Based on this, the most advantageous strategy for regional expansion could be just a partnership with a 3PL operator, which outsources the functions of warehouse logistics and delivery. When compared with an alternative option (development by building a branch network) the savings are impressive because in this case, the company does not have to rent offices and depots or hire employees.
The 3PL solution is a concept from the international classification of logistics services, inducing conveyance, storage, order batching, administration of assets, and cartage to consumers. What is a 3PL provider? The 3PL operator is an intermediary between the owner of the goods and its recipient, who outsources the features of the depot and transport logistics.
The partner can place the most popular and sold goods for safekeeping, thereby reducing the time of their delivery to the buyer. This speed cannot be compared with the speed that provides portage from point A to point B. The goods are already at point B, it remains only to ensure their haulage around the city. At the same time, the logistics partner offers small business customers its own developments that allow them to interact with the company online: receive detailed information on the movement of goods, order statuses, balances, order and receive documents, make changes to the order if necessary, change the destination or sender. There’s a fusion of logistics and IT in this segment. Partners strive to establish the best information support for customers, provide them with convenient interaction with the company, build cross-functional connections, and digitize all this.
Cooperation with such intermediaries allows to successfully develop business processes directly related to logistics
Business representatives can focus on development, increasing sales, solving marketing problems, and planning by enlisting the help of 3rd party logistics.
The above-mentioned logistics companions are divided into 4 categories:
You can hire an operator who will work on one or more directions of the supply chain 3PL.
Most tasks outsourced to providers are operational and transactional.
It’s easy to find out the 3PL benefits. All you have to do is to determine whether there’s enough free warehouse space and whether there is enough manpower and equipment to ensure logistics processes. Almost 70% of shippers choose to outsource based on this analysis.
3PL supply chain provides:
So, what is a 3PL? It’s a great solution that brings lots of advantages and offers a personalized approach to completing tasks.
It’s essential to analyze a logistics operator’s reputation, operating principles, and responsibility before the consummation of a deal. All requirements and conditions of cooperation must be reflected in the contract. If you do not include an act of disagreement in the contract, there is a risk of disputes. Accounts for work performed should be broken down by transaction. It is important to agree on the regular stock count (at least once a quarter), and the conduct of partial, and complete inventories of goods and materials. It is better to pay attention to controlling the timeliness of the tasks and the accuracy of the configuration. Don’t forget to monitor and fix the agreement of the parties in the contract. It is not recommended to transfer all turnovers to a new logistics supplier if you are just starting your cooperation. It is better to adapt the warehouse gradually, thereby reducing the risks.
Only very small or very large online stores can do without various elements of logistics outsourcing. The former can store goods in a small warehouse and deliver them on their own or take them to post offices. The second is to maintain a gigantic warehouse and transport infrastructure, benefiting from the mass effect. Everyone else somehow has to use 3PL experience. As noted above, 3PL in the supply chain is one of the options for organizing logistics for an online store. Here, each store decides for itself whether it is ready to give all the logistics at the mercy of the 3PL operator or leave some of the elements behind. Each seller has their own situation. As a rule, the more he ships orders, the more profitable it is to use the third-party logistics services.What is a 3PL company and what does a 3PL do? In general, it’s an excellent alternative to your own logistics service and allows you to significantly optimize the work of an online store. A logistics operator for any supplier is a long-term and reliable partner with whom it is perfectly normal to discuss plans for joint development, process automation, and ways to improve the service. It’s okay to delegate all the supply points at the issue of 3PLs, focusing on selling or manufacturing rather than shipping. After all, as experience shows, the prices of logistics operators do not differ much from each other, the difference is only in the strengths and weaknesses of each but you can always resort to a valid market tool in order to make the right choice and try.