If you’ve recently started or are planning to start a small business online, you will have to make a plan for how you’ll deliver your products to the buyers. There are mainly two options you can pick from; you can either handle the logistics yourself or hire a third-party logistics provider (3PL).
If you are just starting out, you might think that taking responsibility for the deliveries would be better. However, in most cases, this is not a sustainable option for long-term business. Instead, it is recommended that you partner up with a 3PL provider to fulfill your deliveries. Not only will this make the process of packing and deliveries more seamless, but it would also allow you to focus your time and energy on growing your business.
If you’re confused about how to choose the right 3PL partners for your small business, read on.
How To Choose The Right 3PL Partners For Your Small Business
As a new and relatively inexperienced entrepreneur, you’d likely be confused about a lot of things. Hiring the right 3PL partner can help a lot during this stage. In addition to streamlining your delivery process, you can also learn a lot from their previous experience with other online businesses.
Following are some things you should consider before choosing a 3PL partner for your small business.
1. Research! Research! Research!
If you look up “local 3PL companies” on Google, chances are that you’d instantly be presented with 2 dozen companies, at least half of which would be easily accessible. With so many 3PL companies offering their services, it can be hard to find the best one for your business. It is also important to keep in mind that there is no “best” 3PL company out there.
Different companies offer different services, specialties, reach, and levels of expertise. Therefore, what’s best for one type of business may not be the most suitable for another type of business. Before narrowing down a list of the most suitable 3PL partners for your business, do as much research as possible. Take a look at all possible options and make lists of pros and cons to make a more informed decision.
2. Ask Questions
Don’t just base your decision on which company seems the best on paper. Instead, approach at least a couple of 3PL providers and have thorough discussions with them. Remember, no question is too unimportant or stupid to ask. You’re making a huge decision that will influence the future of your company. So ask any and every question that comes to your mind.
You want to find out how reliable the company is, how they handle timings, their inventory storage and management, the scope of their services, rates for parcels of different sizes, current clients, carrier relationships, specializations, and anything else that comes to your mind that you believe is relevant to your business. You may also want to ensure that the 3PL company has prior experience with small businesses.
3. Growth Prospect
Yes, you are a small business at the moment, and most 3PL companies would be qualified to handle your logistics. However, it is likely that you have a plan to grow your business in the future. Therefore, it is important to evaluate whether a 3PL company would be able to keep up with your growth.
Ideally, a 3PL company should be able to take on larger volumes of inventories on short notice. This doesn’t necessarily mean that you will see a sudden boost in your sales in the future. However, in case it does, you need to be sure that your 3PL partner would be able to handle it. At the same time, it is important to work closely with your 3PL partners and have clear communication. This way, they’d be better prepared to manage an increase in package volume in advance to avoid any inconveniences.
4. Financial Aspects
One of the biggest benefits of outsourcing eCommerce fulfillment is that it can save the business a lot of money in the long run. And as you know, every penny saved is a penny earned. Therefore, it is essential to understand how the collaboration will affect your business from a financial aspect. A 3PL company that is already struggling with its finances would be focused on its own financial situation and may not be able to help improve and grow your business. On the other hand, a 3PL company that is financially stable will not have to worry about such things. Hence, they’d be able to invest in their clients and help grow your business.
Additionally, you need to discuss whether they have flexible finance packages. What happens when your business is going through an off-season? Does the company adjust the pricing accordingly or do the prices remain the same? It is always better to opt for a company that will be flexible with their pricing plan so you don’t have to pay extra when you’re not making any deliveries.
5. How Do They Handle Calamities
When it comes to running a business, you hope that everything would go smoothly at all times. Unfortunately, that isn’t always the case. No matter how hard you work and how much you plan to avert disasters, something or the other is bound to go wrong from time to time.
Therefore, it is crucial to find a 3PL company that is prepared to deal with such situations. When approaching a 3PL company, discuss their internal planning in case of disasters such as technology outages, transport disruptions, shortage of labor, unexpected weather issues, and any other risks in your line of business.
6. Understand Their Processes
Learn about the company’s systems and way of doing things. Understand their workflow and see how they prioritize customers. Make sure the 3PL provider keeps you in the know regarding how they allocate resources and schedule shipments to customers.
Be sure to ask your 3PL provider to share their process for shipping items and urge them to keep things 100% transparent.
7. Additional Services
8. Value Proposition
Finding partners that share business values with your own organization is key. Learn about the 3PL providers governing philosophies especially when it comes to servicing customers.
9. Multiple Locations
Does the 3PL provider service multiple locations? This is useful for businesses that also service multiple locations. If your customers are scattered around, you will want to work with a 3PL provider that has locations in each of those respective areas.
Is my provider in this for the long haul? Are they dedicated to constantly improving their systems and ways of doing things? It’s important to recognize whether your 3PL provider is investing into their facilities and striving to improve their processes on a regular basis.
By asking the right questions, you can ensure that you make an informed choice while hiring a 3PL partner provider. If you’ve looking for a 3PL partner in Dallas, consider visiting 3PL Bridge today.