How to Choose the Right Third-Party Logistics (3PL) Company

Running an eCommerce business is a challenging journey since it necessitates making the proper decisions and actions if you want to prosper. Whether you are running out of inventory space, you have a large number of monthly orders, or you are experiencing rapid growth, you should consider choosing the right third-party logistics provider as it is one of the aspects you as an eCommerce business owner should focus on!

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A third-party logistics (3PL) company can help your eCommerce business in growing by increasing efficiency, lowering expenses, and enhancing customer service. A well-deployed 3PL provider allows you to quickly outsource supply activities that would demand a significant amount of new facilities and management work.

3PL is the primary and unavoidable key to the growth of every eCommerce business. Today, there is a significant increase in the number of businesses that select for and use 3PL providers, where they choose those that provide full services in logistics and supply chain management.

Managing product packaging and distribution by yourself may be difficult and expensive. If you want to compete, you must provide quick and inexpensive shipping. 3PLs specialize in supply chain management, enabling eCommerce businesses in optimizing the packing and shipping processes. The process starts with collecting inventory and storing it in warehouses, picking orders and collecting spreadsheets with the customer’s shipping data and order details, packing in numerous available materials, shipping, and transportation to the customer’s address.

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Using these types of organizations has numerous benefits, including time and money savings, increased reach, and enhanced scalability and flexibility.

There are a few types of 3PL companies:

  • Asset-based companies (These companies own warehouses and trucks for shipping, and they provide a wide range of logistics services).
  • Non-asset-based companies (They often do not own trucks or any other transportation service, but instead cooperate with asset-based businesses to provide it).
  • Warehouse-based companies (These companies provide warehousing services, which include receiving items, controlling, storing, and transporting them).

In this article, we are going to list some of the factors you should consider when choosing the right third-party logistics company.

  1. Explore and analyze

Choosing the proper 3PL provider is a critical step for both you as a business owner and your business itself.  As a result, you should spend some time researching all of your options and analyzing their performance, success, established records, abilities, and so on.

  1. Stability

Remember that stability is crucial! When creating a shortlist of 3PL companies to work with and entrust your business and clients to, you should consider the company’s record of success, whether they are good enough, whether they offer optimal logistics, good equipment, and facilities, and other factors.

  1. Capability and flexibility

If a 3PL company has enough resources and capabilities to meet your requirements and needs, you should select to partner with them. Whether it’s the shipment department, warehouse space, or any other logistical services, a strong 3PL company should have room for flexibility and the capacity to adjust to any of your needs.

Good suppliers also handle returns services, so if the customer returns the product, the 3PL business will ship it back to the warehouse and restock it in a timely fashion.

  1. Security

One of the most crucial elements to consider is security! Any company with a questionable security record should be removed from your shortlist. Collaborate with 3PL providers that are responsible for the protection and safety of the client’s goods, employees, equipment, assets, and other security elements. Only consider companies that have acquired some of the most significant security certifications, such as PCI, FDA, or DEA.

  1. Technology

Every day, technology advances and every 3PL organization should aspire for greater sophistication. Partner with 3PL companies that use cutting-edge technology to ensure that your needs are met efficiently. These providers are likely to simplify the critical process from purchase to delivery by incorporating advanced and latest technologies.

One of the best examples is inventory management, in which a quality 3PL provider not only offers warehousing but also uses technology to sync inventory with your online store and proactively restock it.

  1. Scalability

In terms of demand, running an online business typically involves certain ups and downs. This could be a concern with 3PL providers who are not sympathetic and cannot meet your criteria of scaling down supply operations frequently. As a result, look for and evaluate companies who actively work with both small and large clients to ensure scalability fulfillment.

Final words

Choosing the right third-party logistics company is an important factor in every eCommerce business. As previously noted, these companies provide numerous benefits and are an unavoidable component of your company’s growth. However, picking the proper one might be difficult, therefore we emphasized some of the most important factors to consider when selecting the next 3PL company.