When considering scaling your eCommerce business, many picture success as owning a warehouse full of their own stock and orders flying out the door. But in reality, managing your own warehouse may not make the most business sense.
On the one hand, while owning or renting a private warehouse can provide benefits such as complete control over all aspects of your operations, it does not come without limitations.
Most significantly, the increased risk and liability related to increasing your property and staffing portfolios.
In contrast, an outsourced multi-user 3PL partner could provide a lower-risk and lower-cost solution that can scale as your business grows.
The benefits of using a multi-user 3PL Warehouse
1. Reduced financial risk
When utilising your own warehouse spacing, ultimately, you are responsible for paying for all the costs associated with running a warehouse, such as labour, operations, technology, equipment and rent. On the other hand, when working with a multi-user 3PL provider, these costs have already been accounted for by the provider and built into your pricing, meaning you’ll have no unexpected shocks
2. Greater flexibility
Very few brands have a consistent flow of orders throughout the year, so it’s typical for operations teams to experience peaks and falls in the workload. This, in turn, can result in periods where your warehouse and your team are left standing around with little to process, but then in times of peak demand, they’re understaffed and struggling for space. This is one of the significant benefits of working with a multi-user 3PL warehouse as they can scale as you need more efficiently and save you money.
3. Improved expertise
When working with a 3PL partner, you’re working with a team of logistics experts who specialise in delivering exceptional customer service and efficient order processing. 3PL partners have optimised the fulfilment process to maximise storage space and reduce processing costs while investing in the best technology. While expert-level fulfilment could be achieved with your in house team, it is not without the ongoing cost of training, development, and technology.
4. Access to exclusive shipping rates and cut-off times
Due to the large volume of orders processed by multi-user 3PL providers, they can negotiate better shipping rates and later cut-off times with shipping companies, with many passing this saving directly onto their clients. So while cheaper shipping costs for brands typically result in slower service for your end customer, it is the opposite in the instance of a 3PL.
5. Access to additional on-site services
When running your own operations facilities, it’s unlikely to make financial sense to have an in house value-add services team who can handle repairs or product cleaning. Therefore many own-brand warehouse teams rely on a network of outsourced suppliers that they can ship their products to as required. However, with a multi-user 3PL, the combined demand for these services from across all of their clients justified the need. Therefore you can benefit from accessing these additional services without incurring additional cost and time implications that come with sending inventory to other locations.
How Do I Get Started With A Multi-User 3PL Warehouse?
Overall, a 3PL partner can improve your margins while improving your operational efficiency and customer experience, but it’s essential to work with a partner that is the right fit for you.
If you’re already processing significant eCommerce order volumes, but you’re not sure what’s the next step for your operations, check out our Next Stage Fulfilment Whitepaper.
Alternatively, contact us today for a chat to see what help and advice we can provide.
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Gary Rees is the owner of Synergy Retail Support, one of the leading SME fulfilment centres in the UK. Having successfully grown the business for over 30 years and with relationships with most household brands, he now looks to partner with customers rather than just act as a supplier so that both parties can grow together. Gary has extensive knowledge in retail compliance, production technologies, shipping details and customer service.
Feel free to contact me personally if you’d like to discuss your business.
01604 412 290