The Ultimate Guide to Choosing a 3PL Warehouse: Key Factors to Consider

As the ecommerce landscape continues to thrive and evolve, the demand for cutting-edge 3PL warehouse solutions has never been more in demand. In fact, in 2022, third-party logistics providers surpassed retailers in warehouse space leases. This comes as a result of brands increasingly leaning on 3PL warehouses for their expertise, efficiency, and scalability. 

It’s widely known that for brands, with growth comes many new demands, particularly when it comes to efficient product management and storage. And not only can a 3PL warehouse safely store and efficiently ship your inventory, they can handle dips and spikes in sales, accurate inventory management, optimized storage, and so much more.

Let’s dig into some of the distinct advantages and valuable opportunities that brands can expect to uncover through 3PL warehousing.

What is 3PL warehousing?

To kick things off, let’s begin with what a 3PL warehouse is. 3PL warehousing entails entrusting your storage and distribution services to a specialized third-party logistics provider (3PL). With the expertise and infrastructure at their disposal, a 3PL assumes full responsibility for the entire process, starting from storing products in their state-of-the-art facilities, all the way to meticulously packing and swiftly shipping the orders to your shoppers.

This makes 3PLs an excellent choice for brands seeking supplementary assistance or those lacking in-house warehousing capabilities. 

Differences between traditional and 3PL warehouses 

Now let’s talk about the difference between traditional and 3PL warehousing. While there are many kinds of warehousing solutions available such as traditional retail distribution centers, cross-docking facilities, bonded warehouses, and cold storage warehousing, 3PLs offer something slightly different. 

The primary difference between a more traditional warehouse and a 3PL warehouse lies in ownership and management. Traditional warehouses, or private warehouses, are typically owned and operated by the brand itself, necessitating substantial resources such as staff, technology, equipment, and upfront capital investment. Conversely, 3PL warehouses are entrusted to external entities, sparing brands from these burdensome requirements.

The top seven services and benefits of a 3PL warehouse

Now when it comes to the service offerings of a 3PL warehouse partner, you can expect to enjoy many opportunities to optimize your supply chain with the expertise of your third-party partner.

1. Cost savings

By outsourcing warehousing operations to a 3PL partner, brands can save on costs associated with building or leasing warehouse space, investing in equipment and machinery, hiring and training staff, and maintaining inventory systems. 3PL providers often have economies of scale, allowing their brand partners to benefit from shared resources and reduced operational expenses.

2. Scalability and flexibility

When GoBolt merchant Risedesk saw their shipment volumes balloon, they knew they needed to find a 3PL partner that could quickly flex with their rapid growth. 3PL warehouses offer scalability, enabling brands to adjust their warehousing needs according to fluctuating demand, just as Risedesk did. 

Whether it’s seasonal peaks, promotions, or business expansion, a 3PL provider can readily accommodate volume changes, offering the flexibility to scale up or down as required. This ensures efficient inventory management and reduces the risk of overstocking or stockouts.

3. Expertise and specialization 

3PL providers like GoBolt specialize in logistics and warehousing services. We possess extensive industry knowledge, advanced technology systems, and we employ experienced and trained professionals who are well-versed in efficient inventory management, order fulfillment, and distribution. 

GoBolt brand partners can also gain access to our enhanced support offering, which includes dedicated on-site warehouse support. This helps to navigate and mitigate any issues that may arise during the fulfillment phase. 

Leveraging a 3PLs expertise can lead to streamlined operations, optimized supply chain processes, like order orchestration, improved customer support, and shopper satisfaction.

4. Focus on core competencies

Outsourcing warehousing to a 3PL provider allows brands to concentrate on their core competencies, such as product development, marketing, and sales. By delegating logistics and fulfillment tasks to experts, companies can redirect their resources, time, and energy toward strategic activities that drive growth and enhance their competitive edge.

5. Enhanced network and infrastructure

3PL providers often have a vast network of warehouses strategically located across different regions or countries. At GoBolt, our distributed fulfillment network enables brands to reach a broader customer base, reduce transportation costs, and improve order fulfillment speed. 

Additionally, our proprietary technology, such as our Merchant Portal, routing algorithm, warehouse management systems, and electric vehicle delivery fleet, enables brands to leverage advanced infrastructure without significant upfront investments.

6. Improved efficiency and performance

With sophisticated systems and processes in place, 3PL warehouses can achieve higher efficiency levels and operational performance. At GoBolt, we are equipped with warehouse management systems that optimize inventory visibility, tracking, and picking processes. This assists us in achieving our 99.9% pick accuracy, faster order processing (including same-day fulfillment), and improved overall supply chain performance.

7. Risk mitigation

3PL providers assume a certain level of risk associated with warehousing and logistics operations. They have robust security measures, weather-related recovery plans, and insurance coverage to safeguard inventory from theft, damage, or other unforeseen events. This helps brands mitigate risks and protect their valuable assets. 

Added perks: How to get the most out of a 3PL warehouse

There are a lot of 3PL warehouse options out there. But some 3PLs extend their capabilities beyond basic storage, offering a plethora of value-added services. When searching for a 3PL warehouse to partner with, here are a couple of added benefits to ask about:

If you’re looking for this…Ask about this…
Quick and efficient fulfillment– Do they offer optimized storage through their warehouse management system? When your 3PL optimizes inventory placement within the warehouse, it provides a more efficient fulfillment process.

– What is their fulfillment SLA? At GoBolt, we offer same-day fulfillment along with a 99.9% pick accuracy.
Accurate and optimized fulfillment between multiple warehouse locations– Look for a 3PL that offers order orchestration. For example, for brands that store goods at more than one GoBolt warehouse, our order orchestration feature intelligently assigns orders to be fulfilled and shipped at the optimal facility.

What is order orchestration? It’s the automated steps that go into fulfilling an order efficiently. The process takes into account the location of the shopper, as well as the inventory levels at each warehouse where your inventory is stored. The automation will then select the optimal facility to fulfill from to help improve delivery times and reduce postage fees.
Transparent communication– Do they value communication and see it as crucial for a successful collaboration?

– Does the 3PL warehouse have robust communication channels in place, providing timely updates, order tracking information, and responsive customer support
Visibility into your inventory– Do they offer visibility into your inventory, order statuses, and shipment tracking? 

– The GoBolt Merchant Portal gives brands real-time access to view inventory levels, order and return status, and shipment details. 
A personalized experience for your shoppers– Your 3PL partner can help personalize your shipments with value-added services like kitting or assembly to help improve the shopper experience.

– Here are a few custom fulfillment services that can help elevate your brand: Custom boxes or packaging, kitting, and inserts, like a thank you note or coupon for their next purchase.
Sustainable practices– Ask about their commitment to sustainability. Do they prioritize their sustainability throughout their service offerings? 

– Do they utilize sustainable materials for packing and shipping?
Look for materials sourced from FSC-certified suppliers, and materials made from 100% recycled, starch-based products. 

A great 3PL warehouse partnership should operate as an extension of your brand

When it comes to storing and managing goods, warehouses managed by third-party logistics providers have distinct differences. So be sure not to settle on one that offers sub-par services.

By diligently researching the different options available, you can find a solution that aligns with your brand and your specific fulfillment needs. This can result in improved efficiency, cost savings, and customer satisfaction, ultimately leading to better overall performance in today’s competitive business environment.