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Expanding with a 3PL

The idea and process of expanding business can be exciting, busy, and even scary at times. Moving into new and uncharted markets can bring out the best for many businesses such as a new customer base, shorter shipping times from multiple distribution centers, and a larger footprint. Researching the area and infrastructure, the economy, and what makes sound financial sense is all part of the job when expanding into a new market. Here are a few questions to consider when thinking about expanding business and using a 3PL to help:

How can working with a 3PL make expanding easier and more efficient?

Working with 3PLs can be a great way to minimize capital and real estate expenses, as well as hiring and training costs. 3PLs that embody a true partnership mentality understand their clients’ business and can make suggestions for lowering costs and reducing risk while the company is in the expansion stage. Remember, a 3PLs core competency is logistics where yours may be new product development or manufacturing. 

How will expanding and outsourcing affect risk management best practices?

From a risk management standpoint, outsourcing when starting up or expanding into new markets is a “no-brainer!” Having a local partner who understands the nuances of the area minimizes risk during the expansion.  A 3PL partner can also work as a support system moving forward with the company as it experiences normal ebbs and flows.

In what ways can a 3PL help save money during an expansion?

Major costs of expansion include infrastructure as well as hiring and training new employees to run logistics correctly. If a strong infrastructure is already in place, a company can take advantage of variable costs over fixed costs, which can increase working capital – a vital resource during expansion.  Working with a 3PL also alleviates labor resource issues. 3PL employees see multiple industries and services, bringing valuable insights to your operation. Because logistics professionals are trained to work efficiently and accurately are there for every account throughout the supply chain.

What if the work is already being done by a 3PL?

If storage, distribution, value-added services and transportation work is already being completed by a 3PL, moving into new markets with the same company is easy. See last week’s blog post to learn how you can be up and running quickly and efficiently. If the 3PL is not in that market already, the 3PL can expand with you. See how Murphy did it a few years ago! If the partnership does not warrant an expansion by your 3PL, recommendations to quality 3PL organizations are a great way to find a good partner. Because your current partner knows your business and procedures already, they can generally find a good match through their industry connections.

In conclusion

When it comes down to making a decision, is having a quality support system as a partner in the best interest of your company during expansion? The easy answer is yes. Working with a 3PL is not only beneficial for the bottom line, but can help alleviate many of the pain points during an expansion. What could be better than getting the benefits of a new market, expanding customer bases and shorter shipping times – all while finding a new, quality partner? Make sure to follow the blog and return next week as we discuss relationships with a true partnership mentality!

Have a wonderful day!