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7 Factors For The Best Third-Party Logistics (3PL) Provider

Business operations are becoming fast-paced and innovative. There is even a cloud-based point-of-sale system! This is in response to increasing and changing consumer demands.

To improve your performance, you will need a third-party partner that is affordable and reliable. Hence, it is becoming more and more challenging.

But like what tycoons would say, there is no shortcut to success. Nonetheless, you can ensure the growth of your business when you understand what 3PL is.

What is a 3PL?

Short for third-party logistics, a 3PL provides services that you can incorporate in your existing supply chain. Such service providers specialize in coordinating and moving items to different locations. Thus, it would be ideal to have a logistics partner if you run an online store.

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Choosing the right third-party provider for your e-commerce business can be daunting.

If you think that you need a 3PL partner for your online business, we have listed down seven crucial factors that you should consider:

Goals

When choosing a 3PL services provider, you need to identify what channels you want to expand to.

For example, there are logistics services that you can integrate with your existing POS system. Doing so helps you automate your order forwarding, inventory update, and invoicing.

Keeping your goal in mind helps build your business requirements when it comes to choosing a 3PL provider. It also enables you to outline the problems you want to solve and the issues you’ll face in the future. This helps you trim down your initial list to only a handful of 3PLs equipped to meet those challenges.

Process

An excellent 3PL gets the job done. They are efficient in executing a strategy that can help you save from operation costs and expand your market.

You can check out their website to see how they do things. You can also ask for referrals from previous clients. When they sing praises about a particular 3PL service provider, it can mean that they go above and beyond client expectations. It can be going the extra mile or adapting to unexpected changes.

In short, their client-base will speak volumes of them as a company. If your 3PL provider has loyal clients who have been with them for years, you know that they’re probably doing something right.

Another sign of whether a 3PL provider is good is its awards. A company or organization that provides excellent service should be collecting recognition.

Experience and Reputation

3PL providers who have been in the industry long enough know well enough the procedures and challenges may arise. It would be ideal to choose a company with two or three years of experience in the field.

Apart from experience, a company’s reputation is another thing that you need to take into consideration. Faulty practices and negative reviews contribute to the bad reputation of the company.

One of the most important things to consider is monitoring safety ratings and a carrier compliance management system. It’s also vital that you check the clients the provider has serviced in the past, and how many became long-term clients.

Customer Service 

Does your preferred logistics partner focus on responsiveness, customer service, communication, and problem-solving?

Almost any other logistics provider out there claim that they have excellent customer service. But keep in mind that excellent customer service isn’t an accident.

So how would you know that their claims are valid?

It would help if you asked around for references, particularly from companies with the same needs or are in the same industry as you. If a 3PL company always provides excellent customer service, it can be due to a well-documented and streamlined process.

Scalability

A great 3PL company must have the capacity to scale its operations to meet its clients’ growing needs.

For instance, bi-directional scalability will have a direct influence on your supply chain’s efficiency. Every company strives to grow, and perhaps go global.

But at the same time, every company also has its ups and downs. Hence, it would be ideal for a 3PL provider to be responsive and scale the operations up or down whenever necessary. This is to maintain an adequate flow of goods and cut costs. Plus, it is imperative that they can handle sudden spikes when market demand for your products skyrocket.

The key here is finding a logistics partner that can scale without hassle, depending on your needs and your consumers’ behavior. This includes multiplying or aggregating shipments.

Company Stability

It would help if you chose a logistics provider that shows stability.

Keep in mind that the top suppliers will always be consistent. So, research how long the company has been around. When something unprecedented happens, and your logistics provider couldn’t deal with the fall-out, you can suffer the consequences.

Fortunately, this concern is eased when you know that your service provider has built a name and reputation for themselves for years.

Capability and Integration

A 3PL company that puts innovation and technology at the forefront is always worth considering.

A leading 3PL may always want to invest in the latest technologies to provide real-time data and feedback in all your operations.

When evaluating potential providers that you want to work with, ask probing questions. Some examples are to know what systems they are using, where they store sensitive customer data, and how they secure it.

You can also take this opportunity to test how fast they are in responding to a client query. That way, you will know whether they have a dedicated customer support team.

Final Thoughts

It can be challenging to run and ensure your e-commerce business’s success. But when you work with a competent 3PL company, you are sure to enjoy excellent business solutions.

Keep in mind that a reliable 3PL service provider allows you to run your operations with ease. Hence, you can save money from operation costs, keep your customers happy, and make your online store grow.

But here’s the thing: Not all 3PLs are created equal.

That’s why we recommend that you keep the crucial factors listed above in mind. This is to ensure that you can choose the right logistics partner that can cater to your business needs.

About the Author

Avatar for Jake Rheude

Jake Rheude

Jake Rheude is the Director of Marketing at Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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