Like most things in life, business development comes with growing pains.
And the most significant pain point of such is the logistics side of things—shipping, fulfillment, inventory, and everything in between.
It’s no wonder that 9 of every 10 Fortune 500 companies use third-party logistics (3PL) providers to take the load off their shoulders. Moreover, eCommerce businesses are fueling the growth of 3PLs worldwide—with the market expected to reach a value of $1.75 trillion by 2026.
And yet, there are 3PL misconceptions that might be stopping you from taking the necessary step in business growth. What seems like cons, however, aren’t as disadvantageous as you might think.
So, read on—we’ve busted the top myths about 3PL warehousing below.
Myth #1: You lose complete control when you work with 3PLs.
Yes, inventory stored in a 3PL warehouse is not immediately accessible to you. But working with a 3PL allows you to regain control, where the responsibility of shipping and fulfillment goes to professionals that won’t make novice mistakes.
A good 3PL provider will provide reports and analytics as well, allowing you to continuously improve the business decisions you make while your company grows. Quality 3PLs will make your logistics easier to manage and understand, which leads to simpler operations and a better grip on your fulfillment process.
Myth #2: 3PLs are only for big companies & big volumes.
Third-party logistics companies can adjust to smaller operations. They are not just for giant companies. Reliable 3PLs can understand your requirements and adapt accordingly. Plus, working with one means actively preparing for future business growth. You’ll be ready to scale anytime.
Moreover, 3PL warehousing and distribution can potentially reduce overhead costs and free up capital that you can use elsewhere.
Myth #3: 3PLs have many hidden fees.
3PL providers’ pricing may be complex, where you’ll see the likes of inbound and outbound costs, customs and duties, storage costs, and even additional fees for custom packaging. But these costs aren’t hidden. Instead, they are clearly laid out in the invoice, assuming that you asked the right questions before signing a contract with a 3PL.
A good 3PL provider will tell you what they provide, how much it’ll set you back, and ensure that you won’t get caught off guard by its services and cost.
Myth #4: 3PLs are only packing and shipping, sometimes storage.
Another myth about warehousing is that they’re only for packing, shipping, and storage. But the reality is that they office extensive services like the following:
- Real-time data updates and record retention
- Direct and custom delivery options
- Sorting, inspecting, and quality checking
- Protecting products from damage and thefts
- Optimized routes for faster transportation
- Exclusive container options to cut down shipping costs
- Advanced technology to automate the fulfillment process
Not working with a 3PL provider means losing all these benefits that affect both your business and its customers, many of which will appreciate getting their orders easily and quickly. This insight is especially true for logistics serving the eCommerce space—where customers want to receive orders instantly.
Myth #5: 3PLs can prevent business growth.
Customers are obsessed with getting their products immediately today. So, your business will gain a competitive edge by having the best customer fulfillment process. In that sense, 3PL providers boost your growth rather than pin it down.
When you work with experts, you can also adapt to changes and ensure that you save time and money long term. Plus, you’ll get market exposure and better efficiencies in order processing, transport, and distribution that outweigh the pros of using an in-house team.
Myth #6: Fulfillment is easy and not a priority to outsource.
While a good product is key to your success, an efficient and reliable product distribution process is equally as important. You may run into order fulfillment issues while your business is growing, where issues like handling multiple vendors in a single route will only stack up over time.
Don’t underestimate the complexity because doing so will lead to order fulfillment delays, unhappy customers, and eventual loss of sales. The earlier you can outsource fulfillment to experts, the earlier you’ll have access to logistics expertise and resources that support your business growth.
Myth #7: 3PLs damage your customer’s experience.
You may think that your business is too small or niche for third-party help to understand. But the reality is that modern 3PL companies have the latest technologies and data science to recognize consumer behavior patterns, emerging industry trends, and more.
Many 3PLs are equipped to deliver reliable order fulfillment services that meet your market’s expectations, giving them excellent customer experience.
Plus, customer satisfaction and market reputation are as crucial to their business as it is with yours, so they’re constantly looking into customer and vendor data to improve their services. As such, they’re in the perfect position to provide valuable business insights for your company to act upon.
Looking for a reliable 3PL company to work with?
At San Legend, we help eCommerce businesses scale their brands and break into new markets by providing customized, agile, and forward-thinking third-party logistics solutions. Reach out today to see how we can help.