Benefits for 3PL Outsourcing Logistics

Benefits for 3PL Outsourcing Logistics

A Few Good Reasons for 3PL Outsourcing Logistics – and One Against It

When you set up your online store, you have a lot of decisions to weigh. From the design of the website and the product management system to marketplaces and marketing campaigns, there is a seemingly endless number of choices to make and implement. Many of them have little to do with the core of your business and, let’s face it, are not much fun. At this point, you naturally start thinking about outsourcing logistics. The fact that logistics can also be outsourced is something that many e-commerce retailers only consider at a late stage, if at all.

On the one hand, 3PL outsourcing logistics rarely comes to mind because many believe that the online store is still too small or that e-commerce fulfillment is too expensive. On the other, some may find it difficult to hand over shipping. After years of product development work, it feels odd to outsource the last step before the customer holds the product in their hands. If any of these reasons sound familiar, you should read on.

Excellent outsourced logistics for Excellent Products

In fairness, we can relate to the last reason. You’ve invested a lot of time and effort into making your product perfect. Now you want to present it to your customers exactly as you’ve long envisioned. Few factors have more influence on business success than logistics. In the beginning, this will certainly work smoothly. As sales increase, however, logistics will take up more and more of your time. Besides that, it also ties up other valuable resources such as money and personnel. Most importantly, it distracts you from your core business – and that’s a real shame!

Imagine this scenario instead: You, as an expert for your product, work together with experts for logistics. You have plenty of time to focus on your projects and growth because the fulfillment experts make sure your product gets to your customers exactly the way you intended. Some logistics providers, like us, offer their customers the option to package their goods in their own branded boxes to exact specifications and to ship them with their own marketing materials.

External service providers have optimized and modernized their internal processes over the years. They can react quickly and flexibly to market fluctuations and already have solutions to most common problems before they emerge. This allows them to handle logistics tasks at a quality level that you would be hard pressed to achieve in addition to the many other daily tasks within your own company.

Time is money – 3PL outsourcing logistics saves both

Of course, it takes a bit of time and effort to find the right logistics service provider for you. But this investment is worth it! Just quickly calculate how much time you invest in shipping an order: find the data entry, prepare the packaging material, pick the goods, log on to the shipping service provider, enter the address, print out the shipping label and delivery bill, pack, affix the label, update the data entry, and off you go to the post office. Now you add this value to your hourly rate. Not as little as you thought, is it?

When you consider that, depending on the product and packaging, e-commerce fulfillment is possible for as little as 5-6 euros per package, postage and packaging included, you can see that outsourcing can make financial sense. And that was just a simple shipping example! In fact, in addition to shipping logistics, there are also activities such as incoming goods inspection and logging, quality inspection of goods, and returns management. The larger your online store becomes, the more resources logistics eats up.

When opening an online shop, you can still fit your storage comfortably in the hallway to the bedroom. However, at some point, and ideally quite quickly, you will hit capacity limits. At the latest then it’s time to rent storage space.

Warehouse or no Warehouse

3PL service provider

Scalability is another key element in deciding whether or not to outsource logistics. The need to scale depends heavily on your business model. If you have to meet a relatively steady or slowly growing demand, you can plan warehouse capacities quite well. If your product is highly seasonal, you must be able to accommodate wide fluctuations in incoming orders. The same is true if sales numbers are the direct result of marketing campaigns or seasonal peaks.

A good logistics service provider can easily handle such peaks and store larger product quantities for you. Since companies receive substantial discounts for large orders, you can gain a significant price advantage. In addition, your service partner’s flexibility lets you grow without having to continually adjust your logistics processes.

Conversely, with each further expansion of your warehouse, you not only incur rental and maintenance costs; the infrastructure grows as well. This includes packaging facilities, personnel, shipping, technical hardware and software, and possibly delivery vehicles. All of this costs money and ties up capital. By using a fulfillment provider like MOODJA, you save these costs. You use the service provider’s existing infrastructure and only pay for what you actually use.

A Good Customer is a Satisfied Customer

Your customers satisfaction is a very strong argument for outsourcing your logistics. Of course, the quality of the actual product is the be-all and end-all. Let’s assume you have that covered.

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Shipping certainly has to be on point, too. Especially in e-commerce, where the emotional impressions during shopping are not as strong as in stationary retail and the customer’s first real contact with the product takes place when the package arrives, you have to get the first impression right.
Clean, secure packaging and uncomplicated returns processing are a matter of course.

However, a logistics service provider can also guarantee fast delivery. Customers hate waiting. In the competitive pressure of online shopping, one or two days are often crucial. Especially during the Christmas season or holiday periods, you can rest easy and rely on your fulfillment service provider. This way you can keep your customers happy and coming back for more.

Conclusion – Outsourcing Logistics or Keep It In-house?

Outsourcing your logistics has many advantages. In summary, these are above all:

  • Significant time and cost savings
  • Greater efficiency in warehouse logistics, shipping, and returns
  • High customer satisfaction
  • A box-free home

3PL outsourcing logistics at MOODJA is a worthwhile step for any company that wants to grow. What you’ll have to get used to after outsourcing, however, is not seeing your delivery person nearly as often as before. If this prospect irks you, it might be time to ask your mailman or mailwoman out for coffee instead.

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