Estimated reading time: 5 minutes
As your business grows, unsurprisingly the infrastructure supporting it will need to grow too – particularly when it comes to warehousing and order fulfilment. This may mean hiring or growing your own logistics team, or alternatively could mean moving to a new warehouse to accommodate increasing stock levels.
As you can imagine, handling these processes yourself, especially while keeping up with the day-to-day operations of your business, can be time-consuming and expensive, not to mention a very steep learning curve – which is where third-party logistics providers (3PL) like Warehow come in.
Rather than juggling everything yourself, a 3PL partner can take care of warehousing, packaging, and order fulfilment. In other words, they can do the heavy lifting for you in terms of logistics. Our team and resource effectively becomes yours to deploy.
This leaves you with more time to prioritise the other aspects of your business that really matter to you and your sales growth – sounds great, right? One question does spring to mind, however: how do you know when your business is ready for a 3PL partner?
Although there is no set formula to determine this, there are some common indicators to look out for. To help you understand if your business is ready for a 3PL partner, here are 5 common signs!
The first reason is fairly obvious and perhaps the most common. As your business grows, you will have more and more orders coming in. As this continues, your existing team, especially if you are a small company, may find it difficult to keep up with fulfilment.
You could consider taking on additional staff, but recruitment in itself is a very time-consuming process. Searching, interviewing, onboarding and training new employees, especially when your existing team is already overwhelmed, only adds to the stresses they face. It also comes with its own risks. Perhaps the growth is seasonal, and you’re hesitant to commit to increasing your headcount if you’re worried sales might dip.
Instead, 3PL partners like Warehow are experts when it comes to logistics hiring; they are already equipped with everything needed to handle your fulfilment. This includes ensuring you always have the right staff levels to meet demand; we’ll dial support up or down depending on your sales volume at any given time.
Having these processes in place will help prevent fulfilment problems arising from your team being overstretched, such as shipping incorrect or incomplete orders, or delivering items that arrive late. This brings us on to the second indicator that you are ready to outsource your logistics.
When your team is overwhelmed with orders, it becomes easier to make errors or suffer from varying degrees of general disorganisation. Issues such as sending orders to the wrong address, sending wrong items, or delayed shipping can all lead to dissatisfied customers.
Any reduced level of customer experience will eventually damage your business’ reputation – something you definitely need to avoid if you want repeat business. On top of already struggling with large order volumes, your team now needs to deal with more customer service complaints and potentially process more cancellations and returns. It’s a perpetual cycle!
If you recognise any of these signs, then it may be time to consider working with a 3PL partner. Companies like Warehow can ensure that every customer has access to correct, fast and affordable shipping, which will reduce the number of complaints and returns.
There are a lot of costs associated with operating your own logistics. You have to pay your staff their wages (not forgetting training time, sick pay, holidays and national insurance) and rent or buy a warehouse. You then need to buy the equipment and all of the packaging materials. On top of that, shipping costs can often be more expensive for smaller businesses too.
Working with a 3PL partner like Warehow is a much cheaper solution. This eliminates the need for renting your own warehouse, buying materials and equipment and hiring your own staff. A 3PL partner can also leverage their courier relationships to give access to volume discounts, reducing the cost of shipping.
Aside from the potentially sizable general costs of running a warehouse, and employing a warehouse team, there are also substantial financial risks/costs that you may not have considered. Insurance (both for stock, loss of operation and public liability), health and safety requirements, training records and disaster recovery planning. Other examples are stock loss or possible damage through mishandling or inappropriate storage.
If any of this isn’t managed correctly, you could even have compensation claims to deal with. All of these things can cause significant financial problems – outsourcing your logistics to a 3PL provider like Warehow will mitigate these risks.
Contrary to all of the ‘negatives’ listed above, your business doing well is also a sign that you may be ready for a 3PL partner. If your company is growing, orders are flowing in and sales are increasing, why not take a proactive approach?
Don’t wait until you start experiencing the pain points listed above. Instead, take the opportunity to partner with a 3PL provider and guarantee that you can continue to provide that consistent level of service as your operations grow.
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In summary, you should now have a better understanding of whether or not your business is ready to consider partnering with a third-party logistics provider.
If your team is overwhelmed, you are receiving an increasing number of customer service complaints or you find your costs and financial risks becoming too high, it may be time.
Even if these issues are not an immediate problem, if your business is growing steadily, such issues could be on the horizon if you don’t take preventative action now.
Rather than waiting, why not capitalise on your growth potential by ensuring you are ready to meet your growing demand consistently?
At Warehow we can:
If you’d like to find out more about how we can support the expansion of your business, get in touch with us at https://www.warehow.com/ to book a free consultation.