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The Hidden Costs of Skipping a 3rd Party Logistics Company (3PL)

You’re no stranger to a healthy challenge. You’re a business owner. However, through the years of being self-motivated, you’ve hopefully learned that the adage “if you want something done right, you have to do it yourself,” doesn’t always apply to the business world. Certain things are better off outsources, especially if there’s an industry of experts out there. That’s precisely why we exist as a 3PL. We’re the experts in our field, and you might even be surprised to find that it’s cheaper to defer to us in all things logistics. Here’s why.

Inefficient Warehousing Costs:

One of the primary benefits of a 3PL is efficient warehousing. Businesses that avoid 3PLs often end up with inefficient warehousing systems. This inefficiency can lead to wasted space, improper inventory management, and increased holding costs. A 3PL, with its expertise, can streamline warehouse management, potentially saving businesses significant sums.

Increased Labor Costs:

Hiring, training, and maintaining a dedicated team for logistics can be costly. This includes salaries, benefits, training programs, and turnover costs. 3PLs have specialized teams in place, spreading their labor costs across multiple clients, offering businesses a more cost-effective solution.

Lack of Bulk Shipping Discounts:

3PLs often handle shipments for multiple clients, which allows them to negotiate bulk shipping discounts with carriers. Independent businesses may find it challenging to secure similar rates, leading to higher shipping costs.

Expensive Technology Investments:

Staying competitive in e-commerce demands investing in the latest logistics technology – from inventory tracking systems to advanced analytics. These investments can be costly for individual businesses. 3PLs, on the other hand, spread the cost of technology across multiple clients, ensuring that each business gets access to the latest tools without bearing the entire cost.

Lost Sales Due to Stockouts or Overstock:

Without the sophisticated inventory management systems and expertise provided by 3PLs, businesses may experience stockouts (losing sales) or end up with overstocked items (which might lead to discounted sales or wasted inventory). Both scenarios can significantly impact profitability.

Expanding Market Reach:

A 3PL can quickly expand a business’s shipping range without incurring the high costs of setting up in new regions. Without a 3PL, businesses might miss out on tapping into lucrative markets, or if they do try to expand independently, they might face exorbitant setup costs.

Costly Returns Management:

Returns are an integral part of e-commerce, and managing them efficiently is crucial. Without a 3PL, the process can become time-consuming and expensive, leading to dissatisfied customers and potential lost future sales.

Scalability Challenges: 

During peak seasons or sales, order volumes can spike. Handling these surges without a 3PL can lead to delayed shipments, overtime labor costs, and potentially dissatisfied customers. 3PLs can seamlessly handle volume fluctuations, ensuring consistent service levels without unexpected cost surges.

If you’re looking for the leading commercial warehousing in New England, look no further. Strategically located in Springfield, Massachusetts, our warehousing is ideally situated on the threshold of Boston, New York, the harbors and air terminals of the Northeast. More importantly, we are a one-stop-shop for all of your distribution, logistics and transportation services so you can fulfill all of your needs with a single partner.

Reach out to us today.

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