When you decide to use 3PL services, the next big task is finding the right provider. And since the stakes of making the wrong choice are huge, it is important to make sure you carefully evaluate your options before committing.
The good news is that the process doesn’t have to be difficult to manage. If you focus on a few key areas, you can avoid surprises later on and maximize your chances of making an informed decision.
Let’s explore five aspects to focus on below.
Quality
The biggest advantage of using 3PL services is the ability to tap into a proven logistics process and infrastructure. That’s why the first thing you should evaluate is whether the 3PL provider has the type of infrastructure that can meet your needs and provide an advantage over what you have in place yourself.
Some of the most important aspects to look into are:
- Warehouse space, which must match your inventory volume and have a strategic location that improves shipping times.
- Transportation capacity that allows the provider to quickly transport your inventory and orders, even with fluctuations in volume.
- Technology used, including systems for managing warehousing, transportation, inventory, and every other part of the logistics operations.
Experience
Even if a 3PL provider looks good on paper, you need to evaluate whether they can actually follow through on their promises and capitalize on their infrastructure. The only way to be sure is to check the experience of the company, looking at how long they have been operating and the types of results they have been able to achieve.
It’s also a good idea to check out what their customers have to say. Look for specific and recent testimonials that cover the service quality, consistency, and value. Try to identify customer experiences that match your situation, as that can be a good indicator that you can achieve similar success.
Reporting
When you work with a 3PL provider, you are handing over a big part of your operations to a third party. And since delivering goods to customers on time and without disruptions is a representation of your brand, it’s essential that the provider is capable of communicating on short notice and providing you with a full picture of what’s happening.
On one hand, that means having a quick and reliable process for sharing information about orders, shipping, inventory, stock, and returns. But at the same time, it’s about providing you with broader data in terms of performance and what could be optimized and improved.
Cost
Choosing a 3PL provider based on cost is rarely a good idea. If you end up going with the cheapest option, it will likely cost you much more in the long run, as poor customer experiences tarnish your brand. Still, budgets are a reality, so you need a 3PL provider who matches your range and can provide a cost-effective solution that improves your operations while offering good value.
In terms of costs, consider both the set-up fees and the warehousing, shipping, and other rates. In some cases, paying more initially may be worth it if it’s a reputable company that will help you save money over time.
Integrations
Working with a 3PL provider becomes much easier when you can integrate their services into your existing enterprise resource planning (ERP) solution. That way, you can maintain real-time data on your inventory, order processing, sales, and other aspects of logistics.
Since you are outsourcing a big part of your operations, having accurate data on what’s happening is a key part of ensuring that there are no disruptions. The good news is that with solutions like ApparelMagic, integrating with the leading Warehouse/3PL solutions is an easy and convenient process.
Bottom Line
Although switching to a 3PL provider can be a big change, the benefits of using a logistics business partner are hard to ignore. Whether you want to streamline operations, expand to new markets, or free up time to focus on your business, third-party logistics services can be a massive enhancement for your business.
But the results you get will depend on whether you make the right choice in provider. It’s crucial to consider the quality of services, experience, cost, and integration possibilities with your ERP solution to get the most out of getting a new provider to handle your storage and shipping needs.
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