The benefits of 3PLs for small businesses
Many new ecommerce concerns enter the market every year, now. So many in fact that competition is more than just fierce, it can be brutal. To maintain any kind of a margin at all, e-tailers and internet sellers of all kinds are looking at outsourcing their inventory storage, pick-and pack process, and/or distribution to third party logistics providers, or 3PLs.
There are three primary benefits to outsourcing your warehousing and fulfilment
First, look at the cost. Your first reaction might be: “I’m not paying anyone to do this now, I do it all myself. You couldn’t possibly save me money.” You may be wrong, though. Doing it all yourself has a lot more cost than you realise. After all, you only have so many hours in a day. If you’re like most small business owners or sole traders, you really work 12 hour days already. How much doesn’t get done every day? How much more marketing, SEO, or even product creation could you get done every day if you didn’t have to sort out orders, pack them, and take them to the post office? Now tell me how much money you spend on warehousing, pick and pack, and fulfilment.
Second, look at performance. If you are a successful small business, we already know you are dedicated to your work, but if you do everything, you cannot really excel at any one thing. The best way to compete in a tight market is to excel. To do that, you need the right logistics partner. A good 3PL is an expert at getting your merchandise to your customers quickly, inexpensively, and accurately already. Having a partner like that allows you to become an expert at marketing, management, and the things you went into business to do in the first place.
Lastly, if you are a small business, then you probably don’t have a warehouse. Owning or renting warehouse space is prohibitively expensive. Maybe you’ve rented a storage locker. Maybe your ‘home office’ is so full of stock you do your work in the dining room. Maybe it’s already invaded your bedroom as well. Too many small business owners forget to assign a cost-equivalent to the inconvenience of storing their stock at their home or on-site. Look at it this way, how much would you charge a friend to store all of his stock in your spare bedroom every month? How much would you pay just to get that space back?