3PL is not the latest droid from the upcoming Star Wars movie. But it is a powerful force to be reckoned with!
Third-Party Logistics (or 3PL as the hip kids say) is basically a way for you to outsource major elements of your distribution, warehousing and fulfillment services.
Typically these 3PL services can be customized and scaled based on the specific customer’s needs. Services can often times extend beyond logistics to include value-added services to help you grow your merchandise business even further and well… Sell (more) merch!
Globally, the market for 3PL has grown to almost 200 billion dollars in the US alone, and demand for these types of services have grown year over year. As of 2019 more than 80 percent of Fortune 500 companies are using the power of 3PL in some form or another in their own strategies.
How to know if you’re ready to outsource fulfillment?
- You spend several hours a day packing and shipping your products.
- You’re shipping over 100 orders a month.
- Running out of space to store inventory.
- You need more time for strategic projects like marketing and development.
- You’re already selling on an eCommerce platform like Shopify or BigCommerce.
- You don’t want to invest in your own infrastructure (warehouse, fork lifts, labor, etc)
How to choose the right 3PL for you?
There are some common mistakes to avoid when choosing the right 3PL for your merchandise. Keep the following in mind:
- Don’t choose on price alone.
- Choose the best 3PL that fits your business model.
- Choose a 3PL that’s dealing with a similar business.
If for example you’re selling your own t-shirts and merch mainly you shouldn’t choose a 3PL that specializes in restaurant equipment or uniforms. Do your research to see what other companies use the 3PL and why.
The best 3PL companies focus on ways to help you develop and manufacture your goods. These services can range from things like:
- Manufacturing scheduling — Develop affordable production plans and schedule manufacturing runs based on demand
- Development — a 3PL can help you design and engineer an item and even secure patents
- Source Materials — 3PLs can help you identify the best materials and configure a sustainable, cost-effective sourcing plan
- Production facility location scouting—Great 3PLs work with wide selection of production facilities that can match the right factory to what you’re producing.
- Finished goods — The best 3PLs will help you source who is making what and where, to help customize ready-made goods that meet your needs.
Three Top 3PLs to consider
ShipMonk
With the Florida based ShipMonk, you can easily manage your supply chain and take a proactive approach to inventory management. Many pre-built integrations help you automatically import orders from all of your channels. www.shipmonk.com
ShipBob
ShipBob is a great 3PL company from Chicago. With a network of fulfillment centers across the US, ShipBob lets retailers split inventory across locations for faster and more affordable delivery. Their unique software seamlessly integrates with the leading eCommerce platforms to automatically fulfill orders as they are placed online. They offer simple, fast, and affordable fulfillment for eCommerce businesses and even crowdfunding campaigns. www.shipbob.com
Red Stag
A great fit for niche clients, Red Stag Fulfillment provides you with a powerful mix of know-how, reliability, and accountability. This 3PL company provides stable, good-paying jobs for the Knoxville community.
They offer a lot of the same services of the other 3PL companies but will actually pay you if you’re not happy with their service. (No kidding! their guarantee pays you $50) If there’s any problem they fix it or it’s free AND pay you $50 cash. Red Stag Fulfillment.
Third-Party Logistics is not for everyone
While you might be tempted to run off and sign up with a 3PL because you heard a popular Kickstarter or Influencer was using one, you have to remember that it’s not the services or tools that made those successful.
3PLs are not for people who are just starting out with selling merch, but definitely a way for you to level up and scale when you do get big. Definitely a great goal to set for your business! We suggest starting with Print-On-Demand and growing from there.