As a small business, arguably one of the biggest decisions you’ll make as you begin to scale is whether you should outsource your operations to a Third Party Logistics or 3PL.
The clear benefit of a 3PL is simply the fact that it’s a Third Party. You can’t keep fulfilling them from your garage, after all! More importantly, however, a 3PL allows you to refocus on the business and the sales strategies that probably need some care and attention.
On the flip side, however, not all businesses are at the point where a 3PL makes sense for them. Sometimes the business is too small or seasonal where the physical movement of goods (a herculean task) is not cost effective or perhaps access to your products are crucial for the business.
For example, one of our earliest clients thought they wanted us to take over their operations. The business was consistent enough where it made sense to work with us.
But ultimately, the owner needed the goods with her business to be effective and she actually enjoyed the fulfillment!
The point is that selecting a 3PL is truly both a personal a business decision. Sometimes the business needs force your hand and other times you simply know that the opportunity cost of doing operations yourself is just too high.
Here’s an article from e-commerce giant Shopify on 3PL’s and the pros/cons:
Third Party Logistics Explained