A guide for all businesses looking to enter the UK and use 3PL suppliers for the storage and order processing of their goods

Benefits of using a 3PL supplier

There are many benefits to using a 3PL supplier to store and process your orders. These benefits include:

• Reduced costs: Using a 3PL supplier can help you to reduce your costs by eliminating the need to invest in your own warehouse and fulfilment equipment. Economies of scale come into play here, with bulk buying power from packaging companies and logistic suppliers, your chosen 3PL should be able to offer you discounted rates that you will be able to purchase the goods and services required to process your orders.
• Increased efficiency: Using a 3PL supplier can help you to increase your efficiency by freeing up your time and resources to focus on other aspects of your business. Sound processes and equipment are all geared up for order processing so you would expect a faster more efficient process from your chosen 3PL hopefully all through an online warehouse management system that can integrate into your sales channels and marketplaces.
• Improved customer service: Using a 3PL supplier can help you to improve your customer service by providing a more consistent and reliable experience.
• Increased scalability: Using a 3PL supplier can help you to increase your scalability by allowing you to easily increase or decrease your fulfilment capacity as needed. Leaving you free of the responsibility of running a warehouse and the staff management required.

How to choose a 3PL supplier

When choosing a 3PL supplier, there are a few things you need to consider, such as:

• Your needs: What services do you need from a 3PL supplier? Do you need them to store your products, pick and pack your orders, ship your products, or handle returns? Each 3PL provider is similar on the surface, but we all have specialisms. Some will be able to manage small and light items better than bulkier ones. Some 3PL fulfilment companies will be able to look after the best before and batched products. Make sure you find a 3PL supplier that is able to give you access to your inventory, order integrations and a firm SLA on dispatch times so you can guarantee service to your customers about their orders.
• Your budget: How much are you willing to spend on 3PL services? With three main cost centres Storage, Picking and Packing as well as Dispatch.  Each gets presented very differently with each 3PL supplier as they will calculate their overheads and costs associated with your orders.  When comparing costs with multiple suppliers don't be fooled by low/headline pick rates.  We all have to pay labour costs for skilled staff that will look after your goods and process your orders as you would yourselves.  Make sure you don't get penalised when your orders grow and additional charges are applied for software usage or management fees that don't make sense.
• Your location: Where are your customers located? You'll want to choose a 3PL supplier that has access to all Royal Mail and nationwide couriers.  The UK is a small place relatively speaking logistically so Next Day shipments are commonplace and cheaper than you might imagine. Ask your account manager for the latest rates to help you with your planning.
• The 3PL provider's reputation: Do some research to see what other businesses have said about the 3PL provider. You want to choose a provider that has a good reputation for providing quality services. Ask for references and experience in your sector. A good 3PL provider should look to care about your items like you would, located correctly, securely and all orders are processed on time and without additional costs. Ask about dispatch times and picking accuracy figures, you may be surprised if the 3PL fulfilment supplier is established enough, they will be able to give you reasonably accurate figures.