When it comes to running your business as an eCommerce business owner, you already have a lot on your shoulders. Dealing with supply chain issues is not something you want to add to your to-do list. Juggling customer service, inventory shortages, and product returns will take up a lot of your time and may have a negative impact on your bottom line. Rather than wasting resources trying to establish and optimize your supply chain, you should outsource supply chain management to a professional.
Outsourcing in supply chain management to a 3PL is an excellent alternative if a company’s supply chain gets too complex to handle internally. You’re still in charge of the overarching logistics strategy and processes, but a third party handles the time-consuming manual tasks. As a result, working with the appropriate partner can make or break your business’s logistics, customer service, and repeat sales. Using an eCommerce fulfillment center such as SPExpress relieves you of the worry of navigating the eCommerce fulfillment landscape. Your supply chain is crucial to your business’s success, but without the proper technology, staffing, and knowledge, the time and money spent on logistics can quickly pile up, and there’s no assurance that doing it yourself will be cost-effective.
What is Outsourcing in supply chain management?
When you outsource your supply chain management, you’re entrusting your warehouse, eCommerce fulfillment, and shipping procedures to a third-party logistics (3PL) provider, which will help you enhance your supply chain. Rather than investing in the infrastructure needed to compete, you outsource your company’s logistics to a respected supplier to help maximize profits while freeing up your time to focus on expanding your store.
The Top 6 Advantages of Outsourcing eCommerce Fulfillment
Outsourcing your supply chain management has a number of benefits that can help your business become more reliable and profitable. Finding the ideal 3PL partner to handle your company’s particular demands is crucial to getting the most out of a successful engagement.
There are numerous benefits to working with a third-party logistics supplier.
Here are a few of the most frequently mentioned advantages of outsourcing eCommerce fulfillment:
- Expertise in the logistics industry and cutting-edge technology
A logistics service provider greatly increases an eCommerce company’s team’s knowledge. A third-party logistics provider (or 3PL) serves as an extension of their client’s businesses, providing them with access to a variety of industry experiences and technology. When it comes to formulating strategy or managing supply chain difficulties, firms benefit from having logistics specialists on their teams. 3PL partnerships minimize the need to deal with issues such as retail compliance standards and pricey real estate management. Advanced technology, efficient processes, and strategic ideas are all available to logistics professionals who can help their clients enhance their supply chain management.
- Cost Savings
Trying to manage your company’s whole supply chain in-house is a costly endeavor that necessitates logistics skills to avoid wasting money. The most significant benefit of outsourcing supply chain management is that it lowers the expenses of warehousing, overhead, eCommerce fulfillment, and shipping. You can rely on the experience of a professional 3PL business to help you streamline your eCommerce fulfillment processes and lower overall costs by hiring one. Streamlining your logistics will also help you stay competitive by allowing you to offer more economical delivery to your clients.
- Faster Delivery
You may guarantee fast and reliable shipment to your clients by outsourcing fulfillment to a 3PL provider with a large fulfillment center network. Instead of shipping your complete inventory from a single fulfillment center, you can split your inventory among many eCommerce fulfillment centers to reduce shipping times and costs for your consumers, regardless of their location. You must do everything it takes to get a competitive advantage in the hyper-competitive eCommerce landscape. You can provide unique incentives to your clients, such as free shipping and expedited delivery if you have a large shipping network.
- Greater adaptability
It will be easier for you to adjust to changes in client demand if you outsource your supply chain to a 3PL partner. You can downsize or expand your inventory without having to worry about changing your warehouse space or staffing numbers if you outsource. You also have access to a large network of fulfillment centers, which means that when you’re ready to expand into a new area, your 3PL partner will already be prepared.
- Industry expertise
3PL companies have extensive market expertise and insights, and they can predict what will perform best for their clients. They have the technological capabilities to provide advanced reporting and inventory management, as well as to follow the entire logistical process. When a company chooses to collaborate with a third-party logistics provider, they reap all of these benefits because the 3PL becomes an extension of their team.
- More Focus on Growth
Not only can you save money by outsourcing your supply chain, but you also free up your most valuable resource: your time. You can spend more time focusing on changing market conditions and consumer preferences instead of committing your resources and efforts to warehouse and fulfillment services. Your fulfillment partner will help you expand into new locations and boost product inventories as your business grows. They can also give you advice on how to develop and improve your fulfillment strategy to better meet the needs of your clients. When your store does well, so does your 3PL partner, so they have a vested interest in seeing you succeed.
- Opportunity for Scalability and Expansion
When you outsource inventory management to a third-party logistics provider, you may scale and grow your business. Many eCommerce companies begin by managing their own supply chain. However, as a company grows, tasks such as order fulfillment, transportation coordination, and reverse logistics become more difficult to manage. When a company has to extend and expand, outsourcing logistics to a third-party logistics provider can be quite beneficial. Another instance is when sales are at their highest.
