Top Benefits to Outsourcing Logistics for Businesses

Many businesses find it prudent to outsource their logistics to third-party logistics or 3PL professionals so they can focus on their core capabilities, such as designing, building, or locating products to sell, and improving their marketing and customer retention.

If your company is growing in size and scope and your staff lacks logistical expertise while you outgrow your current warehousing facilities, the most practical response is to outsource these tasks.

Likewise, if you are experiencing an unexpectedly large demand from consumers as a result of a successful marketing campaign or a captivating crowdfunding project, it may be best to team up with an experienced 3PL provider.

Outsourcing logistics occurs when an organization opts to hire an external company to improve and manage its supply chain.

Aspects of outsourced logistics include receiving goods into inventory, monitoring the inventory, receiving orders from customers, picking and packing products, ensuring accuracy in shipping, and arranging for fast, efficient deliveries. One chief benefit is that you can rest assured that your supply chain functions will be in good hands thanks to experts working on your behalf, behind the scenes.

When evaluating a third-party logistics company, there are some specific vital components to keep in mind, including warehousing, shipping and distribution, packing and kitting, and order fulfillment:

Rely on the 3PL firm’s warehousing facilities to safely store your products. If you sell items that have special storage requirements, such as low humidity for electronics, or cold storage/freezers for food products and nutraceuticals, make sure your 3PL partner is able to accommodate you.

As products arrive at the warehouse, the 3PL experts will receive them and log the arrivals in their computer system. As orders come from customers, they connect to the 3PL’s computer system, so the warehouse team can quickly and efficiently locate items on their shelves.

As retail customers place orders for delivery to their stores or when your business-to-business or direct-to-customer orders arrive, the 3PL team will process them for immediate shipping and distribution.

Workers pick and pack products from the shelves, guided by a computer system that streamlines their efforts. If you receive large, complicated orders, you can rely on the 3PL’s kitting and bundling team to accurately assemble items into one package or place items into a group of similar products. Bundling items is a time-tested way to get customers to purchase multiple products more conveniently.

Outsourcing logistics means that your third-party fulfillment team will handle the details of getting each order packed, labeled, and sent out as soon as possible to customers. That’s crucial for maintaining customer satisfaction and ensuring their ongoing loyalty to your business.

Companies that are new to the idea of outsourcing their logistics should know that there are many ways this can help your business grow, from saving on costs to taking advantage of the 3PL teams’ customized management systems and ability to streamline fulfillment operations, all done with open communication for maximum transparency:

You save money because the 3PL’s experienced employees will work much more efficiently than the people you scramble to hire to address increased demand. You also won’t need to cover the expenses involved in buying, renting, or building additional warehouse space, since the 3PL experts can easily assign more people to handle the task of quickly fulfilling orders as your products grow in popularity.

Your 3PL partner will have advanced, customized management systems to streamline the process of fulfilling orders and keeping track of inventory. Using the 3PL’s dashboard will enable you to see at a glance how much stock you have left and what items need to be replenished soon, taking advantage of artificial intelligence and machine learning to predict and manage shifting demand for products kept in inventory.

Because the third-party logistics company’s fulfillment team has experience and expertise in managing the supply chain, you can anticipate that operations will be much more streamlined than if you attempted to handle order processing on your own.

Select a 3PL that provides outstanding customer service and can respond to your inquiries without delay. They should offer transparency, such as giving you online access to details about your inventory from their computer systems.

You and fellow stakeholders in your organization will want to consider outsourcing logistics when you are growing your business and can no longer effectively take care of fulfilling orders with the precision and speed needed to keep customers happy and coming back for more.

Or, you may be a new startup company and want to remain agile and able to pivot quickly in the face of fluctuating market conditions and consumer demand. Perhaps your business is seasonal in nature, such as selling most of your products to people for summer vacation, or presents for end-of-year celebrations.