Importance Of 3PL Services for Startups

Posted by China 2 West on December 5th, 2020

It is a common misconception to think that third party logistics or 3PL is only viable to large and successful businesses. However, every company that is thriving in ensuring a successful warehousing solution should also consider the service. There are trusted China supplies and services providers that can tailor their 3PL for startups, so even a small business can cost-effectively and efficiently outsource to a reliable global forwarding provider.

How 3PL companies work

Third party logistics service providers are responsible for the supply chain operations and other related matters involved in making sure that products can get to customers on time. In its basic state, 3PL for startups will provide receiving, warehousing, packing, picking, and shipping.

However, some service providers can go further by offering value-added services, such as inventory management, postponement packaging, and others. This way, reputable 3PLs are typically reputed as logistics experts for their ability to streamline, simplify, hasten, and make logistics more cost-effective for every business.

How important is 3PL for a startup?

Third party logistics will enable any company, regardless of size, to establish, facilitate, and execute a reliable outsourced warehouse solution. Capgemini Consulting conducted a study about 3PL in 2016 and discovered that 93 percent of companies relying on a 3PL service have had successful relationships with their customers. So, with a good 3PL service, startups can establish a better reputation in their industry when it helps improve their customer service. The same study also found that 3PL could contribute to reducing gross logistics costs.

Because logistics are critical, even to startups

In many startups, the in-house staff is already focused on major operations like financing, sales, marketing, and product development to get their company off the ground. Not everyone will have an in-house team of logistics experts, as that could mean additional overhead costs, and typically, there is no extra budget for that. So, it makes sense for them to rely on 3PL for startups to fill that gap.

Benefits of 3PL for a startup

Startups that outsource their fulfillment requirements to a 3PL company will have more time to focus on their core operations while leaving the logistics-related guesswork to experts. Third party logistics specialists can help them save money, manage their inventory, deal with some aspects of customer service, and provide a dedicated account manager to oversee their needs. Reputable providers of 3PL for startups can scale their services to the exact needs of the business and provide real-time metrics and analytics, which can be useful when the business needs insights to help with their growth and in setting enhanced benchmarks.

How startups can choose a good 3PL service

Not ever company that offers 3PL for startups can provide the best service. Ideally, a business must look into these factors when identifying the right service provider:

• Experience – The 3PL company must have extensive experience in providing their services in and outside of China. They should also have a thorough understanding of the customs regulations, business culture, and laws in China.
• Confidentiality – The 3PL service must be able to keep the business’ IPR confidential.
• Flexibility – Ensure that the company offers flexible warehouse solutions in the US and China.
• Technology – Effective 3PL for startups must be backed by cutting-edge technologies that offer full visibility, supply chain analysis, electronic connectivity, process improvement, ROI measurement, and reporting tools.

About the Author:

This article is written by Nick Cunningham, who is the President of China2West. Established in 2005, China 2 West is your one stop solution provider for all your supply chain management, manufacturing, quality control, and product development requirements in China and South East Asia.