3PL - Understanding the Importance of Scalability

3PL - Understanding the Importance of Scalability

When searching for the perfect 3PL (third-party logistics) provider for your growing business, there are a wide variety of factors that you must consider. You will, for instance, want to find a logistics provider that has years of experience in the industry, a track record of success, and a history of financial stability.

 However, when researching 3PL companies, there is one trait that you may wish to give precedence over the others - scalability.

3PL: Why is Scalability Vital?

3PL: Why is Scalability Vital?As an entrepreneur, growing your business from 200 orders per month to 20,000 orders per month should be a dream come true. However, if your third-party logistics partner cannot keep up with your increased demand, it is likely to turn into a nightmare.

The first issue that you are likely to notice is a growing number of disappointed customers. They won't be upset by the quality of your merchandise. They will be annoyed by their deliveries being delayed or shipments going missing in transit. When a 3PL provider is unable to scale and is forced to over-extend itself, these issues are almost inevitable.

Of course, once customers begin to complain, you will need to find a way to keep them happy. Quite often, this means issuing refunds or offering them steep discounts on future orders. By now, you will be beginning to realize that your 3PL partner is costing you quite a lot of cash.

Unfortunately, the losses won't end there. While you search for a new logistics provider who can keep up with your demand, you will need to limit the number of orders that you can process. Turning down sales in this way will reduce your revenue and may force your customers to shop with your competitors instead.

To avoid these issues, and many more besides, it is vital that you work with a 3PL partner that can keep up with your business.

How to Tell if Your 3PL Provider Can Scale with YouHow to Tell if Your 3PL Provider Can Scale with You

Finding 3PL companies that will tell you that they can grow with your business is easy. Finding logistics partners that are actually ready to scale can be a little trickier. But how can you tell the difference?

The easiest way to identify whether or not a 3PL provider offers the scalability you need is to take a trip to their warehouse. If their facility is disorganized or packed to capacity, they may not be the right partner for you. However, if they have plenty of available shelf space and systems in place to keep everything organized, you may have found your new logistics partner.

If, after visiting their warehouse, you still aren't certain whether a 3PL provider is ready to scale alongside your growing company, you can also ask them if they can provide you with any references that can attest to their scalability. Should they be unable to fulfill this request, you may wish to explore other options. However, if they can provide you with a long list of happy customers that have witnessed their ability to grow up-close, you may wish to call off the remainder of your search.

At American Manufacturing Solutions, we have spent years creating the systems and building the capacity needed to keep up with the growth of our clients. If you would like to talk to a member of our team about your company's logistics needs, just give us a call at (419) 300-1007 or contact us online.