One of the first rules of running a business is, “focus on your strengths.” It sounds easy in principle, but for medium-sized companies undergoing rapid growth, it’s often hard to discern what those strengths are when every day brings new opportunities and challenges. Logistics is a tricky area. In today’s tech-intensive retail environment, customers expect to get their orders quickly, reliably and transparently. When they don’t, they will walk away and take their business elsewhere. The good news is that the rise of online shopping has pushed a slew of new, tech-savvy logistics companies into the sector while forcing established companies to invest in making their operations more digital and agile.
You’ve Got Choices
Let’s start with scalability because that’s where a lot of businesses run into supply chain problems. There once was a two-person startup that was growing steadily until they were mentioned on The Colbert Report, and nothing could have prepared them for what happened next. In the span of 24 hours, they went from local business to national retailer doing twenty times the sales – and nobody was prepared. The ‘Colbert Bump,’ a term coined to describe a surge of interest or business in the wake of a mention on TV, is an extreme example – but it makes for an interesting case study for scaling. It quickly became clear that they couldn’t handle their own fulfillment anymore. In addition to the complexities of hiring and training more staff, it was a question of simple economics. They needed a national presence and that meant forward shipping their products closer to major markets to deliver ‘on demand.’
If you’re going national, you need a national partner that works with a spectrum of carriers and different modes of transportation, with competitive pricing.
The next couple of months they’d learn that if you’re going national, you need a national partner that works with a spectrum of carriers and different modes of transportation, with competitive pricing. That way, you’re sure that your product is where it’s supposed to be and you can align your inventory with expected sales.
Stay in Control
Outsourcing your logistics shouldn’t mean losing visibility. It should mean the opposite.
Outsourcing your logistics shouldn’t mean losing visibility. It should mean the opposite. The right logistics partner will create transparency in hidden corners of your supply chain that you didn’t even know existed. Whether you like it or not, your in-house distribution is already working with multiple partners – and that’s problematic. You might have a separate partner for pick up, one for distribution, one for packaging and then one for returns. That’s an incredible amount of time spent calling multiple vendors and carriers, especially when there’s uncertainty in whether you’re getting the right services, process transparency, and competitive prices.
A 3PL provider allows your company to integrate all of these costs and pay a single vendor, rather than several for your packaging and shipping needs. In addition to lower costs, one dynamic partner lets you allocate more resources toward growth – and that’s what you’re good at. There’s also an important customer service advantage to partnering with a 3PL. When your customers order from you, their three most important interactions are with your sales platform, customer support team, and the company that delivers their order. The right 3PL partner can use their expertise and infrastructure to exert that kind of control over the delivery process. That way, you can be assured that the deliveries are happening on time and you can pass on that level of visibility to your customers.
Built to Scale
3PLs are built to handle higher volumes of orders with increasing logistics needs. Your company might be able to handle fulfillment today, but as your market expands it will take up more of your time and might exceed your level of expertise. Bringing in a logistics partner leverages economies of scale. With higher volumes of shipments, the rates you’re charged are increasingly important. A single 3PL partner centralizes organization, meaning real-time visibility over your supply chain and more customizable shipping options.
The right 3PL partner will also increase transparency and that’s going to make your customers happy, while cutting costs.
That’s what 3PLs are designed to do. Apart from cutting payroll with a much smaller logistics operations staff, you can opt for a specialized in-house logistics department that interfaces with your 3PL. No matter how good you are, your 3PL is better when it comes to managing inventory and logistical distribution. When choosing a 3PL partner, make sure that they have developed software and tracking systems, which can be used to generate data that will allow you to reach your customers more efficiently. A tech-savvy logistics partner can help your company understand customer behavior and keep you ahead of industry trends. The right 3PL partner will also increase transparency, and that’s going to make your customers happy while simultaneously cutting costs.
Working with a 3PL like BlueGrace
BlueGrace provides scalability for growing companies to achieve their goals without labor or technology investments. With a fully built-out national network and global partners, BlueGrace makes it easier than ever to reach your markets in an efficient and cost-effective manner. Their expertise and processes provide clients with the bandwidth to operate efficiently and drive direct cost reduction, backed by procurement and dedicated management. For more information on how we can help you analyze your current freight issues and simplify your supply chain, feel free to contact us using the form below: