Third-party logistics, or 3PL, refers to a service that helps businesses in outsourcing services that are part of its supply chain. These are companies that are capable of offering businesses comprehensive and sometimes, one-stop solutions, in terms of packaging, transporting, warehousing as well as order fulfillment. They can identify and even fill out the gaps that exist in your supply chain. Their best practices, expertise, and technologies can integrate into your eCommerce business for solving the toughest challenges in logistics management, thereby making your supply chain more responsive and agile, something that has become necessary in today’s competitive and uncertain market environment.
An important thing to understand is that working with a 3PL provider is not a transactional relationship; it is actually a partnership and this is exactly how you need to treat it. You can choose to use third-party logistics services for numerous reasons, such as venturing into new markets, expanding your customer base, or creating positive experiences for customers. However, more and more businesses, whether big or small, are looking for external expertise and support for running their supply chain more efficiently that can give them a competitive advantage. This is where third-party logistics services can really help because they provide the following perks:
- Drive cost savings
As 3PL services specialize in logistics, they have a more extensive network than the supply chain function of your company. Hence, they have exclusive relationships that give them greater influence during negotiations and can also help them get volume discounts for their customers. All of this can bring down your overhead costs. Plus, partnering with a good 3PL service, such as https://atifulfillment.com/, also helps you save money that would otherwise be made on infrastructure because these services can provide warehouse space, transportation, tracking technology, staff, and more.
- Focus on core competencies
Outsourcing logistics also gives your business leeway to focus on its core competencies rather than getting involved in the management of non-core, yet critical operations. You can enjoy the benefits of logistics expertise, without having to use any internal resources.
- Enable market expansion and business growth
The role of 3PL services in supply chain management is to provide businesses with access to markets where they don’t already have an established presence, which enables growth. You don’t have to spend money on equipment, warehousing, and labor for managing inventory in a new market, and neither do you need to learn the logistical nuances of the market.
- Gain scalability and flexibility
The benefit of 3PL services in supply chain management is that they can provide businesses with the flexibility and scalability for utilizing supply and distribution resources in accordance with current business needs. This means that when your sales are down, you don’t have to worry about any unutilized resources or redundant investments and you can easily upscale when there is an increase in demand.
Along with these perks, opting for a third-party logistics service also allows businesses to gain from the experience and expertise of specialists who know what they are doing.