Why do so many national and international businesses outsource to a proficient 3PL partner? In short, because it’s cost effective. Retail, eCommerce, pharmaceutical, finance, collateral distribution, FMCG, not-for-profit; many companies and sectors outsource their supply chain to a logistics expert, but the benefits are not just financial.
Those reliant on an internally managed logistics operation will be well aware of their average cost per order. When you factor in that many companies are not a full four-season operation – those average costs soon creep up. From capital investment to data management, company growth and labour, the right 3PL partner can support your business in many ways.
- Reduce infrastructure, fixed costs and capital investment
Managing logistics in-house includes significant commitment in terms of capital investment and ongoing management. A 3PL partner will already have the tried and tested infrastructure, people and technology to both improve your operation and reduce costs. Formerly fixed costs can become variable, with logistics costs tracking your sales revenues. You can take advantage of advanced WMS technology, flexible capacity, and faster order throughput.
2. Reduce shipping costs
Shipping costs can easily eat into profit margins and need to be monitored carefully. A 3PL will negotiate with multiple carriers and freight forwarders on a regular basis and can pass on bulk discounts through their scale and buying power.
3. Improve order fulfilment time
A 3PL partner will have exceptional experience fulfilling orders and aim to maximise efficiency by reducing order fulfilment time where possible. The 3PL’s warehouse will benefit from a WMS and a streamlined method of picking and packing orders in the shortest amount of time possible. A 3PL may use an order management system to map out the optimal picking routes for warehouse employees, speeding up the picking of goods. The location of your 3PL warehouse relative to your key customer base may play a part in fulfilment time, particularly if a same-day delivery option is likely to be part of your offer.
4. Enhance data and decision making
Businesses looking to maintain profitability and achieve YOY growth must manage a complex cocktail of market risks. Using data for eCommerce can help manage inventory and forecast demand. Businesses should use data to aid them in decisions regarding stock control and rotation. Data and technology are key in delivering an intelligent, cost-effective strategy.
5. Scale and manage peaks
Whilst we would all love a steady flow of demand twelve months a year, this is not realistic for many organisations. Many businesses experience seasonal demand, meaning peaks and dips are inevitable. You need a partner that can grow as quickly as you do and streamline at all times. Look for a 3PL with knowledge of your industry and ask for a tour of their HQ. The right 3PL can help you grow your business, offer new products and support expansion into new markets.
By partnering with EC Group, your customers could benefit from quicker order fulfilment and lower delivery costs, increasing customer satisfaction and the likelihood of repeat business. By drawing on years of experience and an existing infrastructure, EC Group can reduce your logistical costs and free up time for you to focus on other eCommerce activities.
For advice on how we can support your operation, please get in touch with one of our experienced account managers.