Any business owner knows that having your direct-to-consumer brand grow is a good problem to have – but can be a problem nonetheless.
As your direct to consumer brand grows, you face issues you didn’t face at the start. You spend more on staffing, product development, and managing the shipping and fulfillment side of your business can cause a major headache when the orders show no sign of slowing down – looks like another weekend at the post office.
So how do you tackle these growing pains without compromising your business? It might be time to bring in a 3PL (third party logistics) partner to take at least some of the hard work off your plate.
What is a 3PL?
This is the best place to start. Before deciding that you want to bring in a 3PL provider, it makes sense to get a full understanding of what they are.
So, what is a 3PL?
3PL stands for third party logistics. The service they provide is right in the name – a third party would manage logistics for a business. Businesses both big and small use third party logistics providers to deal with their shipping and fulfillment.
Some of the services that a third party logistics provider include:
- Product storage
- Pick and pack
- Package tracking
- Last mile logistics
- Shipping packages
- Route planning
- and more!
They are services that are key to your business thriving, but can be a handful to take on without support!
What Are the Signs Your Direct to Consumer Brand Needs a 3PL Partner?
Looking for a sign it’s time to shop? Well, here’s one. And another, and another….
1. You’re Running Out of Storage Space
Seeing your garage or condo fill up with orders can be exhilarating at first – you look around you at any time and see first hand your business success! But when you’re sleeping next to a pile of packed boxes, the magic can be lost.
Running out of storage space is a great problem on one hand. It shows that your business is succeeding! You don’t have space to hold all the orders coming in, but it also becomes a logistical nightmare. You quite literally cannot grow your business anymore – there’s nowhere to go. If this is the case, looking for a 3PL is a natural next step.
2. Shipping Takes Up All Your Time
Remember when weekends were meant for relaxing? If that’s a memory and not your reality, then it’s time to start looking for a 3PL partner.
You know firsthand that direct to consumer brands have demanding shipping needs when they take off, and your personal time may be taking a hit for it. When shipping becomes your exciting weekend plans, you may want to source a 3PL to take over.
3. Shipping Also Takes All Your Money
There are ways to offset shipping costs, of course, like charging customers the cost. But in a space where over 60% of shoppers will abandon online carts due to shipping costs, you want to avoid passing huge shipping costs on.
There are a lot of different signs that your direct to consumer business may be ready for a 3PL partner, but keep in mind all of these reasons and benchmarks will look different for every business. Really evaluate where your pain points are – you don’t want to buy too early.
So, How Does a 3PL Help DTC Brands?
Clearly there are a good amount of signs you might want to investigate a 3PL for your DTC brand. There are a lot of pain points of running your own logistics that can be minimized by bringing in a partner! But now that you know the pain points, you want to know how they fix them – rightfully so!
Here’s how a 3PL partner can help you and your direct to consumer brand.
1. Fulfillment Needs of All Sorts
It sounds general, but a 3PL partner helps with all of your fulfillment needs. Receiving orders? Yes. Picking and packing purchase? Yes again. Reduce shipping costs? Some providers, by up to 40%! Get orders to customers? You guessed it. Some 3PL providers can get orders to customers as much as three times faster.
A lot of features you need to keep up with the ecommerce boom (like free shipping, same day or next day shipping, and simple returns) are responsibilities that you can rest easy knowing your 3PL provider will own – and continually optimize!
2. A 3PL Owns the Post-Sale Process
To run an ecommerce business, you have to take care of everything before and after the purchase is made. Before the purchase includes making a product, building a website, marketing, and more. The process after the purchase includes shipping, packaging, and dealing with returns. And as your business booms, owning the post-sale process (especially returns) can be a huge time drain.
When you partner with a 3PL service, you don’t have to worry about the post-sale process. If an order needs to be packed, they pack it. If there are issues with tracking or shipping, a 3PL takes care of it. And when returns come in, it’s processed entirely by a 3PL provider.
3. 3PL Providers Bring Expertise
Chances are, you haven’t become a logistics expert – and that’s okay! You already spend time building your business becoming an expert on things like product design, marketing, and negotiating with vendors.
And it’s paid off! You’re at the point where demand is so high you’re looking at a 3PL provider. Bringing on a 3PL provider provides expertise to a side of the business that’s hard to master on your own. Where you understand how to package your product and optimize your seasonal ads like a pro, your 3PL partner knows how to optimize your process.
That level of expertise takes years of commitment (and a ton of upfront capital!) to get to. If you bring in a 3PL partner you trust, you can leverage the expertise they have.
4. Market Expansion
If you're an American retailer trying to ship to Canada, or vice versa, a 3PL partner can help. Expanding your direct to consumer brand into a completely new geography can hit you with fulfillment issues you never saw before. The good news is your 3PL partner definitely has seen those issues.
While it's a new space for you, an experienced 3PL provider has done this a few times. They should be able to give you insights into your new market and help optimize shipping across the new geography.
5. Storage Space
Believe it or not, you can get your living room, bedroom, closets, garage, parent’s kitchen… and more back! As your business grows, it’s probably become painfully clear that space is an issue. Lucky, it's an issue that a 3PL provider can help with.
As mentioned previously, being a 3PL provider requires a decent amount of upfront capital. A lot of that capital for a more established partner includes storage space – think how expensive warehouses are to buy and maintain! When you work with a 3PL partner, you get to use their storage space. You know your product is stored somewhere safe and you get your personal space back. It's a win-win!
6. Ongoing Support
Just because a 3PL provider is a third party (it's in the name, after all!) doesn't mean it should feel third party. A good logistics partner will function as a partner, as somebody who wants your business to succeed as much as you want it to.
The right provider won't sign you on and then not reach out. The right provider will be there on an ongoing basis. Whether you want help optimizing your operation or dealing with lost orders, your 3PL provider will be there every step of the way.
It's an ongoing relationship that sees your business thrive, not a signature on a contract that leads to radio silence.
An Ecommerce Partner Takes Your Direct to Consumer Brand to the Next Level
There's no doubt you're ready to level up your operations. A 3PL provider may be the key!