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How To Pick The Right Service Provider For Your Logistical Needs

How To Pick The Right Service Provider For Your Logistical Needs

How to Pick an Appropriate 3PL Service Provider

Different kinds of businesses require different kinds of 3PL service providers that suit their logistic needs or demands. You can select the 3PL service provider that best suits to your logistics needs or demands based on the factors that we have mentioned below. A portion of these variables refer to your business and the other refers to the 3PL’s you should take into account.

Online transactions are gaining huge momentum due to its growing popularity among consumers. Due to the high expectation of the consumers, there is too much pressure on the retailers to satisfy the rising demands of the customers.  And there are certain companies which has created a high expectancy ratio among the customers for low cost and express delivery.

It was discovered in a survey that:

•    46% of clients who relinquished their carts expressed it was on the grounds that delivery charges were excessively high.

•    Then again, 69% of those studied expressed that they are significantly less liable to shop with a retailer again if their package isn’t channelled within two days of date guaranteed.

•    The expense of order processing is usually 70% of the total sum of the order value. (need to check the reference as does not seems appropriate )

How can your business stay profitable when customer demand for cheap and timely delivery and it takes so much of your profits? Therefore various e-commerce businesses resort to Third Party Logistics (3PL) to enhance their speed and efficiency and lower their expenses.  Right, Third Party Logistician can prove to be an asset for developing business. However, a wrong one can cause more issues. Therefore careful consideration is of prime importance before choosing a service provider.

Guidelines for choosing the “right” 3PL:

1)    Evaluate Your Goals and Budget

Before you begin to search for a 3PL service provider, the precise layout is what’s essential to you and what your budget may allow you to afford.

•    Do you need 3PLs that work out of numerous locations?

•    Do you need a 3PL that, you can contact frequently and who performs ordinary order processing or would you like to have them as an additional hands-off task?

•    Do you need a 3PL that can deal with food or other edible items, medical supplies, or any other particular items?

Each 3PL Company is a Potential Partner to you

A 3pl will not only work for you but it represents your company as well, so don’t hesitate while asking difficult questions or posing for queries and do take a follow up on their references. It’s a lot simpler to leave amid the reviewing stage than when they have your stock and are in the middle of processing your requests.

2)    Innovation should be an important component of their organization :

The world of distribution, shipping and warehousing are constantly evolving with the latest trends and newer innovations. If a service provider isn’t innovating according to the latest trends and tech then your business will suffer. Ensure that your potential 3PL keeps on innovating their technology. Get some information about their most recent developments /achievements in technology and other sectors as well. Are all of their systems up-to-date?

3)    Get Yourself Properly Acquainted with the Staff and the Management :

Companies are constantly growing, expanding and changing. Ensure that your fulfillment is in good hands by assessing the general knowledge of the staff. Check to see how well they have been trained. Not only leadership needs to be well trained. A skilled workforce contributes to the smooth functioning of any workforce or organization.

Also, ask about their process of succession planning. A succession planning process means that even if there’s a change in the key leadership of the company, their businesses will continue to run smoothly. If management changes, then your company shouldn’t be affected by it. Proper planning by your 3PL service provider will help you to ensure that.

4)    Does your Service Provider have growth potential and Expandability?

It takes a 3PL that keeps growing with you. See if their warehouse infrastructure is big enough, the one that can accommodate your growth. Your business will not only grow but retail is something that is also susceptible to both busy and slow seasons. A 3PL should always be prepared for your inventory and your requirements to be met during busy seasons (for example on vacation). During the slow seasons (i.e. January and February), they should also scale down to save your money.

5)    Make sure they have financial stability

You want the 3PL you choose to stay for the long haul to feel confident.Many small firms suffer and even get out of business if their 3PL fails and they have to move their stock up and quickly find another. In addition, 3PLs which are at risk may be too thin to give then care and efficiency that needs to be given to your orders. Find at least the last 3 years of their profit and loss data. You need to assure that they are not on the brink of financial meltdown and are willing to give proper attention to your business.

6)    Inquire About Their Disaster Management Plan

Catastrophes are becoming more and more common: record losses from natural disasters have occurred over recent years. In the event of a disaster, you need to prepare your company as well as the 3PL provider for that. Take it as a red flag if they are not prepared for energy failures, flooding or lack of human resources.Most companies are affected by disasters. The bettera 3PL is, the faster it will recover after a catastrophe.

7)    Take Your Business up a Notch with your 3pl Service provider

Your business can flourish and grow even more with the right 3PL provider. You can find the one that works best for you in your budget once you know how to choose a 3PL. You can consider a 3PL which takes your inventory and brand seriously,  this is possible by asking the right questions and doing your homework.

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