So, you’ve decided that your supply chain needs a little help. Maybe you’ve got too much work for your in-house team to handle, or maybe you’re just looking for someone with more skill than you have.
There are a lot of reasons you might find yourself in this situation, but the solution is always pretty clear: hire an expert. 3PLs (third-party logistics providers) specialize in warehousing and distribution. They have the infrastructure and knowledge to get your products where they need to go – on time and on budget.
For a look at 3PL warehousing and how hiring one can help improve your supply chain, read on.
What Is 3PL Warehousing?
A 3PL can provide warehousing services for your wholesale products, manage all aspects of your inventory system, and even help you develop the processes necessary to ship orders from your store on time.
This means that when someone places an order through your eCommerce website, the 3PL will receive the order and store it in one of their warehouses until it’s ready to be shipped out.
3PL Services vs. Drop Shipping
Drop shipping is a product-based business model that allows merchants to sell their goods without having to store or ship the products themselves. When you drop ship, you place an order with a supplier, who then ships to your customer on your behalf.
3PL services offer more flexibility than drop shipping because they allow you to outsource all aspects of logistics, including warehousing and shipping. Unlike drop-shippers who have limited control over the process, 3PLs provide the additional benefit of greater oversight over storage conditions and quality control during storage and transit.
Why Choose 3PL Warehousing?
3PL warehousing offers several benefits to businesses that want to outsource their storage and fulfillment needs. These include:
Save Time and Money
One of the most important benefits of 3PL warehousing is that it can save you money by reducing your overhead. You’ll no longer have to worry about rent, maintenance costs, and equipment purchases for your warehouse. A 3PL provider can also help you reduce your staffing costs and avoid payroll taxes.
Improve Your Customer Service
With a 3PL partner, you’ll be able to offer more shipping options, shorter lead times, and faster delivery at lower prices than you could if handling shipping on your own. You’ll also be able to offer better customer service by responding more quickly and effectively to customer queries, as well as tracking orders. Your customers will appreciate having access to accurate information about the status of their orders.
Get the Right Products to the Right Customers
With a 3PL partner, you’ll be able to take advantage of their years of experience and relationships with freight forwarders, customs brokers, airlines, trucking companies, and others in the supply chain.
You can also get a leg up on your competitors by taking advantage of their global footprint and selling products in markets that are otherwise inaccessible. Your 3PL might even help you find new products for specific regions and give you the ability to test your ideas before making an enormous investment.
Expertise in Logistics Management
Third parties generally have more experience handling inventory than many small businesses do; therefore offering valuable industry-specific knowledge. They’ll know how to move your product in the most efficient and effective manner possible, whether by rail, air, or sea.
How Does It Benefit Your Business To Use A 3PL Warehousing Company?
You might think to yourself, do I really need to outsource my warehousing and logistics operations? The answer is maybe. It depends on many factors unique to your business, including size, product mix, growth plans, and more.
However, there are some general benefits that usually make working with a third-party logistics provider in China the right choice for most businesses.
By outsourcing some of your operations to third-party logistics companies, you’ll be able to reduce the amount of risk involved in doing business overseas without sacrificing any of the benefits associated with having a Chinese presence(accessibility, increased market share, etc.). This is because these providers have the experience, infrastructure, and local knowledge needed to help you navigate China’s unique business environment.
When a single company handles all logistical processes for error. This allows your business to run more smoothly, freeing up time and resources that can be better spent elsewhere. And with most third-party logistics companies, you’ll also have access to state-of-the-art equipment, which will allow them to handle all of the heavy lifting so you don’t have to.
When outsourcing logistics services, companies can focus on what they do best while leaving order fulfillment to another team. This means that your company will be able to get more done with fewer people – which increases overall productivity for everyone involved.
How 3PLs Handle Order Fulfillment
Once the order is received and processed by your 3PL, they will then assign it to a warehouse closest to your customer. From here, a picking team will gather the items from their respective racks and put them into totes or carts for the next step: packing.
Afterward, another team will ensure that everything was picked correctly before boxing it up for shipping. At this stage of fulfillment, your provider will add any extra packaging materials, like bubble wrap or peanuts, to guarantee safe transport. After being packed up, all orders are ready for delivery!
In some cases, orders may need to be returned before they can be shipped out again. This is usually because of damage caused during transit. Your provider will inspect the package first before sending it back.
When Do You Need a 3PL Warehouse in China?
If your company ships at least 100 orders overseas each month, it’s probably time to consider working with a third-party logistics provider in China. But 100 is not the hard and fast rule, as many factors can affect this number.
