For growing businesses, your order fulfillment capabilities can make or break your success as an ecommerce company. As customers buy more online, they are counting on companies like yours to meet (or exceed!) their online ordering expectations from the initial purchase to the final delivery to their door. That’s why modern businesses must have both reliable and scalable fulfillment operations. Because of this, there comes a point when ecommerce companies have to ask themselves whether they should handle fulfillment logistics in-house or outsource to a 3PL warehouse.
Option #1 - 3PL Warehouse Logistics
Instead of overseeing and managing their own logistics, a growing number of ecommerce companies are choosing to partner with a 3PL warehouse or third-party logistics company as an alternative that makes sense for their needs. With a 3PL warehouse partner, their whole business is entirely based around providing the logistics of various companies like yours. By choosing a 3PL warehouse option, you can expect a variety of benefits:
Cost and Infrastructure Savings
You can gain significant cost savings when you take the 3PL warehouse route. Instead of hiring your own logistics and warehousing staff, you can rely on the 3PL warehouse’s manpower. Instead of buying land and constructing warehouses (or renting them out), you can utilize a 3PL’s large warehousing capacity. Your 3PL warehouse will also have access to transportation, equipment, materials, and other infrastructure so you won’t need to handle it all yourself.
Scalability and Flexibility
Consumer behavior and customer demand can fluctuate, especially in certain seasons. Instead of the static operations of in-house fulfillment, you can scale your fulfillment operations up or down with a 3PL. With the ability to access your 3PL warehouse’s vast carrier relationships, fulfillment capacity, and nationwide warehouse network, you have the advantageous flexibility to keep up with increased demands when your competitors don’t.
Expertise
Your 3PL warehouse’s specialization in logistics and fulfillment means you’ll gain a greater level of expertise than you would if you were doing it all yourself. This puts your company in the driver’s seat to be able to provide streamlined, reliable logistics, giving you better peace of mind and the added benefit of being able to focus your attention on where it’s needed most—your company’s own core competencies.
Option #2 - In-House Logistics
Alternatively, you may consider keeping all your logistics in-house instead of going the 3PL warehouse route. That means you’ll be responsible for developing and managing your own warehouse space, carrier relationships, logistics staff, and fulfillment strategy. By handling logistics yourself, you can gain some important advantages, including:
Greater Control
With in-house logistics, you’re in charge. This allows you to define and set up your own fulfillment strategy and processes based on your company’s unique needs. For some companies, this can be a particular plus, especially when they have proprietary fulfillment expertise. This may also appeal to company leadership knowing everything in their supply chain is under their watchful eye.
Customization
If your own company does logistics and warehousing, you can truly make it your own throughout the fulfillment process. If you’re trying to build your brand identity around your fulfillment capabilities, customizing each step with your company (and your target audience) in mind can ideally help your business stand out more from the crowd.
3PL Warehouse vs. In-House Logistics - Choosing What’s Best for You
For some companies, the choice may be clear after reading the benefits of each option above. However, when considering whether to partner with a 3PL warehouse or keep your logistics in house, there are a few key factors that can help you determine the best route to take:
- Long-Term Growth Strategy: When you consider your long-term business objectives, which option would put you in a better position to achieve them? If you anticipate growing rapidly, the 3PL warehouse option may make the most sense so you can scale quickly.
- Customer Expectations and Locations: Are your customers primarily in your region, or are they spread throughout the US? If they are indeed nationwide, utilizing a 3PL warehouse can help you meet customer expectations by offering the fast shipping options that more and more ecommerce buyers are counting on.
- Overall Costs: By comparing the overall cost of 3PL warehouse fees vs. the up-front costs of building a logistics infrastructure yourself, you can determine which route will keep your company profitable both in the immediate future and in the long run.
If you’ve determined that the 3PL warehouse option works best for your ecommerce company, then consider partnering with us at Smart Warehousing. With nationwide logistics expertise, we can help you achieve the optimized fulfillment your company deserves. Contact us today to learn more.