01 Feb Exploring Expansion Using 3pl

One of the toughest issues businesses face is how to expand into new markets and territory – today we’re exploring how this can be achieved with the assistance of 3pl:

What Is 3pl?

The first thing we need to cover is what 3pl actually is. Standing for third party logistics, 3pl is a system by which an external company manages logistics for you. This can carry a whole host of benefits for expansion which we will go through later in this article. Essentially, you will outsource either a portion of, or the entirety of, your logistics to a third party provider who then handles aspects of your business such as warehousing and freight and the associated logistical procedures. 

How Do You Set Up 3pl?

Setting up third party management of your logistics is as simple as selecting your preferred provider. They’ll need access to some pretty sensitive information and will be in charge of a significant function within your business so it is important to do your research and select a company that you trust. You may also be able to access other services provided by your chosen company as your partnership grows, so laying a solid foundation for your relationship now will be useful for the future.

How Does 3pl Assist With Expansion?

3pl can assist with expansion in many ways including those listed below:

Access To New Areas

One of the most significant ways in which third party logistics can assist in the expansion of your business is by providing access to new areas. In order to service many locations, it is vital to have local stock on hand. This requires warehousing, staff and a whole lot of admin that is costly in terms of both funds and resources. With the assistance of a third party provider, however, the process of expanding into new areas is a piece of cake as they already have existing infrastructure to support service within the area.

Better Freight Pricing

Because third party logistics companies tend to manage freight for multiple clients they can often access pricing and deals that are not available to standalone businesses. This means you can save a significant amount on the cost of freight (and warehousing if you are making use of their storage systems) meaning you’ll have more room in your budget for other expenses and activities allowing for greater expansion at a faster pace. 

Streamlined Processing

Another key benefit of outsourcing your logistics is that your processing in this department will become highly streamlined. Because 3pl providers specialise in managing logistics for multiple companies, they know how to get things done efficiently and since your staff aren’t handling the nitty gritty, they can focus on other aspects of expansion.

Lower Wages Bills

You’ll also benefit from lower wage bills when expanding with the help of a third party logistics provider as you won’t need to have a specialised team at each and every location. While you may wish to have an agent for each area, you’ll face far less strain on your budget with each new location.

Can You Go Global With 3pl?

You’ve probably already worked out the answer to this question based on the rest of the article but since we get asked a lot, we figured it deserved its own section. The good news is that we can happily confirm that it is entirely possible, and in many cases actually easier, to go global with the assistance of a 3pl provider. 

Hopefully now you have a better understanding of how to expand with the assistance of a 3pl service provider – we wish you luck in building your empire!