“Third-party logistics (3PL) companies can help your business in a multitude of ways, but there are trade-offs to consider. Weighing the third party logistics advantages and disadvantages will help you decide the best way to grow your business”.
The fact is, no single solution is perfect for every business. There are times when using a logistics company doesn’t make sense, no matter what size your business is.
Limited Cash Flow – Third Party Logistics
Whether you’re a startup or not, if you don’t have the funds available, you may need to do it yourself. Sometimes your biggest resource is time and you have to work with what you have.
“Typically, there are only a few cases that might not make sense to use a third-party fulfillment service. First of all, if a company is a true start-up without significant cash flow to pay for a third-party service, using an outsourced provider will likely not be the best decision. In these cases, oftentimes the business owner must literally bootstrap the growth of the business, leveraging his or her time instead of paying employees or contractors.”
Highly Specialized Businesses
You may be surprised at the amount of customization many logistics company offer—I certainly was. Still, not everyone will be able to find a company that can do what they want. If your business has highly specialized needs, it might make more sense to handle your fulfillment internally.
“Second, there are companies that have uniquely specialized needs. An example might be a company that manufactures customized orders using specialized equipment. But for most other companies, third party fulfillment services can be a huge time saver that also offers cost savings.”
If you fall into one of the above categories, think carefully and do your research before considering third-party logistics.