Third-party logistics services such as a 3PL warehouse help businesses with things like product sourcing, access to storage space, product assembly and more.
Many businesses lack the funding, time and space to buy and manage their own factory and distribution network. Yet they do not have to miss out – a third-party logistics service can provide these at a reduced cost, specially tailored to their needs.
By working with businesses that need it, such a provider can help companies grow and complete more orders, thus boosting customer satisfaction.
Qualities to look for in a 3PL warehouse provider
There are certain criteria that a provider should meet in order to be considered competent and worthwhile. These include:
Location of the site
Depending on the nature of your business, the site’s location may be crucial to whether or not you hire a specific service provider. A site that is located a great distance away from your outlets and target market is generally considered undesirable, as it will cost you extra to transport to and from your other sites. Try to source a local site if you can afford it.
Size of the 3PL warehouse
The size of the space you will be using is key – you do not want to pay additional money for space you will not be using. Nor do you want to be paying top dollar for a small amount of space when you require more. Ensure that you determine the size of the space and figure out how much you will need for your goods.
Quality of distribution networks
The size, speed and reliability of their distribution network may also be an important aspect to consider. A quick, reliable distribution network is considered important in today’s fast-paced consumer market. Generally, the wider the network, the better. The provider should also offer national transport delivery to your clients.
A 3PL warehouse provider that tailors their services to your business’ specific needs is ideal as it allows you to get the most out of your money and helps you avoid unnecessary complications and fees. They should be able to offer storage and inventory management, including things like stock reporting, receipts and returns.
Good industry reputation
It should go without saying that your provider should have a good reputation amongst industry peers and professionals. When it comes to finding a great provider, industry reputation is a key component to consider.
Check that the 3PL warehouse provider offers a transparent and predictable pricing model. It is important to be aware of all fees involved upfront, including things like shipping and returns and extra services, such as kitting. And determine whether you want your goods to be fully insured during storage, delivery and return.
Efficient management tools
When you are outsourcing logistics, it is crucial to make sure that your provider’s management tools can sync with your current systems. This ensures that when an order arrives, all software is on the same page as to which product is being shipped, where it is going and what the new inventory level should be.
Efficient delivery service
Check to determine the daily order cut-off time of the 3PL warehouse you are considering using. The later, the better, as the order will not be delivered until the next day once the cut-off time occurs (thus affecting the delivery date a customer is expecting). It is also important to find out if your provider will give you a credit for damaged or lost goods – you will want to know how much liability you have for your products.