For any e-commerce business, expansion means managing higher order volumes and its fulfillment. While most big and well established companies manage these logistics on their own, keeping up with such high volumes and rapidly evolving supply chains can become difficult at times, especially for medium and small businesses. In such a scenario, outsourcing your logistics to a 3rd Party Logistics (3PL) provider may seem an end to all troubles and hassles that come as a part and parcel of supply chains.
3PLs offer a number of services as procurement, managing inventory, fulfillment, warehousing, and packing and most importantly, shipping your goods while promising financially sound and faster supply chains. 3PL’s can save you costs of brick and mortar for building warehouses or investment on various tools and labor. Through their partner network and advanced technological resources, these 3PLs can integrate and oversee a number of operations and help you focus on other core aspects of your business. Thus, by leveraging industry best practices, 3PLs can help your business expand to new territories and improve customer reach.
Although the options are infinite, not every 3PL provider out there would fit well with your organizations operational needs. Partnering with a wrong 3PL partner might even reflect poorly on your business’s finances. With thousands of 3PL providers that are available today picking up the right one, is very crucial. It is imperative, before you hire a 3PL provider, to understand how 3PL’s work and what are the requirements of your business. You must evaluate your current supply chains and freight logistics and figure out what exactly your business lacks – is it better delivery speed, or a more equipped or larger warehousing space or if you need to manage and ship larger order volume. These are some of the few questions that will help you identify the shortcomings of the existing logistics and supply chains of your business.
Once you have figured out the answers to above questions, it will be easier to find the right logistics partner. Following are some of the important factors and aspects that you must consider to make sure that a potential 3PL is the correct fit for your business.
You surely would not want to hand over your logistics to a 3PL organization that is new to the market and its dynamics. Look for and shortlist companies that have an experience of at least a few years in the market. Such companies would have worked with quite a few clients and can use their market experience and knowledge of industry to offer you better solutions.
The right 3PL provider for your e-commerce business should have a delivery network that is strategically placed to ensure smooth deliveries of your products to the customers. The central delivery regions of your potential 3PL partner should correspond to your target market. For instance, if your ecommerce business operates pan India then you could receive orders from anywhere across India. Hence you would want a partner that has delivery points spread across India.
- Cost of Operations
3PLs offer an array of services to manage your logistics of your business and there’s no doubt to the fact that they‘re going to charge accordingly. It is best to compare the costs and services of all potential 3PL vendors before finalizing on one. It might seem tempting to outsource logistics at a cheaper price, in a bid to save up on costs, but that could mean compromising on the quality of services and might be detrimental to your business in the long run. A reliable 3PL partner should offer transparency both in fixed and variable costs of services they offer.
It’s a fast moving world today and we cannot emphasize enough on the need to offer quicker delivery of products to your customers. Customers look for faster services and your logistics and supply chain operations must be paced up in order to survive the highly competitive market. Look for 3PL providers that offer lesser processing time and a higher delivery speed on orders.
Your logistics partner will play a key role in the expansion of your business to new markets and ensure greater reach to customers. Look for 3PLs that will not only handle current requirements but, in the long run, allow your business to scale your operations at a larger level while warranting seamless order fulfillment. This again implies that your potential 3PL partner should have a reliable partner networks to respond to market driven demands.
- Customers Services and Responsiveness
It is advisable to review the quality of services a 3PL organization offers through the existing clients or through ratings on online platforms. A good 3PL provider should be able to customize solutions and optimize operations according the needs of your business and execute them effectively as well. They should be able to handle everyday operations of your business, take on any challenge posed to them by uncertainties in market and respond to it accordingly.
- Technological capabilities
Supply chains in today’s time are very different from the traditional ones and need to be ably supported by the latest information technology that co-ordinates and monitor various operations. A good 3PL provider has a number of tools at its disposal such as Inventory Management System (IMS), Warehouse Management System (WMS), Transport Management System (TMS) and other cloud based systems to improve supply chain visibility and keep a track of all operations. This helps logistics provider to acquire real time data and mitigate errors in supply chains, thereby increasing efficiency.
Safety of your products is as an important aspect that you must look into as any other, before choosing a logistics partner. Mishandling of products and damage during shipping will lead to losses. Hence, ensure that your logistics partner has standard safety procedures and checks in place, whether for driver partners, vehicles, warehouses or fulfillment hubs. These measures will ensure that there is minimum damage to your products while handling or transportation and greater customer satisfaction.
Finding the perfect logistics partner is surely an enormous task and requires a good deal of research before you pick one up. Investing in the right partner will not only help you cater to your customers in a better way but also provide the scope for your business to grow and build a brand name in the industry.