4 Benefits of Using Third-Party Logistics (3PL) in Your Supply Chain

When it comes to your supply chain and logistics, you can't always do it yourself.
In fact, 90% of Fortune 500 companies use a 3PL to handle shipping, warehousing and transportation management. Figures like that tend to make you wonder… Should I be using a 3PL? Luckily, given that we at Merchgirls offer a few 3PL services ourselves – we’ve got plenty to say on the topic.

What is 3PL?

A third-party logistics (3PL) business model involves using a third party to manage logistics functions on behalf of your business. The third party provides any number of services, like transportation, warehousing services, freight forwarding, customs brokerage, supply chain management, material handling and inventory control. 

Why should I use 3PL?

1. Better customer experience 

When the demands of your business grow, you may have trouble keeping up. An overextended supply chain can leave you with missed shipments, late deliveries and unhappy customers. By outsourcing your supply chain needs to a third-party logistics provider, you don’t have to worry about any of this. You can order your product in bulk (instead of placing multiple orders over the year), store your product at the 3PL provider’s warehouse and when a product is ordered by a customer, the 3PL provider just ships it out. All this means shorter delivery times, no in-house management or storage and therefore less stress for you and your customers. 

2. Access to expertise in logistics

3PL providers are the literal experts when it comes to handling logistics. They've got the know-how and the resources to handle your supply chain, including warehousing, transport and inventory management. Their network of trusted partners helps them offer you specific services you may need, and if you operate internationally, they can help you navigate complicated customs regulations and sort out efficient shipping processes. If you want your business to run smoothly overseas, a 3PL is a good resource to have.

3. Cost savings 

With their direct relationship with carriers, 3PLs are able to negotiate lower rates based on the volume of their shipments. This works especially well for small businesses, where most business owners don't have the time or knowledge required to negotiate effectively on their own. 3PLs also offer warehousing at lower rates because of their larger facilities and greater storage capacity, which is plenty more than a small business or individual would need on their own. Cheaper warehouse space and better carrier rates all mean one thing – lower overall costs for your business.

4. Scalability

3PL providers can also offer businesses the flexibility and scalability to use resources based on current needs, responding to highs and lows in demand quickly. This is especially useful for smaller companies who don’t have the resources in-house to hire employees full-time or even part-time. This can also be beneficial for larger companies who don’t want to outsource all their transportation needs but need help with certain aspects of it.

If you’re a small business, it makes sense to outsource as many functions as possible so that you can focus on other aspects. But when growth happens unexpectedly (and it always does), 3PLs are able to adjust resources quickly in response to changes in demand.

3PL services at Merchgirls

Offering 3PL services is a fairly new thing for us. When one of our clients needed not just merch, but a place to store it and a way for their employees to purchase it adhoc, co-founder Pippa made it happen. She worked with a developer to manage a Neto Portal, which essentially creates a storefront for each client. We’re now able to facilitate:

• Pre-order merchandise in bulk and have it stored at the Merchgirls’ 3PL Warehouse

• Building an online store and managing the day-to-day administration and maintenance

• Picking, Packing and Shipping the merch directly to the recipient who orders it

However, there is no one-size-fits-all option for our 3PL services. We currently have three different clients with three very different solutions.

PEXA – Storage & Dispatch

For our client, PEXA, we stock their merch at our 3PL warehouse and pick and dispatch as they need. PEXA does not have a storefront, we simply keep a running inventory and orders come through to us through our PEXA contact. We send out around three or four small bulk dispatches each month.

Starlight – Storage & Campaign Dispatch

For our client, Starlight, we store their stock at our 3PL warehouse; usually for short amounts of time leading up to their campaigns. We receive pick lists from Starlight that we use to pick and dispatch their merch, which can be up to roughly three dispatches a year of 5000+ items. Each dispatch is sent to Starlight’s fundraiser recipients across Australia, each with individual addresses. We use extra special purple satchels to ship Starlight’s merch, keeping it in line with their brand colours.

Telstra Purple – Online Storefront, Storage & Dispatch

For Telstra Purple, we use a Neto storefront and warehousing/dispatch system. There are a variety of different variations of the storefront for different departments within Telstra Purple. Staff members at Telstra Purple get a login to their department’s storefront to make a purchase with an allotted amount of credit. Some have the option to add money on top of this credit for extra purchases. We get the orders through the portal, which are picked up and dispatched by the warehouse. The Neto portal also allows us to supply the client with a range of reports on their stock and sales.

"The Merchgirls team provide great experience and solutions to help enable Telstra Purple branded merchandise, it looks and feels great and has proven to be in demand across the Telstra Corporation and is also well received at promotional events. Thank you Merchgirls team." – Chris Wolff, Telstra Purple

We really do alter the solution to fit the client, with the bulk of our 3PL services being based around storage and dispatch. 

Obviously, we’re a little biassed when it comes to talking about how great 3PLs are, and it’s always important to do your research before committing to one – only opt-in if it makes perfect sense for your supply chain management. 

That being said, 3PLs offer a load of significant advantages. Money and time saved, expertise at your fingertips and the flexibility to roll with the punches when it comes to demand and growth – just to name a few. If you’ve been questioning whether partnering with a 3PL provider is worth it in the long run, we’re here to tell you: YES, IT IS.

After some more info on Merchgirls’ 3PL services? Yeah, you are! Shoot us a message with your logistics requirements and what you’re looking for – we’ll get you sorted.