It’s been a lot of work, but finally, you’ve figured out your product and found a manufacturer to make it for you. Now there’s just one thing left to do: decide how you’re going to store your product and ship it to your customers.
At this point, you basically have two options: 1) find your own warehouse, hire a fulfillment team, negotiate shipping rates, buy shipping supplies, and figure out a reliable process for tracking and managing your inventory…or 2) hire someone else to take care of it for you.
While the first option certainly can work, it can also be a huge headache, which is why so many businesses opt to simply hire a 3PL company to manage their logistics. Often, it’s easiest to simply leave things to the professionals.
Here at VOX, we have over 20 years of experience with the fulfillment process. At this point, we’ve basically seen (and shipped) it all. In our opinion, picking the right 3PL company is just as important as picking the right manufacturer. So, with all of that in mind, let’s talk about how to choose the right 3PL company for your business.
What is a 3PL Company?
Before we get into picking a 3PL company, though, let’s start by talking about what a 3PL company is.
3PL stands for third-party logistics. To put it simply, a 3PL company manages the logistics of your supply chain: storage, shipping, and so forth. If your business sells products online, your 3PL picks, packs, and ships your products to your consumers. If you sell in a physical location, they handle distribution to your brick-and-mortar store(s).
As ecommerce has grown, so has the market for 3PL providers. These days, almost every business uses at least one, including 86% of Fortune 500 companies and 96% of Fortune 100 companies.
If you think about it, though, this just makes sense. A poor fulfillment strategy can be a death sentence for your business, and if your supply chain isn’t ready to handle your business’s growth, you can drown in your own success.
Just ask Death Wish Coffee. They appeared on Good Morning America a few years back and sales shot through the roof. Unfortunately, they didn’t have the logistics in place to handle 10,000 orders at once.
The end result was disastrous.
With all the delayed and mishandled orders, there were so many customer complaints that Death Wish Coffee was kicked off of Amazon and eBay—their two biggest sales platforms. While they did manage to survive, they were lucky. Poor fulfillment processes have killed many other businesses.
That’s why most businesses hire a 3PL company to manage things for them. A good 3PL provider like VOX is used to working at scale. They know how to quickly ramp up with your business and make sure that your customers always have a great experience.
Why Should You Hire a 3PL Company?
Third-party logistics providers aren’t just a buffer against unexpected spikes in sales volume, though. Even when everything goes smoothly, there are still a lot of benefits to using a 3PL.
For example, supply chain logistics are often quite complex. Here are just a few of the things you’ll have to figure out:
- What’s the best way to store your product?
- What processes do you need to have in place to ensure that the right product gets shipped to the right person at the right time… every time?
- How will you track orders?
- What’s the cheapest carrier to use?
- How will you handle the specific customs, duties, documentation and regulatory requirements of international shipping?
- What size of warehouse do you need? How will you handle the seasonality aspects of sales?
- Which warehouse technology solutions should you pick?
- How will you integrate your warehousing solutions with your ecommerce platform or retail POS?
With a 3PL provider like VOX, you don’t have to worry about any of these questions. Your 3PL company already has solutions in place for each of these issues (and many, many more).
In addition, because 3PL providers work with multiple businesses, they can often save you money. You don’t have to invest in a warehouse that may or may not be full all the time, employees that may or may not have enough work to do, or technologies that may or may not be right for your needs. Plus, 3PL companies live, breath, and sleep logistics. They’re aware of all kinds of potentially expensive mistakes and problems that can cost you a ton of money.
Of course, 3PL providers aren’t right for every business, but these are just a few of the reasons why most companies choose to hire a 3PL company for at least some of their logistics needs.
Picking the Right Third-Party Logistics Provider
With all of the 3PL companies out there, it can be hard to figure out which one to hire. While we personally think that we’re among the cream of the crop, here are a few things to consider as you choose a provider.
Some 3PL companies work with lots of smaller clients. Their processes are optimized for handling lots of variety—not lots of volume. Other 3PL providers focus more on larger, higher-volume clients.
Before you hire a 3PL company, make sure you understand your expected volumes and choose a provider that regularly handles that kind of volume. In addition, if you’re hoping to grow, make sure that your provider has the ability to scale easily with your business.
References and Past Performance
At VOX, we’re dedicated to creating lasting relationships with our clients and helping them grow as efficiently as possible. Talk to any of our clients and you’re sure to get a rave review. Plus, we make it a point of professional pride to ensure that your operation runs flawlessly.
Sadly, that’s not the case for all 3PLs.
With all of the 3PL providers around, there are more than a few bad apples. Before you hire a 3PL company, make sure you talk to their current clients. Get a feel for how they handle the client-provider relationship. Also, during the sales process, pay close attention to how long their clients last and things like the ratio of on-time to delayed deliveries.
Finally, you’ll want to make sure that your 3PL can integrate successfully with the technologies your business is using. For example, at VOX, our system can connect with almost any type of retail software or site, including:
- Amazon Prime (seller-fulfilled)
- And others
If a particular provider doesn’t integrate with your technologies, that should be an immediate red flag. The whole point of hiring a 3PL is to make it easier to run your business—not harder.
Picking a good 3PL provider is critical to your business’s success. No matter how good your products are, if your customers don’t receive your products in a timely, accurate manner, they’re going to be frustrated with your business.
If you’d like to see if VOX is a good fit for your logistics needs (especially if you’re looking for a 3PL in Utah), just reach out to us here! We’d be happy to talk to you about your fulfillment needs and show you what we can do for your business.