When a potential new client approaches 3P Logistics, their main concerns usually centre upon how we can help them and what costs are associated. Any decision to outsource is a pivotal consideration and we would always recommend that any business takes the necessary time to evaluate the expected impact to the long term business plan – this is more often referred to as “the valued proposition”. Outsourcing to a logistics partner is adding an extension to your business and should be seen a long term partnership as opposed to a one off purchase.
1. Product Types
Fulfilment companies can accommodate most product types, but there are normally a few exceptions to the rule. Pharmaceuticals, hazardous goods, or high value items are some typical exceptions that would normally assume specialist storage and handling requirements. Certain products may require a degree of manual intervention upon receipt. For example, 3P Logistics provides personalisation of football shirts, and goalkeeping gloves whilst we also offer an engraving service for key rings etc.
This involves understanding and identifying the “sweet spot'
Only when you have established a proven and consistent demand for your products should outsourcing be considered. A lack of space, time and expertise are early indications that outsourcing may soon be a requirement. The “sweet spot” may be accelerated in the event that a lease expiry is due or service is suffering. A typical threshold on when outsourcing becomes viable is around 100 orders per week as a minimum. Larger scale fulfilment companies may determine a far higher entry level normally associated with high volume blue chip e-tailers
3. Opportunity Cost.
Such a professional term, yet it is essential to evaluate your opportunity cost. When outsourcing you are paying for units of time that I turn will free you up to focus on growing your business. The greater levels of efficiency, and flexibility is likely to deliver both service enhancements and lower operating costs. To outsource successfully you must be able relinquish a degree of direct control and learn to trust. Most etail businesses can be overseen remotely by embracing web based technology and accessing real time information relating to your orders, stock levels etc. 3P logistics have a dedicated customer service team and contact center whilst aiding business growth through multi-channel selling. Our official partnership with Linnworks multi-channel software provides our clients with a live, synchronised system allowing users to monitor their stocks anywhere, anytime and without the risk of overselling.
4. Return on Investment
For every business action you should measure the ROI and evaluate your cost per order before outsourcing. How much do you currently pay for your labour, warehouse, equipment, shipping, etc. and remember to factor in the cost of your own time. You will often find a better deal with an outsourced order fulfilment company as they offer pay as you use warehousing services and can often share the benefit of bulk buying from the major parcel / postal carriers.
Order fulfilment workflow