The e-commerce sector has experienced rapid growth that has spearheaded increasing demand for 3PL fulfillment solutions for businesses. Working with a 3PL company is a logical choice for a business that processes high order volumes. The option to partner with a 3PL firm can be, however, a challenge for smaller firms that have the lion’s share in the e-commerce market.
In practice, the transition needed for partnering with a 3PL logistics firm can be much easier for your organization than you might have thought. In this article, we’ll highlight the common misconceptions about hiring a 3PL solutions provider that hinder most businesses.
1. 3PL fulfillment is expensive and only add to overheads
Companies usually consider outsourcing to 3PLs as a major, and often unnecessary, expense. 3PL outsourcing, however, can bring efficiencies into your company’s supply chain processes by saving delivery times and fixed costs that involve purchasing costly assets.
One major example of a fixed cost for shipping operations is a warehouse. Managing a warehouse is expensive and outsourcing your order fulfillment operations will save you from the hassle. Therefore, 3PL fulfillment is a good long-term investment for your business. 3PLs will also be handling transport for you and will save you the headache of organizing your own fleet, along with any associated costs such as fuel and human resources.
2. Order fulfillment is easy and therefore 3PL is not a priority for the businesses
Many business owners believe that a good product is a key to their success. It is equally important to distribute your product efficiently and reliably. With larger delivery networks, companies can run into order fulfillment issues, which can stack up over time if they do not plan carefully.
Order fulfillment can also be complex if many vendors operate in a single route. Underestimating this complexity often results in order fulfillment delays, unsatisfied customers, and eventual loss of sales. We recommend working with a 3PL partner who can help minimize your supply chain risks with their expertise and network resources.
3. Outsourcing fulfillment to 3PLs is only for big companies
Economies of scale matter for big businesses, but 3PL service providers can adjust to small-scale operations as well. You should opt for a logistics provider who understands your requirements, whether simple or complex, and one that adapts accordingly.
4. 3PL management is complex and unnecessary for small companies
3PL management may look overwhelming to managers working in small e-commerce setups. However, once they learn the details of the order fulfillment processes, it becomes second nature to work with a 3PL company. Most importantly, your business will be prepared when you need to scale up distribution activities, allowing you to realize savings in time and money.
5. 3PLs don't know much about the customers or the industry
This is a big misconception, particularly among small or niche businesses. The myth is based on their mismatched perceptions of service standards and the working relationship with their customers.
Contemporary 3PL companies use the latest technologies and data science to study consumer behavior patterns and emerging industry trends, which makes them well-equipped to deliver high-quality and reliable order fulfillment services. In fact, they understand the value of customer relationships, and help you deliver the best services to your clientele in turn.
Customer satisfaction and market reputation are also important to their business. 3PLs also have valuable data on customers and vendors involved in the supply chain., which puts them in a good position to give actionable insights for your business. You can trust these professional logistics operators in the same way as other industry stakeholders.
6. 3PL only manages high volume of orders; Our business is too small for this
As we covered earlier, 3PL businesses can scale and adapt both ways, meaning they can work for any company, big or small.
For many companies, high volumes of orders are due to seasonal spikes, which are predictable, but also due to an unexpected response to a promotional offer. Hiring a 3PL solution is usually a flexible option that also prepares your business to handle deliveries in unpredictable situations. A company that can manage a surge in demand also gets to keep its market credibility.
7. Hiring a 3PL means losing control of business
Business owners tend to worry that they will be unable to control their inventory and distribution operations if they are not physically managing them.
In reality, modern 3PLs offer electronic order tracking and fulfillment processing services that allow their partners to easily monitor their deliveries. These services also allow you to make productive decisions in short time frames. The net result is simpler operations and a good grip on your order fulfillment process.
8. 3PLs only provide packing and shipping services
Order fulfillment service providers are more than just packers and shippers. They offer extensive value-added services such as custom delivery options, direct deliveries, record retention, advertising options, sorting and inspection, and the list goes on. Forgoing a 3PL solution could mean that you are missing out on all these perks.
It’s also worth noting that value-added services also benefit your customers by allowing you more customization when fulfilling an order.
9. Outsourcing distribution operations will slow company growth
Being in a binding contract with a 3PL with an initial investment leads managers to think this will cut profits and slow down company growth. This is a prime reason why some managers are reluctant to work with a 3PL company.
This is clearly not the case. You are working with experts who can easily adapt to changes while also ensuring that you will save time and money in the long run. It may look scary in the beginning, but the benefits of increased market exposure and enhanced efficiencies in order processing, transport, and distribution far outweigh the benefits of working with an in-house team.
10. 3PLs move inventory slowly and increase shipping costs
There’s always the chance of slow deliveries in any order fulfillment operation. But modern 3PLs have helped businesses like yours to improve delivery times significantly, thanks to their extensive supply chain networks with optimized routes and faster transportation.
3PL’s large shipping networks and expansive customer bases also mean you will be able to get the best deals on specific routes and products. You may also be able to benefit from exclusive containers options that can potentially cut down your shipping costs.
Final Thoughts
Ultimately, your decision to outsource your order fulfillment needs to a third-party logistics provider requires careful planning and consideration. Your working relationship with existing and prospective partners is also a decisive factor when considering outsourcing. By dispelling the common myths about 3PL services, we hope making this decision for your businesses is more straightforward now.
If you are in the market looking for a reliable and affordable 3PL partner for your order fulfillment needs, we offer custom solutions and proactive support designed for multi-channel distribution and rapid business scaling.
At Logos Logistics, we work with many small and large companies to deliver a top-notch shipping experience and drive business growth. Learn more about how we can offer you end-to-end, cost-effective 3PL solutions here, or give us a call today for a free consultation.
