business process

3 Ways to Evaluate a 3PLWarehouse

General

If you provide goods for retailers, distributors, or the final customer, the ability to supply goods in time and in good condition is crucial.Your supply chain is the most important part of your business process. 

Supply chain involves more than just delivering goods to customers. It begins from the time you start sourcing for your production supplies, the production process, transportation, and finally distribution to the final customer. When your entire supply chain is streamlined, you are set for profitability. 

When it comes to distribution, choosing the right distribution channel to get your goods to the intended destination is essential. One of the most popular distribution channels are 3pls, thanks to its numerous advantages.

Being that there are so many 3pl distribution centers in the market, choosing the best 3pl distribution center can get tricky. How do you evaluate whether a 3pl company is best for you before you settle?

Below are some insights:

 

  • Check out their portfolio

 

Excellent customer service matters a lot. If you want a company that you can develop a long-term relationship with, you should ask for their portfolio. From a portfolio, you can obtain a list of past customers and get some reviews on how they view the company.

Try to be objective with the information you receive because not every customer will be a fan of a particular business. If you, however, notice that there are numerous complaints about the company, beware about working with that company.

Another thing you need to check about the portfolio is the kind of services they have offered before. Have they dealt with your type of goods and offered the exact services that you are looking for? Try not to work with companies that do not have a track record.

As you conduct your research on a particular company, check for factors such as openness, communication. Avoid companies evade your queries or give incomprehensive responses. 

 

  • Location

 

The best 3pl distribution must be strategically located to meet your needs.

Some of the factors that you need to consider include:

 

  • Wide reach

 

Most 3pl providers run multiple warehouses in different locations. This is important for your growth. When you want to expand your business to a particular area, you may want to continue working with the same 3pl distribution company, so it helps if they have set shop in major towns that are or may be of interest to you.

 

  • Proximity and access to major highways and ports

 

First, there should be a quality highway that allows you to access the company with ease. This helps to reduce the cost of transportation and potential damage to fragile goods. The 3PL company should also be close to a highway. 

The entrance and exit to the warehouse should not be obstructed, making it more difficult for faster transport of goods. 

When you have goods that are being transported by sea, proximity to a port is key. It enables the shipper to receive their goods at a cheaper price than if they were using air transport and also enjoy timely service.

A warehouse with locations that are close to your customers is great because you get to save transportation costs and that reflects in the pricing.

 

  • The type of provider

 

There are two types of 3pl providers, asset and non-asset-based 3pls. Each of these has its pros and cons. It is up to you to decide what you can work with.

An asset-based 3pl is one thatowns most or all of the assets it uses in business. These include warehouses, distribution centers, and transport. In such a case, you’re the people who handle your goods are vetted and supervised by the company, which ensures that quality control is uniform. 

A non-asset-based 3pl does not own its business assets. Instead, it partners with the owner of the assets. Such a 3pl acts like a middleman and negotiates on your behalf to these asset owners. In such cases, there is little control over who handles your goods. Non-asset based 3pls are, however, said to be cheaper than asset-based ones.

Final Words

A poor distribution process can lead to loss of customers, business losses, and even business failure. Hiring a 3pl company can help you streamline your distribution. 

When you are looking for a company to partner with, check how the company has worked with other clients in the past. Has it offered excellent services and created long-lasting relationships? Also, gauge their communication and responsiveness from the start.

You should choose a distribution provider that can meet your specific needs. That includes being able to handle the type of goods you have and having adequate capacity.

The best 3pl warehouse also needs to have easy access to transportation systems. Additionally, it should have a wide reach to cater to your needs for future growth.

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