If you are a seller, third party logistics is one of the most important sections of your business. This section generally looks out for the warehousing and shipment of your product. Thus, having a good logistics department is key to any selling business out there. The reason behind the same being, if your product is impeccable and your delivery system is not worth, nobody would try to get a thing from you. Most of the businesses out there are incurring third party logistics. However, before you opt for the same, understanding the basics of 3pl logistics is very important. Here we will discuss what is third party logistics and how can the same be useful for your business.
What is third party logistics?
In simple words, third party logistics are someone who takes care of your after-sales. That is warehousing and delivery of the product. The seller hands over the product to a 3pl logistics and they do the delivery accordingly. Well, some of the businesses also opt for their own logistics; and in that case, the seller himself takes care of the delivery too. That might be hectic in some cases. Thus, clear about the knowledge of understanding the basics of 3pl logistics, and runs your business smoothly.
Is third party logistics good for your business?
In simple words, it depends. However, if you are smart enough, 3pl logistics can work clean for you without any heckling. Nevertheless, you should consider knowing your logistics perfectly before commencing any type of business with them. The reason being, there are always some pros and cons of any decision in business. And so do these 3pl logistics. Here we will focus on the advantages and disadvantages of a 3pl logistics and conclude whether this can be an option for your business or not.
Advantages of 3pl logistics
There is a handful of a pro in 3pl logistics; however one needs to identify the same and develop their business accordingly. Below are some of the advantages of third party logistics which you should consider.
- Heckle-free selling: If you have a proper third logistic service for your business, all you have to is to make good products for your consumers, everything else would be taken care of by the logistics. In this way, you can focus more on making quality than making taking deliveries.
- Global delivery: You do not have to worry about making international deliveries. And for the same, you can charge extra from your consumers too. However, you do not have to incur any extra charges. The reason behind the same being, the 3pl logistics will look into the matter on your behalf.
- Lesser overhead cost: This is one of the most important factors of all. Having your own logistics department means an extra overhead cost. That will include delivery charges and warehouse rent also. You can well wave these off with the help of a 3pl logistics service.
With some advantages in the book, these logistics have some disadvantages too. Below are the lists of the same.
Disadvantages of 3pl logistics
Well, in terms of disadvantages, the most important thing which comes first in our mind is trust. This is one thing you need to have while doing business with these kinds. Apart from this, here are some of the disadvantages of 3pl logistics.
- Responsibility: You will have a hidden responsibility after you are done giving your products to the logistic department. If there is any wear and tear, consumers will approach you and not the shipping company; which might be counted as a disadvantage.
- Initial cost: As there are no further costs of maintaining and shipping, there is a huge initial cost to incur in 3pl logistics. This might be a problem for any newly started business. However, if you can do the same, you are pretty good to go with this system.
- Lost control: Owners do not have direct access to their goods, once they are shipped to the logistics. This might raise an issue to control the stock and quality of the product.
In a word, 3pl logistics is a heckle-free system in which businesses can trust; however, they need to know some things before they actually initialize the same for the delivery of their products. If a business can have control over its logistics department, 3pl logistics is worth a try for sure.