A 3PL warehouse, or third-party logistics warehouse, is a logistical facility that provides storage space to businesses that allows them to grow exponentially by focusing on their core activities.
A Short Answer to “What is 3PL Warehouse?”
So, what is 3PL warehouse? As the name suggests, a third-party logistics warehouse provides businesses an opportunity to outsource their storage / warehousing needs. This way, businesses can save most of their warehousing and shipping costs.
A third-party logistics service or 3pls offer a great way to make your operations cost effective by letting you outsource your logistics operations that are acting as bottlenecks. Hiring a 3pl company can be a great cost saving strategy for your business.
Many large businesses or Multinational Corporations (MNCs) usually manage their own logistics operations, but it becomes quite hard for startups and even Small and Medium Enterprises (SMEs) to manage their logistics.
A business in the growth stage can NOT manage every single operation in-house. This is where the need for having a 3PL company arises. A 3PL company helps you streamline your overhead supply chain processes including the flow of inventory, warehousing facility, and many other related processes.
When your logistics operations become smooth, your order fulfillment ratio will definitely get better, which further increases your brand loyalty, and that’s what a small business always dreams of.
A 3PL warehouse can be a game-changer for your business because it offers a long-list of benefits, few of them are mentioned below.
Greater Flexibility. In an eCommerce business, one can easily source products from multiple suppliers. Since all of your items are stored in one 3PL warehouse, shipping costs get saved because different products can be shipped in the same box.
- Easy Return Process. The 3PL companies often offer reverse logistics services along with responsive customer support. So, you’re not only minimizing your warehousing cost, but also saving a lot by letting your logistics company handle your customers’ return complaints.
- More Control. When it comes to having control over your processes, 3PL offers you a great assist in order fulfillment process and a great customer experience that customers expect. However, the debate on 3PL vs 4PL is quite interesting to get into. The only difference between these two is that 4PL offers logistics services on behalf of customers.
- Buy in Bulk. Having a specific storage space in mind, you can order products in bulk that always cost less. You must take advantage of buying in bulk because now, it’s not your headache to think how to store, it’s your 3PL company that will do the job for you.
- Focus on Core Competencies. This is one of the biggest benefits of having a third party logistics company. You get ample time and resources to invest in your core competencies rather than line activities (non-critical functions).
For startups and SMEs, having a 3PL warehouse can be a great way to make a quick transition from a growth phase to a maturity phase with higher market share.