still benefit as your customers receive their goods in time and profit from savings that are passed on to consumers. All this happens under the banner of your brand, increasing loyalty and brand retention.
Inside the warehouse, your 3PL has the experience to streamline processes and handle seasonal variations in inventory.
Value-Added Options
Assembly and kitting are two examples of add-on services provided by 3PLs. In an assembly line, each person adds a new component before passing it on to the next person. This results in the final product having been assembled. Kitting refers to two for the price of one deals, where two identical items are packaged together, or two to make a set, like a shampoo and conditioner, for example. These activities require additional, trained staff and teams, as well as product handling and manual labour. This is not efficient for the smaller business to undertake.
As a third of garments ordered online are returned, you would need a returns processing procedure and staff to manage it and do the necessary to get it back into stock without messing up your inventory figures. The customer would have to be shipped an alternative, e.g., a bigger size, or given a refund. Your 3PL can handle all these aspects while you and your paid employees focus on your core business.
Cross-docking involves the 3PL receiving a product, and instead of sending it to storage to await the next step, moves it in line for distribution. Consolidation comprises sending many smaller shipments as one big load. This cuts down on shipping costs. These are just a few examples of add-on services you can benefit from with a 3PL. Speak to K2 Storage Solutions regarding their storage, picking, and packing service suite.
Other Ways to Benefit from a 3PL
If you want to make the most of shipping times, select a warehouse that has good access to a port. Alternatively, choose a 3PL close to an airport for deliveries by air. As products are already stored at the warehouse, dispatch will be faster. Your customers will thank you for the prompt service.
Hiring your own warehouse comes at a huge cost for rental, security, and staff. Outsourcing to a 3PL warehouse will only cost you a fraction of that for the space you actually use.
An outsourced warehouse will relieve you of a lot of headaches and lower your costs substantially while improving customers’ perceptions of your business.
Comments are closed.