3rd Party Warehouse
3rd party warehouse services have been around for decades and are fairly commonplace in the retail industry. Third-party warehouse service providers are the perfect solution for new businesses that need help with distribution and warehousing.
They can be used by any company without picking up new skills or spending time training employees to handle the third party logistics. A 3rd party warehouse is a great solution for retailers to free up space, reduce costs, and get products closer to their customers. At Invenco, we have a 5,500m warehouse that is a purpose-built eCommerce facility for retailers.
What exactly are third-party warehouses?
3rd party warehouse service providers handle the warehousing of inventory for companies. This means they take care of all aspects from picking up products, storing them, and shipping them out to customers on behalf of their clients.
3pl warehouse services makes distribution much easier for new businesses by taking over these tasks without any additional knowledge or training required on the part of the retailer.
How does a 3rd party warehouse work?
Third-party warehouse service providers typically work with 3rd-party wholesalers to get products.
When a third party warehouse receives orders, it:
- Picks the product up from 3rd-parties and storage facilities.
- Stores them in their locations or client’s location.
- Process customer orders at their fulfillment centre for a given retailer.
- Packs and ships the order on behalf of the retailer.
This eliminates many hassles that come along with self-warehousing costs such as:
- Internal labour expenses.
- Staff turnover rates.
- Increased inventory investment required due to safety stock needs and carrying costs.
What makes a 3rd party warehouse service provider different from other distribution models?
The 3rd party warehouse service provider is a unique model because it provides many value-added services that other distribution models do not, such as:
1. Logistics & warehousing
Third party warehouse providers offer logistics and warehousing to their clients.
For example, they can store products at the 3rd party warehouses themselves or in their client’s location for an additional charge.
Either way, this eliminates the need for inventory investment on behalf of the retailer. This means you have one less thing to worry about when running your business.
Third party distribution wholesalers also deliver products from 3rd-parties and storage facilities, which saves time coordinating these deliveries with internal labour expenses.
2. Third party supplier selection
3rd party warehouse service providers offer 3rd-party supplier selection to their clients. This eliminates the need for 3rd party retailer suppliers and means more options with competitive pricing. This can be a major cost saving step when you have even just one 3pl distribution channel.
3. Third party warehousing
The logistics involved with manufacturing, storing, and shipping products for retail is an integral part of any company’s business model. This is where 3rd party warehousing and 3rd party distribution services come into play.
Third-party warehouses are responsible for managing, storing, handling, and shipping inventory from the supplier to the retailer. 3rd party providers provide 3rd party warehouse services so that retailers don’t have to invest in storage space themselves or pay high rates for warehouse rentals.
They also help manage inventory levels by making sure goods are delivered on time. In fact, late deliveries may result in penalties.
What benefits do third-party warehouses offer?
Third-party warehouses offer many benefits, such as:
- Increased efficiency
By outsourcing your storage needs, you will have more time to focus on other important things like marketing and sales growth.
- Reduced costs
With 3rd parties handling your logistics services, there’s no need for you to incur the high costs of storage space.
- Increased sales growth
3rd party warehousing service providers provide a full range of services ranging from distribution to transportation and shipping. As a result, you can focus on other things that will grow your business.
- Time efficiency
3rd party warehousing service providers specialise in moving your goods from the plant to the customer’s hand in the most efficient ways possible. You can rest assured that each package will arrive promptly.
These service providers are experts at what they do, handling every detail of your supply chain, so you can focus on other things like marketing and sales growth.
- Large selection
They offer a wide range of inventory that allows for more flexibility in choosing products to sell online. A 3rd party warehouse is also able to store items that would be too large or heavy, e.g., furniture, if needed.
How to pick the right 3rd party warehouse?
When it comes to 3rd party warehousing services, these providers are necessary to meet the demands of a growing eCommerce marketplace. Before selecting one, make sure your 3rd party warehouse provider offers:
1. Efficient order fulfilment
Your 3rd party warehouse provider should be able to ship out orders on time so that customers don’t get annoyed with delivery delays. This may mean an order is fulfilled from their warehouse or one of your distribution points, depending on the product’s availability at either location.
2. A wide range of inventory options
Warehouse providers are a good option for those in need of more flexibility when choosing products they want to sell online. Ensure your pick has a large selection that includes different items such as furniture, clothing, and accessories.
3. Flexible storage options
The ideal candidate needs to offer items that require large amounts of space for either short or long periods. This way, they can be more versatile than traditional warehouses and better suit your needs.
4. Fast turnaround times
Orders often need to be picked up quickly to get products onto store shelves as soon as possible. This means the warehouse provider must have an efficient pick/pack process, so you don’t lose any valuable time between purchase and sale.
5. Transportation options
The firm needs to be able to ship and deliver goods for you, so make sure they offer these services.
Tapping a trusted partner with a 3rd party warehouse can bring numerous benefits to your eCommerce business. As an experienced 3PL logistics provider, Invenco can assist you in automating your shipping process while still retaining control over cost. If you’re looking for help with 3rd party warehouse solutions, contact Invenco today.