There are many factors that contribute to your overall costs of fulfillment. Working with a 3PL (third-party logistics company) can keep these costs down because at each stage of the process, the flexibility and pricing that a 3PL offers provide advantages over internal fulfillment.
Warehousing
Utilizing your costly office space for storage isn’t an economical choice. Many 3PLs offer variable fees based on how much storage you require, allowing you to adjust your costs based on demand. Growth is unpredictable, so having the flexibility to increase storage space could save money and help to avert possible shipping delays. A good 3PL will have a reliable inventory process that keeps your goods organized and accessible.
Staffing
With in-house fulfillment, more than 50% of the total cost of fulfillment is labor. A company with heavy product fulfillment needs will see its staff costs soar. Hiring a 3PL to handle your pick and pack lets you rely on their staff so that you pay a predictable cost and can manage your cash flow. Finding and retaining the right 3PL with a well-trained, professional staff is the key to controlling your labor costs.
Bulk Packaging Savings
Do you use standard cartons? Your 3PL will purchase them in bulk and share those savings with you. In fact, they purchase many supplies in bulk: air pillows, packing tape, shipping labels, pallets, etc., keeping the cost of your supplies down.
Pick and Pack
In the early days of your business, you may have handled the pick and pack yourself, but as your business grows, you will want to outsource that to a good 3PL company that employs different strategies. The right pick and pack approach will be more efficient, saving you money and increasing customer satisfaction.
Freight
A 3PL allows you to lower shipping costs by using volume carrier discounts. An experienced 3PL will ensure the design and size of the shipment are the most cost-effective and don’t incur DIM freight charges. They can offer parcel presort discounts and many other money-saving options.
A Good 3PL Keeps Repeat Customers Happy
Good order fulfillment encourages your customers to remain loyal. On average, repeat customers bring more value than new customers. You don’t have to spend as much to convert them, and people familiar with your products are likely to make larger e-commerce purchases.
3PL Can Scale to Your Business
Growth is something that is very difficult to predict. You may not be prepared for a jump in sales, but you will want to take full advantage of it. Partnering with the right 3PL will ensure you are ready to seize any opportunity to grow your business.
FFI is a trusted, experienced 3PL that can help streamline your fulfillment, lower your costs and increase customer satisfaction. We are ready to help you grow.
If you are ready to save money and streamline your fulfillment process, our dedicated team is looking forward to working with you! Give us a call at 973.361.1700 or fill out our contact form.