Top Factors To Consider In Choosing A 3PL

Selecting a third-party logistics provider (3PL) is a major decision. The success of any retail or e-commerce business depends on logistics and supply chain management done right. Finding the best 3PL provider means that the business can focus on other initiatives, such as marketing, customer acquisition, product development as well as other growth opportunities. A 3PL is essentially a logistics company that receives, packs, stores, picks and delivers your goods. There are other services involved as well and these are delivered in a cost-effective manner, but only if you choose the right provider. How do you do that? Here are some of the top factors to consider:

  • Services

The first thing you should do is to make a list of the services that the 3PL offers. Minimal services that you can expect include packing, picking and transportation, but there are others involved as well. Take a look at their inventory management services as well as storage services. Do they offer customization? What kind of fulfillment services process do they have? This will give you an idea of what kind of services you can expect from them.

  • Carrier relationships

It is a good idea to check what kind of carrier relationships the 3PL has because this will tell you whether they can negotiate discounts and contracts. Take a look at what carriers and trucking services they use and price these services because this will also affect your bottom line at the end of the day.

  • Location

You also need to evaluate the location of the third-party logistics provider because their distribution centers and warehousing locations is essential for keeping your shipping costs low. Bear in mind that your needs can also change with time, as your business starts growing and expanding. If you choose the right 3PL, you will have the option of moving your inventory to different locations without having to switch providers. You can also save transportation management costs through a distributed warehouse system.

  • Technology

A warehouse management system shouldn’t be needed for managing inventory because the 3PL provider you choose should have the right technology for syncing the warehouse inventory with your e-commerce platform and ordering system. This can provide real-time information and this kind of visibility can be helpful in order, tracking and forecasting. Likewise, professional 3PL providers, such as https://directfulfillmentusa.com/, are also using cloud technology for better management and coordination and you can look for such an option.

  • Scalability

Is it possible for the potential 3PL provider to scale their service up or down, depending on the order volume and needs of the business? Some businesses do have seasonal lows and highs, or their inventory management needs may change dramatically depending on the changes in the economy. Make sure you look for a provider that will be able to cope with the changes without hiking up your rates dramatically.

  • Cost

Last, but not least, you should also ensure that you know how much you would have to pay to a 3PL provider for everything, including storage, inventory receiving, onboarding, customization, packaging, return logistics, kitting, and shipping.

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