There is no magic number at which time a company should start working with a 3PL. When you find your business growing so much that the volume of orders being placed has become too high for your small team to manage in-house, then it’s time to hire a 3PL.
There are some other signs that can help you determine whether you need a 3PL. If any of the following apply to your business, it’s time to look for a 3PL warehouse in China:
You’ve Run Out of Storage Space
Perhaps you started your business in a small office space with enough room to store inventory on-site. But as orders start rolling in, that space quickly becomes crammed. If you can’t store products, how can you possibly fulfill orders?
Working with a 3PL will give you access to more storage space so you can keep meeting customer demand.
You’re Spending Too Much Time Shipping Orders
If it’s taking up too much of your time and energy managing shipments, then it might be time for some help. A quality 3PL will have the resources and technology needed to get products out the door in a few hours.
Your Employees are Stretched Thin
As your business grows, chances are good that your team is being pulled in different directions, trying to handle everything at once. This can lead to mistakes, frustration, and even burnout. Adding a 3PL to your team can take some of the pressure off by lightening the workload.
10 Tips to Find the Best 3PL Services Company for Your Ecommerce Business
Just like with any other decision, you want to make sure that the 3PL provider you choose will help optimize your business and not hinder it. However, this is easier said than done.
With so many 3PL service providers out there, how can you ensure that the one you choose will be right for your business? Here are some tips:
1. Start with Reliability and Speed
As an e-commerce company, it’s important to make sure that your products go to consumers fast and get delivered without any kind of damage. Ask your potential provider about their average shipping times and any procedures they have in place to prevent or address damages during transit.
A provider with same-day shipping can be especially useful if you offer expedited shipping services.
2. Consider Their Ability to Handle Returns
Ecommerce businesses typically have a higher return rate than brick-and-mortar stores, so it’s important that your 3PL provider can handle returns efficiently. Find out what kind of system they have in place for managing returns and ask about how they communicate with customers regarding status updates on refunds or replacements.
3. Pricing Matters, But Don’t Sacrifice Quality
Of course, you want to save money wherever possible, but with your 3PL services provider, quality should be more important than price. Make sure you compare apples to apples when getting quotes.
4. Experience Working In Your Industry
Ensure they have the right equipment and technology to handle your products. But more importantly, they should have experience working in your industry so they understand the unique challenges that come with it.
For example, if you’re in the fashion industry, you’ll need a 3PL that can handle delicate and high-end items. If you’re in the food industry, they should have processes in place to prevent cross-contamination.
5. Client Support
Ideally, your 3PL is easy to reach when you need them and quick to respond. Good communication is key in any relationship, so make sure the lines of communication are open between you and your fulfillment partner. Of course, China’s time zone difference can present some challenges, but a good 3PL will have someone available during your business hours.
6. Flexible Pricing Options
While price is always a concern, you don’t want to be locked into a per-unit charge that doesn’t reflect your monthly storage and processing needs. Look for a 3PL that offers options like minimum commitment pricing or value-based pricing, rather than charging you by the unit.
Some providers charge per square meter of warehouse space used; others offer discounts based on the number of units shipped per month. Whatever the case, make sure you understand your 3PL’s pricing structure before signing a contract.
7. Technology Integration Capabilities
Perhaps the most important criterion on this list is integration capability. Do their systems seamlessly connect with yours? Can they automatically track and update inventory levels in real-time so that you always know exactly what’s in stock and where it is?
If not, keep looking. The best providers offer comprehensive tracking capabilities and a simple customer portal.
8. Order Consolidation
When your customers are ordering products that come from several vendors, a 3PL that can merge those orders into a single shipment can be a huge time—and money—saver. When evaluating providers, inquire about their order consolidation capabilities.
Some of your customers may have specific requests; they need a custom-sized box or a gift-wrapped item, for example. If you can find a provider that can customize orders to meet the needs of your unique clients, you’ll be able to streamline and improve customer experiences.
Also, it helps if your provider can offer custom branding on the shipping boxes. This is a small but powerful way to reinforce your brand and keep it fresh in your customers’ minds.
Last but not least, don’t forget to ask for customer references. Talk to others who have used the 3PL you’re considering and get their honest opinion.
Expand Your Business Reach
3PL warehousing can help you expand your business reach by allowing you to enter new markets and create new distribution channels. Not only will you be able to offer faster delivery at lower shipping costs, but you can also take advantage of their experience in international shipping.
Whether you are looking for short- or long-term storage warehousing solutions, Shield Works has the experience and expertise to provide you with cost-effective storage and shipping solutions. Reach out to us for warehousing processes that help you succeed.