Third Party Warehouse
What is a third party warehouse?
A third party warehouse and distribution company is a manufacturing or retail partner that provides warehousing solutions for products in the supply chain. There are several steps that providers go through to ensure everything runs smoothly.
The first step is to assess your needs and identify which would be a good fit for you and then determine whether there’s space available at their facility to meet those needs.
The next step is intake and receiving. They will need to carry out the logistics required to get your product from point A (the warehouse) to point B (the end destination of wholesale or retail).
Third party warehousing is a critical aspect of the supply chain for any business, especially those that operate online. They liberate both online and brick-and-mortar retailers from the many hassles of picking, packing, shipping products, and dealing with returns.
The third step is storage and warehousing. Once the products are received and processed, they will be placed on pallets or in a warehouse for storage.
Companies with their own warehouses provide more control over inventory management and may offer customised services such as order consolidation, which can significantly reduce shipping expenses.
When should you consider using 3PL services?
The first and most important step in finding the right 3PL partner for your company is identifying when to start looking for one. Regardless of whether you’re selling goods in-store or online, engaging the services of 3PL providers revolves around two critical milestones:
- When the volume of products increases beyond what can be handled by one or two warehouses. In this case, it may not be efficient to keep all inventories at the headquarters. Instead, moving the operation to regional distribution centres is optimal.
- When a product may be better suited to warehouse storage in another region for shipping convenience.
Tips to finding the right 3PL service provider
If you feel like it’s time to look for a third party logistics provider, you need to find one with the right fit for your business. A good 3rd party warehouse company should integrate with the ecommerce platforms where you sell goods.
The fulfilment provider you choose to work with should also have experience in shipping products similar to the ones you sell. Here are factors to guide you when looking for a 3PL services provider:
- The rates for storage and handling
- How the company is organised to best suit your needs
- The services it offers, such as freight, warehouse management, packaging or customer management
- Integration with their ecommerce 3PL platform if needed, without any programming knowledge on your end
What are the benefits of third party warehousing?
One of the most important aspects of using these services is their cost-cutting abilities, but it doesn’t stop there. Here are more benefits:
Provide better experience to your customers: 3PL warehouse providers can help you offer faster delivery to all your customers since they have established distribution networks and are efficient at picking and packing for warehouses.
Reduced inventory holding costs: Using a third party warehouse can help reduce inventory holding costs in these ways:
- Improve cash flow via vendor-managed inventory (VMI)
- Avoid substantial warehouse management system costs
- Avoid the cost of doing it wrong
- Skip warehousing costs with cross docking
Free up construction capital: Third-party warehousing frees up construction capital that could be used for other projects while eliminating rental expenses.
Increased productivity: Warehouses are large enough to fulfil the minimum order fill quantity needed by retailers or wholesalers, which can be difficult for small retailers to achieve.
Increase efficiency: A third party warehouse can increase the efficiency of your business by freeing up both online and brick-and-mortar companies from picking, packing, and shipping products.
Solves staffing issues: With third party warehousing, you can reduce staffing issues by letting the warehouse do what it does best while you and your employees can focus on other aspects of running the business.
In today’s online marketplace, retail companies find relief in an increasingly common third-party warehousing distribution process. Professional 3PLs eliminate the need to invest in a physical location for product storage, offer better inventory accuracy, equip companies with improved data management, and can help provide better customer service.
If you are an up-and-coming online store, a third party warehouse and logistic services will reduce labour and increase efficiency. In turn, you’ll save money in the long haul and increase your company’s sales volume.
With Invenco’s enhanced 3PL, you too can acquire reliable inventory solutions and benefit from streamlining your flow of goods to achieve optimised resource consumption. We are the third party in your eCommerce transaction, ensuring that your customers get your products on time and on budget.
If you’re planning to start an online business or if it’s already up and running, there’s no need to worry about it taking off the right way. We offer a tailored quote in just 10 minutes via our online quote and can help you automate and streamline your logistics.
This ensures that your customers get their orders on time whenever they place an order. As a result, you’ll get excellent reviews that will scale your business to the next level. If you want to see your business flourish in Australia with less hassle while getting positive customer reviews at the same time, contact us today!