What is third-party logistics or 3PL?
Third-party logistics or 3PL is the outsourcing of your supply chain and logistics operations to another company. A 3PL system takes care of all those tasks involved in getting something (your product) from one place (you) to another (your customer’s doorstep/mailbox/hands).
Think of it as including all those things that happen behind the scenes of a product-centric business regarding systems that tell you when stock is low, picking, packing, fulfilment, shipping and if necessary, reverse shipping and entering returns back to stock.
At its heart, it’s about making your business more efficient, which in turn, allows you to focus more on the things that matter. Things such as product development, sales, marketing – in other words having time to work on your business, as opposed to working in it.
Third-party logistics or 3PL is about building on what you already do well and making that better to grow your revenue, your customer numbers or your reach and outsourcing the other things that might slow that process down to someone else.
Over the past 20 years, 3PL has revolutionised the way customers experience brands, and businesses are seeing the benefits. Research highlights more than two thirds of shippers using a 3PL service reporting reduced logistics costs overall. And, as a result, most planned to increase their 3PL usage.
From a cost-cutting perspective, implementing a 3PL strategy streamlines your supply chain, eliminating double handling and complications caused by a split focus.
More importantly, a third-party logistics solution allows for the creation of a complete, end-to-end, brand experience, building relationships with your customers through design, dependability and professionalism.
What can third-party logistics or 3PL do for you?
Practically, your third-party logistics coordinator manages your supply chain so your focus can be on your product and brand. Upon receiving your order, trained staff organise your product for shipment and deliver the final, prepared product to your customers in a timely manner. At Coghlan, for example, if we’ve received your orders by 2pm, they’re shipped same day.
For your business, a 3PL solution means greater reliability, more flexibility. For your customer that means a better brand experience and a greater likelihood that they’ll return to purchase something else.
And that in turn, lowers your costs of customer retention and saves you on customer acquisition too.
That’s the practical stuff. But valuable 3PL services do more than the practical. They research, they plan, they act, as the name implies, logistically. Your 3PL should provide:
- reporting software
- data analysis tools
- electronic data integration (EDI)
- a multitude of shopping cart and e-commerce integrations and
- the ability to scale your business up or down as necessary.
These tools are essential to get your product to your customer in the most effective and efficient manner for both you and your customers.
Shipping is an industry in itself with innovations and technologies constantly improving practise. Staying abreast of technological and customer service research and the changes that result is a massive undertaking – especially when your time is better served building your business.
When you use a third-party logistics (3PL) solution, keeping up with all of that becomes the responsibility of your provider, not you. Being well informed gives your 3PL service provider the know-how to tailor your brand to your customers, elevating their retail delivery experience.
And isn’t that what you want at the end of the day? Happy customers who think you rock?
And that’s where we can help. If you have upwards of 50 orders or more a month that you need to get to your customers more easily than is happening now, we’d be delighted to talk to you. You can always give us a call on +61 2 9828 0111 (Sydney), +61 3 9240 6300 (Melbourne) or +64 9 263 8855 (Auckland) or drop us a note via the form below. Alternatively, you can find a full list of available services here.