Building a business is hard. It demands focus, strategy, and patience. It can also be very expensive. And if you are an entrepreneur with a growing business, one of your biggest expenses is likely to be shipping and logistics. Luckily for small business owners, there is a way to cut costs and improve efficiency through outsourcing.
An outsourced third-party (3PL) fulfillment and procurement service provider can handle all the logistics involved in shipping your product from point A to point B. From packing it up at the warehouse to arranging delivery on time and at the right cost, they handle everything.
This type of service has many benefits that make it worth considering if you’re looking for ways to keep costs down while still providing excellent customer service.
Benefits of Hiring a 3PL Provider
3PL fulfillment providers can help you improve customer service, reduce shipping costs and carbon footprint, reach new markets and manage your supply chain. They effectively act as a buffer between you and the logistics providers.
3PLs are great for businesses that want to focus on their major competencies without worrying about the logistics side of operations. A 3PL will take care of all these things for you so that all your energies are directed toward growing your business in other areas.
If you are considering hiring a 3PL provider, it is important that you do your side of the research by asking these important questions:
What Is Your Track Record?
When you are considering hiring a 3PL company, you will want to find out what their track record is and how long they have been in business. You should ask them for some references and connect with their existing clients.
A good 3PL provider will provide you with a list of their clients so that you can call them directly and ask about their experiences working with the 3PL. According to the IBIS World, there are 20,406 third-party logistics companies registered in the US as of 2022. If your business is operating in and around the US, you will have plenty of options to choose from.
What Are Your Clients Saying About You?
Another question you should ask is what other companies are saying about them. Research has found that reviews from other customers are the most influential tool in directing a customer’s decision toward a specific purchase.
When a 3PL provider is worth their salt, they will be eager to share testimonials from their clients. Ask for references and sample reviews from other companies who have worked with the 3PL. These can be helpful in deciding if this is the right company for you.
If the company has been around for a while, it’s possible that some of its clients have left negative reviews online on sites like Glassdoor or Indeed. It’s important to research this type of information, too, because it may give insight into how well they handle complaints and issues.
Do You Offer a Free Trial Period?
It’s important to know what your options are when it comes to choosing a third-party logistics provider, and one of the first things you should consider is whether or not the company offers a free trial. This will allow you to test out their services for yourself before making any commitments.
If they don’t have an option for this type of trial period, ask yourself why that might be the case. What would make them hesitant? It might be something as simple as their lack of confidence in their own ability or resources, or maybe they simply don’t want to lose any business. Either way, these are all things worth considering before deciding if this is the right company for you.
How Long Does It Take To Begin Working With You?
Some 3PLs have a standard setup process, while others are more flexible. It’s important to find out what the process is for setting up an account with each provider and how long it takes. If you’re going to be doing business with them regularly, it’s good to know that they don’t take weeks or months to set things up.
Who Will Be My Point of Contact?
You will want to make sure that you know the name of the person who will be your point of contact with the 3PL. This is an important detail because it will help you feel more comfortable and confident about working with them.
You’ll know exactly who to ask questions or get in touch with if something comes up. It’s also helpful to have a phone number and an email address so that if any issues arise, they can be resolved quickly.
When it comes time to hiring a third-party logistics provider, there are many factors for companies to consider, including cost, quality control procedures, and supply chain management capabilities. Properly selecting a 3PL requires careful consideration of each company’s needs.
How Do You Handle Issues That Arise During Shipping?
When you’re hiring a third-party logistics provider, it’s important to ask about how their staff will deal with issues that arise during shipping. What are the steps they take to resolve problems? How quickly do they respond to problems? What is their policy on refunds, and does it match up with what you expect from your business?
Finally, ask if they offer a guarantee in case anything goes wrong with your shipment or delivery. This way, there won’t be any surprises if something goes awry at some point down the line.
A successful supply chain requires multiple parties working together to deliver goods from point A to point B efficiently, accurately, securely, and at low cost. And that’s where a 3PL service provider comes into the picture.
According to Grand View Research, the worldwide 3PL market was valued at USD 956.80 billion in 2021, and it is projected to grow at a CAGR of 8.6% from 2022 to 2030. This implies that hiring a 3PL is going to be a popular trend for many businesses in the future. So you might as well consider hiring a 3PL for your business.