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3PL companies – The 3 types you will find

3PL companies for different clients

Let’s go over the different types of 3PL companies that you will find on your journey.

3PL companies

The Extra Space 3PL – “We have some extra space in the warehouse. We should get someone else’s things in here”. Simply put they are focused on their own company first as opposed to their clients within the warehouse. This may be cost effective on slow moving and bulky items, yet the speed may not be responsive. 

The Large 3PL – “Our Minimum Order Quantities (MOQs) are 100 orders per week, you must be met this or be charged according.” This tends to suits very established brands with high volume sales, regardless of sessional changes. Most pricing looks impressive on first glance yet additional charges need to be assessed. These large 3PL have a large number of clients and responsiveness is generally OK. Things outside the normal scope generally aren’t catered for.

Custom 3PL – “We are open to seeing how we can work together, tell us about your business and expectations”. Here, generally each client is catered for in different ways. Responsiveness is paramount with a good level of TLC for picking and packing. Requests outside the scope for special wrapping, kitting products together, boxing items for sale, etc,… can be catered for if need be. The power of flexibility may be important for the client and catered for as their business grows.

Here at Lucas Arthur 3PL we are a Custom 3PL, if you think you need to team up then reach out to us here and let’s see how we may be able to help you. 

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The right fit with the right 3PL can help make your business partnership smoother and add a great advantage to your business. Communication is paramount in all cases.

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When is a good time to outsource to a 3PL? ?

Fielding calls from prospective clients, one of the key questions that inevitably comes up in the call is ‘when is a good time to swap over the 3PL?’ 

The first and foremost cause for most clients wanting to come onboard is time. Many clients get to a point where time vs revenue deriving activities gets to a tipping point, and wanting to use their valuable time to grow their business and build new additional revenue channels as opposed to using labour to pick/pack and ship items which has already produced revenue (the sale). 

Being a business that focus’ on start-ups and businesses that are going through a growth spurt, we also find that another reason many seek to engage a 3PL is that they want to claw back some of their home and family time and to reclaim the space back from their loungerooms and garage space that is being allocated to pick/pack servicing and stock control.  

There is always a tipping point, one that is generally very personal in nature and will come down to existing revenue vs missed revenue. It’s important to sit back and assess your business model, to look very logically and without emotion on how your business in performing including both revenues and costs. To assess if its profitable, if it is increasing in volume (units) and more importantly if there is room for improvement in all facets of the business. This will include sales, margin, staffing and promotional activities.  

Once you have had this review, have a deep look at your time. Write down what your day looks like, be it over 5 or 7 days, and what you do throughout your day… Most of our clients tend to notice that the time they spend fulfilling their orders is around 2-5 hours per day. This generally gets broken down into getting geared up to do the orders, printing orders, picking, packing, coffee, child interruptions as well as wait times for courier collections or even freight drop offs.  

When you have this noted, then go back to your business assessment and see how this may impact your ability to drive your business. To gain new revenue, as opposed to working on fulfilling orders that your revenue has already been collected on. Whilst we understand that reducing your cost to fulfil your own items, we have noticed time and time again when working closely with our clients that this has an adverse effect on your growth capacity. It can change the dynamics of your business and place you in the reactive space as opposed to being proactive and seeking growth – unless very disciplined.  

Our goal is to remove the non-revenue draining labour costs that are attributed to fulfilling and allow you to work on growth and to build your empire. Let us do the mundane and routine, let us be your strength on the ground and let us be your silent partner – all of which we take very seriously.