3PL means third-party logistics. Businesses today use the services of a third-party provider to conduct their operations, such as distribution, warehousing, and fulfilment. The reason for doing this is the rise in efficiency.
It can feel intimidating to hand over such significant operations to a third party. However, if you take all the right steps, there’s nothing to worry about outsourcing. One of those right steps includes partnering with an experienced and trustworthy 3PL.
If you are partnering with someone for business, it’s crucial to ensure they are the best candidates. So how would you know someone is the right 3PL?
Here’s our list to deduce if someone is the ideal candidate to provide you with warehousing and distribution services.
1. Technologically Savvy
Sometimes, 3PLs need to change or add new processes on a customer request. But they may take too much time to do that. Several factors may contribute to this delay. One very important factor is lagging on the technological front.
Technology has been etched into our world. It improves our lives and works so much. It is true with 3PLs too. A 3PL that can keep up with ongoing technological advancements will be quite helpful to your business.
Look at the company’s annual technological investment as a percentage of net revenues. This gives you a brief idea about a 3PL’s technological abilities.
Then look further and see how much of its yearly IT budget is allocated to innovation-related efforts— maintaining old systems and creating or installing new apps or capabilities, particularly customer-facing ones.
Besides, you may also verify that the 3PL’s systems can interact with your automation needs. Some examples are order routing and inventory management solutions for your storefront, as well as any accounting or CRM needs.
2. Scalability
Choose a 3PL with your growth in mind. With a stroke of luck, your brand can grow multifold within a short time. It is especially true with eCommerce brands.
In that case, it will be problematic if your 3PL can’t keep up with your growth. For example, if you are receiving a massive amount of orders but your 3PL can’t fulfil them within a decent timeframe, it will affect your business.
Another example would be expansion. Previously, you only served B2C, but now, you expanded into the B2B market also, which has different standards. If your 3PL can’t handle this, it’s going to affect your business negatively.
Therefore, keep your growth aspects in mind while looking for fashion warehousing and distribution.
3. Storage Choices
Another significant aspect of a 3PL is the storage options. Because a 3PL stores your products and satisfies the fulfilment requests, it must have solid storage options and a system.
How soon will your inbound goods be received and ready for sale? Due to the several procedures, some 3PLs need you to manually unbox, sort, and shelf your items, which might take several days.
In order to maximise storage capacity per SKU and do away with manual sorting, other 3PLs can adapt storage to your carton sizes. This indicates that your storefront’s inventory of goods is available faster.
Note: SKU means the stock-keeping unit. It is a unit of measure used in inventory management.
4. Customised Returns
You can’t build a business without expecting product returns. No matter how good your products are, there will always be someone who wil want to return it. In that case, you should be accommodating to your customers.
Your 3PL must streamline your return process and make it easier. The essential angles to your return process are technology, staffing, and customisation.
For instance, your 3PL should be able to customise the process according to your specifications—inspection, refurbishment, restocking, disposition, etc.
5. Tailored Packaging
Packaging matters in a business. Take clothing brands, for instance; how you pack also leaves a great impression on your customer.
If you need customised packaging for your brand, you cannot go with a 3PLs that adopts a one-size-fits-all philosophy. Make sure your 3PL can fulfil your special demands, such as customised packaging, sustainable packaging, or custom packing materials and inserts.
All these elements matter if providing a distinctive customer experience is crucial to your company. Never accept a 3PL that doesn’t prioritise your brand over its own.
6. Communication
Businesses always look for long-term relationships. Communication is key in building such long-term connections.
To create effective two-way communication with your 3PL, you should set expectations, responsibilities, operating procedures, etc., at the beginning of your collaboration itself. Such effective communication also helps when an issue needs immediate attention.
Thus, ask your potential 3PL about their procedures and policies for handling expectations and conflicts. This is important to consider as you will put your brand’s operations and reputation in their hands when you work with them.
Final Say
Checking these 6 aspects of a 3PL will tell you if it can become a worthy partner to you. If you want to dig further, you can also look at its discounts on shipping, integrated systems, ability to change, and ability to handle high SKU count.
Efficient Group is an excellent fashion 3PL service to consider. It offers many services to help your business grow. Take a look at it and connect for further discussion.
We hope you now know what you should expect in a 3PL. You can reach out to us in the comments if you have any follow-up questions.
