When your eCommerce business starts to grow you may need to take it a step further in the storage and fulfill section also. Once you have grown so big that you’ll need to have commercial warehousing to store your products. So you’ll need to Rent out a warehouse or hire a third-party logistics company to handle your outsourcing fulfillment.
So you’ll be thinking about what is the difference between a public warehouse and a 3PL (third-party logistics) company. They are similar in some ways but differ in many. Local warehousing gives you more control and 3PL gives you flexibility and scalability.
So to start with let’s check what are public warehouses? It is a company that offers warehouse space, they will provide you with machines and workers to move things around and manage them without any problems.3PL (third-party logistics) on the other hand refers to many services related to supply chain management Shipping, storing, distribution, returns, etc …It is not limited to just storing your products.
3PL Vs Warehouses
Why do you need a warehouse rather than 3PL, well one of the reasons companies do this is because they will have complete control over their inventory and warehouse operations. But this can only be done by such big companies who can take care of their fulfillment and everything related to it by them selfs. They can also offer extra services and charge extra fees for them.
But this can only be done by companies with so many resources, so when starting out a startup business or a small may not be able to afford this. That’s where 3PL companies come in. One Warehousing 3PL Brisbane summates that by hiring a 3PL company for your supply chain management you won’t need to worry about anything because they will handle everything from infrastructure to workload and maintenance.
They will provide you with storing space, will give you pallets racks to store your products, Will have in-house equipment. they will pack, ship, restoke, and even handle returns of your products. They will also take care of everything related to labor, safety, and taxes.
These third-party logistics companies are experienced in what they do which is storing, shipping, packing, picking, etc. by hiring a third-party logistics company you can stay stress-free about the shipping and all things related to it. You can also scale your inventory anytime you want, cause they can take care of it without any problem.
Third-party logistics companies use state-of-the-art technology for their warehouse management service, so they can handle all of your orders from your online eCommerce shops. they also provide real-time tracking of your products and inventory so you can restock when the inventory runs out.
When outsourcing warehouse operations, you may be able to store some of your Products in your customer’s location. This will help you to offer fast deliveries and save delivery costs.
3PL companies will take care you everything related to supply-chain management, They are the experts when it comes to handling supply-chain management, you can take care of other aspects of your business like increasing sales, marketing, etc.
Which one is apt for you?
Both services have their own benefits, but which one is apt for you?
The number of products
The number of products that you sell directly affects it from the very beginning, that is when you have a public warehouse you can choose how you stock and store the inventory as much as you want. But when using a 3PL service storing more than 3000 products gonna cost you some extra bucks. But if you have enough sales to compensate for it, it won’t be a problem.
Also when your customer is far away from the location of your local or public warehouse additional shipping charges and delivery time may occur. This can be avoided by outsourcing your inventory to a 3PL company. Because they have nationwide courage and can fast delivery speeds.
Fluctuations in the market
Another thing to consider is the growth of your business. If your business is having ups and downs in the market and your sales vary over the months, a huge warehouse may not be the best option for you. You can use 3PL companies to counter this fluctuation in business. With 3PL you can increase or decrease the size you the warehouse services that you pay for and also lay off some staff when the business is down. This flexibility can really help you with low or high sales times.
Return and replacement services
Return services are another thing to consider. Most of the third-party logistic companies will provide replacement or return services, while some may send it back to the seller. Contact the 3PL company that you plan to outsource for detailed information on their policies. If you sell products that may need to do a service by your company you can opt for it also.
You know if you want to deliver your goods like amazon, but you are a small business that cannot afford to manage your own fulfillment and warehousing then, the best option for you is to Outsource your fulfillment service. It may cost you some bucks but it is more flexible according to your business’s needs!
On the other hand, if you have all it takes you to handle the fulfillment service by yourself and have enough sales you can always opt for local commercial warehousing.
In conclusion, we can say 3PL companies with state-of-the-art technology are more cost-effective than owning a public warehouse unless your company is not amazon. All jokes aside with the scalability and flexibility of third-party logistics small businesses can do their fulfillment services more cost-efficiently and stress-free than Local commercial warehousing.
When choosing your 3PL partner keep in mind that always choose a reputed 3PL company because they are working with hundreds of customers, so select one that responds in time, ships in time. For your time is also valuable, so select a 3PL company that does its job in time.