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    3PL for Retail: How Outsourcing Improves Operations


    Operating a retail company requires incredible bandwidth. Whether you operate a brick and mortar location, or simply sell online, any retailer depends on the efficient movement of freight in order to maintain their operations. From inbound inventory to shipping orders directly to customers, the main component of any retail operation revolves around logistics. However, what most casual shoppers don't realize is the number of resources you place on operating your supply chain. This is an area where working with an experienced 3PL can be incredibly beneficial for your retail business.

    In this blog post, we'll explain a few of the reasons why a retailer can benefit by working with a 3PL or third-party logistics provider. So – let's dig in.

    What's the Role of a 3PL?

    There are multiple roles that today's modern third-party logistics providers take on for their clients. For retailers specifically, they are essentially an outsourced agent that takes care of multiple supply chain functions. Hiring a 3PL allows you to focus on driving sales, improving customer service, and other daily operations that help you increase sales and thus, make more profits. Specifically, a 3PL can handle several specific logistics functions including:

    • Handling inbound and outbound shipping functions.

    • Assisting in warehousing, packaging, and even manufacturing in some cases.

    • Setting up all carrier functions, including parcel, LTL, FTL, and even air or sea shipments.

    • Creating shipping platforms for retailers such as TMS or CRM systems.

    • Completing freight audits and payments to logistics vendors.

    • Optimize logistics functions and operations – and so much more.

    When you can focus on your primary business functions, it permits you to scale your operational growth based on sales, profitability, and capacity. The 3PL's operations are likewise scalable, which is a huge benefit for any retailer since they don't need to spend money or time on hiring more people, purchasing supplies, and improvements in technology.

    How Can a 3PL Help a Retailer?

    3PLs are quite helpful for any type of business – but specifically with retailers, they provide a plethora of benefits. The main advantage you'll discover while working with a third-party logistics provider is breathability. A 3PL typically takes on a retailer's complete supply chain operation – from booking shipments to paying bills. Specifically, their interaction can benefit a retailer in the following four areas:

    Warehousing

    When you meet with a 3PL, they will determine the level in which they can help with your supply chain needs. One of the most popular options is complete warehousing. The warehousing breaks down to either dedicated or shared-space facilities. For smaller retailers, utilizing a shared-space with other like-minded retailers can reduce the costs, and offers them the opportunity to expand their space as sales or product lines increase. The warehousing function serves to allow the 3PL to handle the allocation of their goods to customers; which completely removes the need for shipping and receiving.

    Transportation

    While warehousing permits the 3PL to host a retailer's products, the transportation segment permits them to reach the retailer's customers. 3PL's maintain strong relationships with multiple carriers in different supply chain operations – from overnight carriers to over the road. They negotiate with their supply chain partners for discounted or volume shipping rates that reduce the cost of transporting goods for their retail partners.

    Labor

    If you don't physically need to ship your products, you will save a lot of money on labor. The 3PL maintains a staff of highly-qualified shipping and inventory control experts. The third-party logistics company can handle packaging, which protects the company's products and reduces the potential of damaged freight. You, on the other hand, can allocate your employees and payroll to sales and growth opportunities.

    Inventory Control

    When a 3PL takes care of your supply chain, they likewise control your company inventory. Professional 3PL providers utilizing modern logistics technology have years of experience in managing inventory control for multiple products in several industries. They utilize the latest technology and equipment to reduce the potential for handling, packaging, shipping, and inventory-related mistakes.

    Final Thoughts

    The four items listed above are just a few of the attributes and benefits that a third-party logistics company can provide you, regardless of your company's size. The best way to determine if a 3PL is a good fit for your retail company, whether it's brick and mortar or e-commerce – even drop shipping, is to contact an experienced 3PL and create a platform that makes sense. Contact Redwood Logistics today to learn how our Modern 4PL approach can transform your retail supply chain.

    FAQs

    What does a 3PL do for a retail business?

    A 3PL for retail acts as an outsourced logistics partner that handles multiple supply chain functions. That can include inbound and outbound shipping, warehousing, packaging, carrier setup for parcel, LTL, FTL, air, or sea, shipping platforms such as TMS or CRM systems, and freight audits and payments. This lets retailers focus more on sales, customer service, and growth.

    How can a 3PL help a retailer scale operations?

    A 3PL can help a retailer scale by taking logistics work off the internal team and providing scalable operations of its own. Retailers do not need to hire as many employees, buy extra supplies, or invest as heavily in technology when volume grows. That makes it easier to expand based on sales, profitability, and capacity instead of warehouse and labor constraints.

    What warehousing options can a retail 3PL provide?

    A retail 3PL can provide complete warehousing through either dedicated or shared-space facilities. Shared-space warehousing can reduce costs for smaller retailers and allow them to expand space as sales or product lines grow. The 3PL then manages storage and allocation of goods to customers, which removes the retailer’s need to handle shipping and receiving in-house.

    How does a 3PL reduce transportation costs for retailers?

    A 3PL can reduce transportation costs by using carrier relationships and negotiated shipping rates. Third-party logistics providers work with multiple carriers across overnight and over-the-road shipping and can secure discounted or volume-based rates for retail clients. That can lower the cost of moving products to customers while simplifying carrier management.

    Why do retailers outsource labor and packaging to a 3PL?

    Retailers outsource labor and packaging to a 3PL to reduce staffing burden and improve handling quality. The 3PL provides shipping and inventory control staff who can package products properly, which helps protect goods and reduce damaged freight. Retailers can then redirect employee time and payroll toward sales and growth instead of fulfillment tasks.

    How does a 3PL improve inventory control for retail operations?

    A 3PL improves inventory control by using experienced logistics teams and modern technology to manage stock across multiple products and industries. That reduces the chances of handling, packaging, shipping, and inventory-related mistakes. For retail operations, better inventory control means fewer fulfillment errors and more reliable order movement.

    Is 3PL retail a good fit for brick-and-mortar, e-commerce, and drop shipping businesses?

    Yes, 3PL retail can fit brick-and-mortar stores, e-commerce brands, and drop shipping models because the logistics needs are similar: storage, shipping, labor, and inventory control. The best fit depends on whether the retailer needs full supply chain support or only selected functions. A 3PL can be structured to match the business model and operational scale.