3PL Vs. In-House: Which Order Fulfillment Option is Best for You
This is a guest post by Chloe Bennet.
When it comes to fulfilling orders for customers, retailers have two options to choose from – either fulfilling them in-house or outsourcing them to a third-party logistics provider, also known as a 3PL. Each option has its benefits and drawbacks, and retailers will have to examine their specific situation to determine which is best for them.
Pros of In-House Fulfillment
3PLs are becoming increasingly popular, and these days nearly all Fortune 500 and Fortune 100 companies utilize the services of 3PLs. But, despite their growing popularity, many companies still turn to in-house fulfillment for a number of reasons, including:
- No third party will know their business like they do themselves
- It’s easier to resolve issues when you’re dealing with them in-house
- Changes and adjustments are easier and faster to make
- It can be difficult to sever relationships with 3PLs once they are established
- Client relations can be hard to manage when you’ve relinquished control over deliveries
- Communicating with third party drivers can get difficult
One of the most difficult points above to overcome is actually the last. Because drivers are so closely linked to fulfilling orders, having a good understanding of what they are being advised to do and how they are being supervised is essential to fulfilling your orders as promised to your customers.
Considering all of the above, there are still plenty of positive factors to consider when looking at 3PLs.
Pros of 3PLs
Outsourcing your order fulfillment can have some drawbacks, but there are also still plenty of advantages to putting this task into the hands of a third party.
- An unbelievable amount of resources are used to fulfill in-house shipments, which also means a larger staff is needed
- Wages paid to additional staff will likely outweigh the costs associated with outsourcing the work to a 3PL
- 3PLs have access to information about the most competitive rates, and can compare and select the best one available
- Generally, third party logistics companies have low overhead costs
- They’ve always got the latest, most up-to-date technology
Even though you may be relinquishing some control over warehouse management when choosing a 3PL, you’ll be gaining access to the extensive warehousing facilities that 3PLs have. “If you’re dealing with fulfilling shipments in foreign countries, a 3PL that is experienced in that country will be better equipped to handle what lies ahead,” explains market expert Kenneth Fraser, of BestBritishEssays and Revieweal.
There are also fantastic warehouse management systems that range from simplistic to highly complex, and that can remotely help you access information, track inventory, and monitor the progress of fulfillments.
Get it Picked, Packed and Shipped
After an order is placed, the process of picking, packing, and shipping that order begins. There’s got to be a high level of coordination happening, along with good timing to meet the shipping expectations of the client. If there’s any type of hiccup in the process, it can seriously impact the client’s satisfaction and will ultimately cost you money.
“One of the best arguments for choosing a 3PL is related to the technology they employ. Using the most advanced fulfillment software available, tech-enabled 3PLs will be streamlined to allow for the easy flow of information, saving time and essentially automating everything in the supply chain,” outlines Doris Burnett, a business writer at UKWritings and UKServicesReviews.
Another great advantage of 3PLs is having the ability to split your inventory between fulfillment centers, through the use of software integration and analytics. This can help make supply chains more effective and minimize errors over a long-term period.
There are a Few Things to Consider Before Deciding
When you’re trying to make your decision on fulfillment options, here are a few things you’ll want to keep in mind:
- Regular investments will need to be made to keep up with an ever-changing demand
- Seasonal changes in orders can lead to spikes and drops in sales, so how can your potential 3PL provider manage these significant fluctuations
- 3PL providers can dramatically decrease costs around handling and shipping
Depending on the needs of your company, you’ll want to take a look at the two fulfillment options you have and decide which one would best suit your shipping and order fulfillment needs.
This was a guest post by Chloe Bennet.
Chloe Bennet is an editor at Case Study Writing Service and Top Assignment Writing Services in Queensland. She helps with business communication and reviews online submissions. Also, Chloe tutors at Essay Writing Services portal.