An eCommerce company may have high demands for a brief period of time during the year and not want to invest in real estate or staffing to match that need. A third-party logistics provider can supply the resources that a company needs to meet demand and prevent missing sales. Logistics outsourcing is a smart long-term strategy for firms to establish a flexible and trustworthy supply chain strategy.
Most Frequently Asked Questions
Outsourcing your supply chain management is a major step in your business’s path, but it’s a critical one that may lead to rapid growth.
Here’s a rundown of the most frequently asked questions about outsourcing supply chain management:
What is 3PL?
3PL = 3rd Party Logistics
3PL (3rd Party Logistics) is the outsourcing of a company’s warehousing, fulfillment and/or transportation services to a 3rd party company. At Precise Services we are your warehouse operation. Instead of leasing a building, hiring a manager and staff, investing in a WMS (Warehouse Management System), and negotiating your own rates with the carriers Precise Services will handle all these elements.
Precise Services is your 3rd Party Logistics partner; warehousing and shipping product on your behalf. This allows your company to focus on manufacturing, marketing and selling your product. Precise Services takes away the worry of warehousing and logistics while letting you focus on running your company.
Why Use 3PL?
Because Someone Else Can do it Better
Even if you have resources available, another organization within the supply chain may be able to do it better, simply because of its relative position in the supply chain, supply chain expertise and economies of scale.
To Share Responsibility
3PL companies can share responsibility for managing global supply chains, keeping customers and stores properly stocked, and delivering the perfect order every time.
To Re-Engineer Distribution Networks
Logistics outsourcing can be a quick way to re-engineer distribution networks to meet global market demands and gain a competitive edge. Did you know that you can drill into the history of each SKU number tracked by P3PL and view when and to where every piece was shipped, when new stock arrive and how many?
Benefits of Using a 3PL
– Reduced total delivered cost for your customer
– Local expertise in new markets
– Improved customer service through shorter shipment times
– Reduced inventory costs through better management
– Cost benefits through volume shipping discounts
– Improved focus on core competency
– Increased shipment visibility
– More scalable logistics operation and cost model
– Improved variety of technology and service
– Risk reduction
What Does It Mean to Have Your Supply Chain Outsourced?
Hiring a third-party logistics business to handle your warehousing, fulfillment, and shipping procedures is known as outsourcing your supply chain. Outsourcing your eCommerce supply chain to a logistics professional can help you optimize your supply chain while allowing you to focus on other aspects of your company.
What Are the Risks of Outsourcing?
Choosing the wrong 3PL supplier is the major risk of outsourcing your logistics. You should be aware of any hidden costs, how a 3PL manages customer assistance, and whether their fulfillment network serves the areas where your consumers are located before choosing a partner. The benefits of outsourcing your supply chain will far outweigh any dangers if you can do these three things right.
What Are Some of the Advantages of Outsourcing?
If you’re a good match, outsourcing your logistics to a 3PL provider has a lot of advantages. Reduced prices, shorter shipping times, and more time and energy to focus on how to build your business are the main advantages.
Why choose SPExpress?
SPExpress can help you enhance your supply chain by integrating flexible, dependable fulfillment with powerful, real-time technology. We make it simple and cost-effective to reach your clients with warehouses across Canada. When you outsource to SPExpress, you gain access to a variety of tools and services to assist you in achieving your objectives.
We can provide customized eCommerce solutions to best fit your business model, whether you’re a traditional retailer, an online retailer, or a subscription service.
We determine your rate according to the:
– Quantity and method of goods received
– Storage cost which is on a per cubic meter basis;
– Complexity of the 3PL handling process you require;
– Shipping method and order quantity
Are my goods Insured?
We have general liability insurance which covers the warehouse; however we recommend that customers insure their goods through their own insurance provider.
Do I need to sign a contract?
Yes, we will sign a service agreement to protect the rights of both parties.
Are the goods being shipped to your Vancouver or Montreal warehouse?
Currently, only the Montreal warehouse serves for 3PL order fulfillment. We are working on opening the Vancouver warehouse to meet your needs in west Canada soon!
Is there any set-up fee or account fee?
No, the initial setup is totally free. This is especially friendly to start-up businesses and SMBs who have not finalized their distribution strategy yet and who wish to try different channels.
Is there any minimum threshold for the business?
No, we’d like to support your business from the scratch!
Do I need to pay a monthly fee for the service?
For start-ups and small businesses, you are free from the monthly fee. Only clients with more than 100 SKUs will be charged the project management & IT support fee of $100/month.
SPExpress automates your business by combining flexible, dependable fulfillment with cutting-edge, real-time technology. Contact one of our fulfillment specialists today for more information on how to put your business on autopilot.