3PL & Supply Chain Outsourcing

"What is 3PL? What is Supply Chain Outsourcing? and Why You Should Care"

3PL stands for ‘Third Party Logistics’ and is the activity of a company hiring an external company (Thirdparty) to handle aspects of their fulfilment and logistics requirements. ‘Supply Chain Outsourcing’ is the exact same process as 3PL, but just using different terminology. Both activities relate to a business using an external partner to assist with aspects of their storage and distribution needs. Typically, eCommerce Retailers who have no physical shop or storage facility utilise order fulfilment providers to store, pick, pack, and distribute their items once purchased online via their eCommerce platform.

Using a ‘3PL provider’ or a ‘supply chain outsourcing provider’ for eCommerce fulfilment is a very common, efficient, and cost-effective solution for businesses of all shapes and sizes and comes with significant benefits.

"Save unnecessary fixed costs... focus on improving your product and/or service"

Firstly, having your own facility capable of receiving, storing, and distributing your products can be extremely complex to set up and maintain. It is also significantly financially constraining on your company as you have to consider various fixed costs such as; facility rent, maintenance charges, staffing costs, and equipment purchase/hire. All of which you have to pay for whether you have goods to store or not. The location of your fulfilment operation facility is also a big consideration, with warehouse real-estate next to key distribution routes proving extremely expensive requiring long term rent commitment. The majority of businesses understand that their money could be far better invested in activities such as; product enhancement through research & development, increased marketing campaigns, and market diversification. All of which seek to add value to their customer.

"Don't lose customers over incorrect paperwork!"

Secondly, having the knowledge and experience in domestic and international postage and shipping can be extremely complicated. Especially when shipping internationally, where your company will be required to prepare the correct documentation for countries whose rates for VAT, import and export duties are ever changing. Failure to complete or submit correct documentation will result in items either being returned to sender or being help up at customs until the problem is resolved, which could amount in the loss of frustrated customers.

"Achieve economies of scale and enhance your shipping options and pricing"

Furthermore, it is increasingly difficult to achieve attractive shipping rates and economies of scale when dealing directly with couriers and postal companies due to the fact that they require you to commit to a certain amount of order per day/ week/month in order to be eligible for suitable discount. Companies, such as Royal Mail, may require you to have a minimum number of shipments to be eligible for discounts and/or to be able to integrate with their systems, which for a small or new business this may not be realistic. By using a 3PL service, not only can you save time and energy, but also can also achieve better shipping options and rates due to tapping into the 3PL provider’s existing shipping network where they have established relationships with major couriers. Being able to offer next day delivery and express international shipment can be the difference between a customer buying your product or your competitor’s, don’t leave this to chance by trying to handle a function you are unfamiliar with.

"No system headaches"

Lastly, a massively overlooked requirement that many businesses disregard when deciding to handle their fulfilment and logistical needs in house, is the installation of an order management. This system must be capable of managing stock, receiving orders, and scheduling deliveries as well as having the functionality to integrate with customer systems, eCommerce platforms such as Amazon, Shopify, eBay, as well as courier systems such as DHL, DPD, Royal Mail and UPS. In order to achieve and maintain all of the above requires substantial IT knowledge and investment whether you decided to build this in-house or utilise a SAAS (Software as a Service) system. Either way you will have to spend considerable time and planning ensuring that your operating system is continually optimised, which requires a dedicated IT function within your business. By outsourcing this arduous and expensive function to a 3rd party logistics provider, you will save considerable time, money, and many system related headaches!

"Focus on what you are good at, and leave the fulfilment to us"

The above benefits are some of the key reasons large and established eCommerce retailers and brands such as ASOS, John Lewis, and Gymshark still outsource their fulfilment needs to 3PL providers. By using Finishing Line as your trusted 3PL provider, not only are guaranteed an experienced and reliable partnership, but you are still able to have full control and visibility over your supply chain via Tenevo, our cloud-based management system. Our focus is taking care of the physical and tedious part of your supply chain, so you can focus your time and money on what really matters, growing your business.

3PL & Supply Chain Outsourcing

"What is 3PL? What is Supply Chain Outsourcing? and Why You Should Care"

"Save unnecessary fixed costs... focus on improving your product and/or service"

"Don't lose customers over incorrect paperwork!"

"Achieve economies of scale and enhance your shipping options and pricing"

"No system headaches"

"Focus on what you are good at, and leave the fulfilment to us"

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