How to Know You’re Ready for 3PL

UDL_HowtoKnowYoureReadyv2Your business has grown and your inventory has grown with it. Growth has allowed for new innovations, business models and manners of success, but it also has called for new responsibilities, new employees and new skills. Logistics management is one of the areas now increasingly demanding your time and attention, but before you invest further in in-house logistics operations, it may be time to start considering how third-party logistics providers can make things easier. Below are three things to take into account to see if you are ready:

Consider your overheads 

Your current storage situation has outgrown your space, and now you’re facing the daunting and expensive proposition of expanding your building or leasing/purchasing another. New packaging/labeling requirements, order fulfillment needs, and returned stock have now become an issue that you’re ill-prepared to handle.You find that your profit margin is continually shrinking from additional spending on equipment and labor. A local 3PL can very likely help with all of the above.

What are you selling?

Does your product require special treatment, extra security, unique packaging or timely distribution? Is the bottle created out of post-consumer recycled waste? Do you currently promise two-day shipping? Analyze your current logistics operations and how you handle getting your product to the consumer, from warehouse storage to package design to shipping times. You will either need to be willing to change certain aspects of the process or find a 3PL that can accommodate your specific needs.  Also, if you are selling fragile items, flammable commodities, or sensitive materials (like alcohol or cigarettes), it is important to have full disclosure with your potential 3PL before embarking upon a partnership.

Understand the ways the 3PL companies you’re considering can benefit your business 

Working with a 3PL can feel like putting the lifeline of your business into the hands of someone else. You need to research the ways they are available to you, looking at customer service, problem solving abilities, how they can help your business technologically, if they have proper security technologies set in place, and if they can help with special requirements.  Some 3PLs won’t be able to handle every need but can take care of core areas, such as warehousing and transportation. Research how 3PLs can help save your company funds, manpower and time. It can be one of the best decisions your company has ever made.