3PL (or Third Party Logistics) providers could have many advantages or disadvantages for your business, to 3PL or not to 3PL that is the question for many businesses.
Speaking as a 3PL provider we get to see the real day to day advantages for our customers, although we appreciate the initial worries that customers have when enquiring about outsourcing to a 3PL provider.
When a company comes to us for a quote the vast majority have not yet made the decision to outsource to a 3PL but want to get further information on prices and whether the move would be right for them. Understandably many companies are worried about passing their operations to a 3PL provider and why wouldn’t they be? After all, fulfilling all operations in house means complete control over their supply chain. But is it possible to have the advantages of outsourcing your operations to a 3PL provider (such as reduced overheads) but to not lose control of your business.
Losing control of your supply chain operations could have a catastrophic impact for a business. For example, if orders aren’t fulfilled in a correct and timely manner then customers may leave bad feedback and may well not buy from you again, maybe even switching to another supplier. How will you know when stock is low, if you can currently keep a physical eye on stock and reorder where appropriate?
This is where a 3PL system steps in, here at Vdepot we have a real time online system allowing our customers to access details about their business 24/7/365. Different 3PL providers have varied systems and so it is important to ensure that the 3PL provider that you may decide to partner with has a system that allows you to stay in control of your supply chain at all times.
Not only will a 3PL system allow you to stay in control, it may give you more information than you currently have. Many 3PL systems will give a varied number of reports, having access to information you did not have before may allow you to make better informed decisions.
A 3PL’s system may be key to keeping you in control but this can be perceived to cause further problems. Some clients who don’t have a system may like it that way, others who may already have a system may be worried about integrating the two. This is where the 3PL’s service comes into effect. Some like Vdepot offer an account manager who can give you full training on the system by sharing screens online. If you already have a system, then it is important that you choose a 3PL that can seamlessly integrate the two. Here at Vdepot we created our system from the ground up and can therefore integrate with almost any system on the market. By having seamless system integration with your 3PL ensures that orders can be pulled from any of your sales channels without you having to lift a finger.
So how does a 3PL system allow you to stay in control? Well the reports it produces should give you the visibility to stay in complete control. For example, you may be able to set up reorder level alerts. This means that when your stock reaches a certain level an email will be sent to you advising you of the stock level, reminding that you should reorder. Reports should also be able to show your quickest and slowest moving items meaning that it is easier to manage your range of products being able to make informed decisions based on fact, not guesswork.
If you’re still undecided on whether to pass your fulfilment on to a 3PL it may be beneficial to outsource a small number of products, typically the items with the biggest throughput. By trialling a few products first you get to understand the benefits before having to make the big jump of outsourcing completely. You can then move more products over to them as you feel comfortable. Many 3PL’s like Vdepot allow you to trial a few lines first and may even offer favourable terms as a trial period to really allow you to see the benefits of outsourcing.
So whilst we appreciate that outsourcing would your operations to a 3PL is not for everyone, and may not make economic sense if you have a very low throughput of orders of low value items. But for the vast majority of companies it make perfect sense to hand their operations to an expert 3PL. Having worked in the industry sense the internet retailer revolution, here at Vdepot it gives us great pleasure to see our customers pass on their operations to us which in turn has allowed them to concentrate on their core business, grow and fulfil their full potential.