What is a Third-Party Logistics Company?

If you’re like most business owners – particularly those in retail – you’ve heard of 3PL companies. But what is a 3PL company, and how can it help you reach your goals?

What’s a Third-Party Logistics (3PL) Company?

Third-party logistics, commonly referred to as 3PL, is a vital component in supply chain management. It enables business owners to outsource distribution and fulfillment services, either completely or in part. For most business owners, it’s a tremendous relief – and it enables them to focus on growing the business rather than sucking them into time-consuming details.

The History of 3PL

Third-party logistics are fairly new. In the not-so-distant past, retailers would connect directly with consumers. They’d have to sort out the logistics on their own, which was inconvenient on both ends. The retailer had to warehouse the goods, arrange for shipping and deal with customer issues.

But in the 1970s, 3PL companies started stepping in to streamline these retailers’ processes. With a logistics company to handle warehousing, fulfillment, shipping, and transportation, retailers were suddenly able to give customers better experiences. And when customers have better experiences, they shop more.

What is a 3PL Company SQ

How Do You Know if You Need a 3PL Company?

Fulfilling orders is the most time-consuming task any retail company has to face. If that’s taking up so much of your time that you can’t focus on marketing, improving products and services, or running the financial side of your business, it’s past time to look for a 3PL company. A 3PL company can help you:

Order Fulfillment Services

Most experts agree that if you’re fulfilling more than a handful of orders a day – provided that you can afford a small increase in your current shipping expenses, or that your shoppers can cover for it – it’s worth investing in a partnership with a 3PL company. You’ll have more time to focus on the other important aspects of your business without worrying about your customers’ experiences.

Warehousing Services

Storage is expensive – and it can take up far more room than you have, particularly when you’re enjoying a healthy boom in orders. Some 3PLs can warehouse your products for a fraction of what you’re spending now, which can also help you free up space for workers, research and development, and on-site shopping.

Accommodate Growth

Logistics includes streamlining processes that you may not have down to a science. For most business owners, inventory tracking is a big challenge – and it’s a tremendous financial drain. The right 3PL company can track your inventory, schedule pickups, and deliveries, and provide you with status notifications and exception reporting on-demand.

All this frees you from the burden of employing an entire logistics department (or worse: doing it all yourself) so you can focus on business growth. 3PL is often the most logical solution when you’re dealing with global fulfillment, too, because of the special rules and mountains of paperwork involved in overseas sales and shipping.

Related: Looking for the best 3PL company for your needs? 

3PL and Your Company’s Growth

For most business owners, working with a 3PL company is vital to growth and maximizing profits.  It’s crucial to understand the importance of third-party logistics services. Using a third-party logistics company to tackle big issues like warehousing, order fulfillment, shipping, and customer receipt can make a tremendous difference in your bottom line.

Get in Touch with Us

Have questions or ready to streamline your logistics? Reach out to us now, and our experts will provide personalized solutions to optimize your supply chain.

Call Us Today

(256) 831-5580