Don’t Rush the Move: 10 Signs Your eCommerce Business Isn’t Ready for 3PL yet

Third-party logistics providers (3PLs) can be a game-changer for e-commerce businesses. They offer access to expertise, technology, and resources that can streamline fulfilment, reduce costs, and improve delivery speeds. But outsourcing fulfilment isn’t always the right call. In fact, jumping in too soon can lead to higher costs, slower deliveries, and a negative customer experience.

When Shouldn’t You Use A 3PL?

In our experience as a multi-channel fulfilment and return service, there are 10 signs that a business isn’t yet ready for 3PL:

Reason to outsource usa a 3PL fulfilment partner 1

You’re just starting out

Embrace the early days! Fulfilling orders yourself allows you to learn the ins and outs of your business and understand your exact needs. This knowledge will be invaluable when choosing the right 3PL partner later.

Reason to outsource usa a 3PL fulfilment partner 2

You have a low order volume

When you outsource your eCommerce fulfilment, you’re paying someone else to store your products. This storage fee is minimal with fast-moving stock because items don’t require holding for long. However, if you have slow-moving inventory, this storage fee adds up and dents your profits. Keep slow-moving stock in-house or find a 3PL with low long-term storage fees.

Reason to outsource usa a 3PL fulfilment partner 3

You have tight margins

Outsourced fulfilment has many cost benefits. However, if your products have a small or micro profit margin, it’s likely to be more cost-effective to fulfil orders in-house by yourself. That’s not to say you can’t outsource fulfilment if you want to, but the return on investment will be significantly smaller than using outsourced fulfilment for products with larger margins.

Reason to outsource usa a 3PL fulfilment partner 4

Heavily Customised Packaging

Something we see in the luxury market is tailored packaging – picking different coloured ribbons, boxes and inserts to complement the ordered products. This is great for high-end brands delivering a personalised customer experience but can result in costly 3PL fees and skills, making it cheaper to conduct in-house.

Reason to outsource usa a 3PL fulfilment partner 5

You don’t have SKUs or barcodes

A 3PL requires your products to have identifiers to quickly recognise and locate items when an order comes in. These are usually in the form of a barcode. If you don’t currently have barcodes or your manufacturer cannot provide them, you will need to implement them before using a 3PL.

Early cut-off times are usually a result of inadequate technology and capacity or facilities located further away from the delivery hub. But they can significantly impact your ability to attract and retain customers who value fast shipping.

Reason to outsource usa a 3PL fulfilment partner 6

You operate a fragmented supply chain

Shipping products to a fulfilment centre and having them processed costs money, and this cost significantly increases if you’re making multiple shipments of low quantities. Therefore, using a 3PL when operating a fragmented supply chain or working with suppliers who can’t send products in bulk can be cost-prohibitive.

Reason to outsource usa a 3PL fulfilment partner 7

You sell hazardous materials

Not all 3PLs handle hazardous materials, affecting more businesses than you might think. If you want to use outsourced fulfilment for such products, look for a 3PL specialised in handling hazardous products, with the necessary licences and training.

Reason to outsource usa a 3PL fulfilment partner 8

Your products have a micro shelf life

While established 3PLs are experienced in storing, handling, and shipping expiry-dated products, if your products have a micro shelf life, this could prohibit outsourced fulfilment. For example, if you sell freshly baked bread, the time it takes to ship loaves in and out of a fulfilment centre will take up too much valuable time.

9 reasons not to outsource your 3PL

You want to keep your store small

Not everyone has ambitions to make it big in the field of eCommerce. Hobby sellers and passion projects often use online sales as an added bonus, with no big plans to expand or take over the world. That’s ok. If you’re comfortable managing in-house fulfilment and want to continue as a small or part-time seller, don’t feel pressured to use a 3PL provider.

10 reasons not to outsource your 3pl

You haven’t found the right 3PL

Your fulfilment costs are spiralling out of control, you’ve maxed out your internal capacity, you’re struggling to deliver orders quickly, and you’re confident that you need a fulfilment partner to help. But if you haven’t found the right one yet, don’t panic and go with someone who doesn’t feel like the right fit.

Never rush into a 3PL relationship, especially when they don’t meet all of your requirements. Take the time to understand what you need, and find a partner who can help your business now and into the future. In particular, you should look for:

  • Resources: Space, packaging, and staff to meet your fulfillment demands.
  • Experience: Proven track record of delivering ecommerce orders efficiently.
  • Technology: Up-to-date systems to streamline processes and reduce costs.
  • Competitive Pricing: Leverage economies of scale to offer affordable rates.
  • Fast Delivery: Ability to deliver orders quickly.
  • Scalability: Capacity to grow with your business.
  • Ethical Practices: Commitment to ethical practices as verified by reputable organizations.

Outsourcing fulfilment to a 3PL can be a strategic move, but it’s vital to do it at the right time. By recognizing these signs, you can ensure that a 3PL becomes a true asset for your brand, customers, and bottom line.

If you’re not quite ready for outsourcing, don’t worry! Use this knowledge to prepare your business. This could involve increasing order volume, establishing clear requirements, optimizing your inventory, or finding the perfect 3PL partner.

Ready to Discuss?

If you’re confident that 3PL fulfilment is the right step for your business, we’re here to help! Contact us to discuss your needs and see how we can assist you.

 

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Gary Rees

Gary Rees

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