If you’re running a successful company, then there are some universalities to keep in mind, regardless of your business model. You want to be able to allow your customers to access your products and services quickly. Any delays mean that they’ll get impatient and possibly go with one of your rivals.
If you want to dominate your niche, you must use all available resources. Often, it is by exploring those resources that you’ll learn about options like third-party logistics companies.
Let’s talk about what these companies are, what they do, and when you should use one.
What is Logistics?
Before we go into more detail about third-party logistics companies, you should know what this term means. Logistics:
- Refers to detailed coordination
- Might encompass people, processes, supplies, facilities, etc.
When you’re talking and thinking about logistics, that probably involves moving your products from place to place.
Logistics is shipping, but it’s also keeping track of where your shipments are at any given point. Logistics will probably involve cost since you’re trying to run your company or organization in a streamlined, predictable fashion.
What is a Third-Party Logistics Company?
People sometimes refer to the term “third-party logistics” as 3PL or TPL. It applies to:
- Logistics
- Supply chain management
When you start to get into this sort of thing, you will be dealing with goods more often than services.
Logistics is about moving your products around and keeping track of them.
Therefore, when you say “logistics,” you probably won’t be talking about digital services like eBooks or membership websites. Logistics is almost always about moving and monitoring physical products.
Third-party logistics is usually when you hire an outside company to help you with a supply chain aspect. You’re bringing in a third-party business entity to outsource distribution elements. You also might use one for warehousing or fulfillment services.
Examples of What a Third-Party Logistics Company Can Do for You
There are lots of different times that you might choose to employ a third-party logistics outfit. For instance, maybe you make printers. You have a warehouse where you manufacture them, and then you ship them to different brick-and-mortar stores around the country.
At the moment, you think it’s impractical to own a truck fleet. You contact a third-party logistics company and hire their trucks to move your printers.
That third-party logistics company also has its own secure warehouse facilities. You can leave your printers at one of these overnight. You will know that they’re safe and under guard as they pause on their journey before heading onward to their destination the next day.
Why Use a Third-Party Logistics Company?
As for when you’ll want to use a third-party logistics company, it’s all about two factors: convenience and cost. If it costs you less to manufacture, ship, store, and keep track of your products, you probably won’t need to use a third party.
However, if using a third-party entity can save you money and give you peace of mind, then that’s all the reason you’ll probably need to contact one. In business, the bottom line is everything. If you’re saving money every quarter by using third-party logistics companies to help with your supply chain, why wouldn’t you do it?
There’s the convenience factor to consider, too. Every business has some things that they do skillfully, but few do all things well. You might be great at making your products, but you may be a novice when it comes to shipping them.
Third-party logistics companies often have detailed knowledge regarding when it’s best to use FedEx for deliveries, or the US Postal Service, UPS, or other parcel carriers. They’ll know how to get your products to where they need to go as quickly as possible, and they’ll know security measures that can safeguard them on the way there.
When you select a third-party logistics company, you’re often saving money, but you’re also getting peace of mind. These companies usually know how to do both domestic and international shipping. If you’re ready to take your products overseas for the first time, this type of entity can offer invaluable expertise.
When you’re looking at these companies and trying to choose between them, make sure to get one that seems to have lots of experience and excellent feedback. You want one that’s going to make your operations smooth and hassle-free.
When you find the right company, you might start a business relationship with them that lasts for many years.