Many brands in the growth stage stumble when it comes to their supply chain, specifically when it comes to the cost of scaling fulfillment to match the growth of the brand. A functional supply chain requires warehouses to store products and process orders, carriers to ship products to and from those warehouses, and a system that can keep everything working together.
Unless you have prior experience building your own supply chain from scratch, it’s a very risky and convoluted process to do it yourself. For instance, Amazon spent $166 million dollars building a 1.1 million square-foot warehouse in San Antonio. That’s not the kind of money you have hiding between the couch cushions.
Costs jump exponentially as you scale up. It’s much more expensive to implement warehousing and transportation for large inventory stocks than it is to dropship packages from your own office. On top of that, it’s extremely difficult to find and install the right kind of logistics tools to keep your fulfillment and your inventory running smoothly. The amount of time and money you have to invest in scaling your supply chain can sink your brand before it even gets off the ground.
For many growing brands, these logistics problems make the leap from being a small agile brand to a large iconic one seem impossible. It’s why the best solution is often to outsource these problems to third-party logistics providers that have the capability and expertise to handle them.
Third-party logistics providers (otherwise known as “3PLs”) offer an all-in-one solution that can handle the warehousing, inventory management, and fulfillment of your products. Good 3PLs can take the load off of growing brands with their nationwide warehouse network, reliable logistics tools, and great relationships with shipping providers. When choosing a 3PL, see if they can do these four things for you:
- Cut Down on Your Overall Costs
By definition, outsourcing your logistics to a 3PL immediately frees up capital that you’d otherwise have to spend contracting or building your own warehouses. That means no staff to hire, no transportation to set up, and definitely none of the paperwork and auditing required to ensure your products get to where they need to go.
But beyond that, 3PLs can offer you even more savings in shipping costs. Good 3PLs have deeper relationships with shipping providers and can get discounted rates because of their aggregated volume. They can then pass those savings onto you, which you can reinvest into your brand.
- Improve Your Order Fill Rates
Unfulfilled orders result in unhappy customers. Trying to reconvert unhappy customers costs much more than acquiring them in the first place, which is why order fill rate (the rate at which you fill orders successfully) is such an important metric to track.
This is an area where 3PLs can improve your brand equity. They have the expertise to successfully move tens of thousands of packages a day without missing a beat, which is one less headache for you.
Make sure to ask about the order fill rate of the 3PL you’re talking to. It doesn’t make sense to outsource your logistics if your 3PL doesn’t fulfill your packages at an acceptable rate, which is at least 95%.
- Scale To Your Needs
A good 3PL can scale up or down depending on your needs. For many apparel brands, their inventory and warehousing needs depend on seasonality. In order to fully optimize your logistics, you have to be able to choose when to store your big seasonal releases and when to save on shelf space.
Because good 3PLs have a nationwide network with exceedingly high capacity, you can strategically move your inventory to save costs and handle seasonal demand at the same time. As a bonus, you’re not the one paying for labor, which can save you a substantial amount of money as well as the headache of scaling your labor costs to fit seasonal needs.
- Continuously Improve Their Fulfillment Processes
Logistics, much like eCommerce, is a fast-moving industry. There is a constant stream of innovation that can help you money, time, and headaches when handling the last mile of the shopping experience. It wasn’t too long ago that packages were expected to take weeks to arrive to their destination. But thanks to Amazon Prime, 2-day fulfillment is by and large the industry expectation for all 3PLs.
Good 3PLs recognize this and work to optimize themselves in perpetuity. There’s always a better, faster, and more reliable way to fulfill packages, manage inventory, and save money. For instance, here at Symphony, we recently released the capability to virtualize inventory across all channels, which allows brands to make strategic inventory decisions based on the differing levels of wholesale and D2C demand.
When you’re growing your brand, you don’t have to do it alone. Every success story includes the support of partners and services along the way. With the right partner in place, growth won’t cost you an arm and a leg. The right partner doesn’t just alleviate the burdens of growth, the right partner helps fuel your success.
At Symphony, we have an entire team of fulfillment experts that are totally dedicated to improving the customer experiences on behalf of our brand partners. If you’d like to chat more about how logistics is a solvable problem for your brand, or if you’d like to know more about how you can grow your brand in today’s fast moving eCommerce market, drop us a line.