How Do You Know If You Need To Hire A 3PL?

As business owners around the nation discover every year, although success can mean financial stability or wealth, it can often come with unforeseen complications.

"The more any business grows, the more support it will need in terms of time, resources, and human labor, and if an owner is caught off guard by these realities, a blossoming enterprise can become a failed one."

This is why, once many business owners begin to find success, they often decide to partner with a high-quality, professional logistics company in order to meet the increasing demands of successfully growing their business. In this article, we’ll look at some of the most common growing pains that indicate it’s time to partner with a 3PL and increase the scale of your enterprise.

1. Difficulty Meeting Demand of Rising Customer Base

Although having a “too large” customer base is a good problem to have, many people (especially in our modern world) start their businesses in their backyards and basements, happy to be moving products at all as they ship out tens of orders per week. These entrepreneurs will suddenly find themselves in a tight spot as their store takes off and the demand for their product rises from tens to hundreds or even thousands per week, and the owners find themselves unable to ship all that product.

Fortunately, with their fully established system of warehouses, trucks, and manufacturing facilities, finding a good 3PL can go a long way towards solving this problem.

2. Orders Being Fulfilled Slowly or Inaccurately

It’s common for businesses to have periods of relative inactivity followed by short periods of time where they receive the majority of their business. Sometimes the bottleneck of sudden demand leaves you unable to fulfill all the orders you receive.

Even under more stable circumstances, shipping that is not close to 100% reliable can be a liability in modern online shopping. Almost everyone is now fully accustomed to the reliable two-day or overnight delivery options that huge corporations can afford to offer. Slow shipping can discourage a customer from becoming a repeat customer.

3. Overworked Employees

At first, as demand increases, a small Mom & Pop shop can keep up by working longer hours or streamlining their technique. But after a certain point, trying to keep up with demand using only your original staff will simply become impossible.

Ultimately, an overworked staff is worse for everyone in the long run. Employee burnout and turnover will be a serious problem, and tired employees are more likely to make mistakes.

4. Rising Shipping Costs Chipping into Profits

Unlike most third-party contractors, a 3PL’s job is to save you money by using their services. Joining up with a 3PL may cost money out of your pocket but will almost certainly significantly reduce what you pay in shipping.

A good 3PL will have two key advantages: first, it has the power to bargain carrier rates directly with major shippers like UPS, FedEx, DHL, and USPS. Secondly, 3PLs have fleets of train and truck shipping that can be organized for maximum efficiency, incurring only bare-bones labor and transportation costs.

You need to do brisk and steady business to profit off these virtues - a company must be shipping 100 or more orders per month to see the full benefits of these lowered shipping costs.

5. Storage Issues

No matter what, significantly scaling any business will involve handling larger and larger order sizes, potentially to the point where you don’t physically have the space to store all the materials, tools, and finished product you have sold.

There are certainly other options available - you can hire out a commercial storage space, expand your original workshop, or take many other routes, but they all ultimately incur new costs and add complexity to the day-to-day of your business.

"The Virtue of a 3PL is that they already have storage in place, arranged in a way guaranteed to maximize efficiency and minimize costs."

Let PCC Logistics Help Take Your Business to the Next Level

The choice to leave certain aspects of your business (shipping, storage, careful handling, etc.) in the hands of someone else can sometimes be a tough choice to make. Others may simply feel relief at the paperwork and logistical problems they no longer have to deal with.

In any case, once any business reaches a certain size, it can no longer grow successfully without quickly and competently expanding its capacity for production, shipping, and so on beyond the abilities of its original staff. While doing so alone is foolhardy, luckily there’s PCC Logistics.

With ports across the west coast and over 30 years of experience and excellence in logistics, PCC Logistics oversees shipping worldwide. Contact us today and learn how we can help you bring your business to the next level of scale and profitability!