One of the most exciting— and challenging— aspects of small business ownership is navigating growth and adapting to change. In the early stages, business owners embrace the smallest of tasks and adopt a do-it-yourself approach, from ordering or manufacturing inventory to packing and delivering orders (and everything in between). But they eventually reach a point where it becomes impossible to do it all and still be able to focus on growth. As thrilling as success can be, it forces you to move out of your comfort zone when you find yourself faced with the prospect of relinquishing control of day-to-day tasks. If you’re reluctant to do this, it helps to take a step back and look at the bigger picture. What are your long-term goals? How far do you want to take your business?
The fact is that outsourcing some aspects of your eCommerce business can free up valuable time— time that you need to grow it. You may have started out small, but you don’t need to stay there.
And that’s where 3PLs come in.
What is a 3PL?
A third-party logistics (3PL) partner is a shipping company that has the tools and processes to handle some or all of your business’s supply chain and logistics operations. These shipping companies support your business by allowing you to outsource warehousing, inventory management, packaging, picking and packing, eCommerce fulfillment, and shipping, while also providing essential logistics services such as transportation and freight forwarding.
Signs you should consider partnering with a 3PL partner
Whatever your product category, and no matter what eCommerce platform you use, you can benefit from outsourcing fulfillment to a shipping company. But are you there yet? Has your business grown enough to warrant this transition and expense? If any of these signs apply to you, the answer is yes.
- You’re shipping 100+ orders every month— or your order volume has increased and you simply can’t keep up with packing items, printing labels, and dropping off packages at the post office. Maybe you’re staying up late to catch up on orders, or asking family and friends to help you meet demand. Either way, this becomes a problem when you focus all your energy on low-dollar activities instead of growing your business and generating revenue. If you’re swamped by packing and shipping tasks, you’re missing opportunities to develop new products, market your business, and expand your customer base.
- You’re running out of space. If you’re fulfilling from home, you may find yourself storing more and more inventory in your garage, basement, or living space to keep up with demand. This not only makes it more difficult to stay organized but also limits your growth; at one point, you stop thinking about developing your product line for a lack of storage space. By outsourcing your warehousing and eCommerce fulfillment to a shipping company, you’ll be able to expand your product offering without worrying about where you’ll store it, all while managing your existing inventory more efficiently.
- You’re thinking of offering free 2-day shipping. Expedited shipping is becoming an expectation, and you want to compete with giants like Amazon by offering your customers free 2-day shipping. But if you’re fulfilling orders yourself, this shipping option can really start to eat at your margins. Because 3PLs have high-volume partnerships with multiple carriers, they offer more competitive eCommerce shipping rates than you can get on your own— making free 2-day shipping services more affordable for your business.
How shipping with a 3PL can benefit your business
1. Lower eCommerce shipping costs
Shipping companies can negotiate costs with multiple carriers thanks to the volume discounts available to them, passing these savings to you. The sol platform lets you compare and choose from competitive rates across all tier 1 carriers, allowing you to ship domestically or internationally at the fairest available market rates while leveraging a menu of innovative shipping services and solutions.
2. Industry expertise
Because shipping companies specialize in logistics, they have unparalleled expertise in the industry and an in-depth understanding of shipping operations. They take on the responsibility of risk management and quality assurance, ensuring that processes are as efficient as possible and optimized through every step of the supply chain. By partnering with a reputable shipping company, you stand to acquire significant gains from their experience and knowledge of what eCommerce shipping services are best suited for your business. If you’re shipping internationally, shipping companies can also give you insight into complex issues such as documentation, customs, duties, and various shipping regulations and protocols.
3. Customized solutions
A shipping company’s extensive network gives you access to a multitude of innovative shipping services, from which they can create a plan tailored to your specific needs. This resource network can expand your supply chain quickly, efficiently, and cost-effectively, bringing you timelier service and lower overhead costs.
How fulfilling a 3PL can grow your business
1. Lower capital investment
Partnering with a shipping company to fulfill orders eliminates your need for a warehouse and fulfillment space, as well as order fulfillment and inventory management software. This brings your overhead costs down, freeing up funds in your budget for other aspects of your business. And because you’re no longer storing inventory in your own warehouse, your transport costs are decreased, bringing eCommerce shipping costs down for your customers (and encouraging them to return to your store to save on shipping).
2. Lower labor cost
Although shipping companies do charge fees for their services, they actually lower your expenses by eliminating your need to hire staff to pick, pack, and fulfill orders.
3. Performance gains
Fulfillment services provided by shipping companies can lead to improved performance. That’s because 3PLs have processes in place to optimize your order fill rate while improving order accuracy. These streamlined processes not only reduce your costs but also increase customer satisfaction.
4. Time savings
Outsourcing eCommerce fulfillment to the experts is a practical and affordable way to save time and resources. By getting the logistical details out of your way and putting them in the hands of professionals, you can shift your focus to productive activities that will actually grow your business, such as marketing, sales, product development, and customer service.
5. Greater flexibility
The holiday season can be a logistical nightmare for businesses that handle their own eCommerce fulfillment and shipping. As order volume increases during busy periods, so does the risk of failing to fulfill orders in a timely manner. This is stressful for business owners and incredibly frustrating for customers, making it bad for business. But with a third-party logistics partner, you’ll have a team in place ready to take on the holiday rush and get your packages out the door on time, every time. This is because shipping companies can scale space, labor, and transport depending on changes in your inventory. Whether you’re dealing with seasonal stock or launching a new product, 3PLs have the ability to meet your space and labor requirements during both busy and slow times of the year.
6. Market Expansion
Shipping companies make it easier to expand your reach to new areas and markets. There’s no reason to limit your business’s potential; since 3PLs have a network of fulfillment centers in major cities, they can position your supply chain in areas where you don’t have an established presence. Working with a shipping company gives you the opportunity to position your company strategically, making a larger customer base more accessible than ever.
What to consider when choosing a shipping company
1. Business volume
Assess your business’s typical inventory and order volume, then pick a shipping company that’s equipped to handle your operations and has the flexibility to scale them.
2. Technology
Choose a shipping company that has the technology to seamlessly integrate with your online store, so that orders can be automatically imported and fulfilled at the warehouse. The eShipper platform does just that, with advanced software that automatically handles everything from order and inventory management to order tracking and returns.
3. Fulfillment center location
Find out how many fulfillment centers a shipping company operates, how much warehouse space it manages, and where each one is located. This impacts your customers’ shipping costs and speed of delivery, so get the information you need to set the right shipping strategy for your business.
4. Customer service
You need a shipping company that truly is a partner for your business, so make sure it has an efficient customer service team that is readily available to you whenever you need support. When you join eShipper, you’re assigned a dedicated Account Manager who you can reach out to directly with any concerns or questions. This takes the guesswork out of your logistical operations and brings you peace of mind, knowing that you have a point of contact to help resolve any potential issues.
