This is Part One in a two-part series. Read Part Two here.
Small business owners are constantly looking for ways to increase their efficiency and get more out of each and every dollar.
One frequently overlooked way of stretching those thin dimes is by outsourcing product fulfillment and logistics services to 3rd party logistics companies (3PLs). These companies specialize in warehousing and distribution, which can translate to huge savings for small to medium businesses that are currently spending their valuable time on these tasks instead of their core competencies.
How a 3PL Can Help Save Money
Every dollar counts when you’re a small business and labor is often in very short supply. That means that if you’ve got a seasonal fluctuation in orders, you may find yourself swamped, behind or hiring labor you can’t really afford just to fulfill product orders.
Instead of giving yourself another huge headache, consider a 3PL. They can save you money in a variety of ways, including:
Providing labor and warehousing on demand. When you’re running a business that requires a warehouse for shipping, you’ve got a costly proposition on your hands. Storage alone is expensive, especially if you’re not using all of the space throughout the year. Adding the cost of labor, electricity and maintenance raises the price of doing your own distribution dramatically.
A 3PL can provide both labor and warehousing for a fraction of what you can, especially if your facilities are underutilized. With a 3PL, you’re only charged for what space you use and the labor that’s actually involved in your distribution, no matter how busy or slow you are.
Speeding up order distribution. Maybe you were once able to get products shipped out your doors the same day as they were ordered in the past, but as your business grows that speed becomes both more crucial and more difficult to achieve. Hiring more people costs money, but orders that are slow to ship mean frustrated customers and eventually, fewer of them. In the age of Amazon, your shipping speed reflects heavily in your bottom line — a 3PL is staffed to get those orders out same day, every day.
Freeing up skilled labor. You hired artisans, marketers or other skilled labor to help your business succeed, but now that it’s growing you need all hands on deck to help get your products to customers. Using those skilled laborers as packers and pickers even a few days a week can be really costly, both in real dollars and in lost opportunities they might have created for you. When your web designer is packing boxes, the broken links on your site aren’t getting fixed — you’re definitely at (or likely well beyond) the point of needing the extra help a 3PL can provide for much less money.
There are a myriad of little ways that 3PLs can cut small business costs, but the biggest savings are often reflected in labor, warehousing and customer retention. Without them, you haven’t really got a business, do you? We’ll discuss other ways a 3PL can help small business in the second part of this two-part series. Stay tuned!
This is Part One in a two-part series. Read Part Two here.
