It is extremely difficult to run a company at any scale beyond a small region without developing a robust, resilient and rapid ecommerce service.

Modern customers expect businesses to be accessible online, so that they can easily make orders that will be fulfilled quickly at competitive prices. In a lot of cases, they will look elsewhere if they find the online sales channel to be wanting.

Ecommerce has come a long way since a copy of Sting’s Twelve Summoners’ Tales was the first item to be sold online using the modern, secure systems we expect to see today.

This is where third-party logistics (3PL) comes in, as they can allow a business to scale its operations without making significant financial and infrastructure commitments that could severely hamper a small business as it tries to work out the appropriate size of its operations.

Here are some of the biggest advantages, which can be the difference between a company thriving and folding as it tries to grow.

Low Initial Capital Commitment

A common trend for companies that became too big to be small businesses but struggled to grow fast enough to survive is the major capital commitments required to scale up sales operations.

A small business can work in a relatively small storage facility with an accompanying office, but meaningfully scaling requires purchasing warehouse space, building fulfilment centres and developing a transportation network.

These are hugely expensive if a company tries to do it alone, but using a 3PL service removes that upfront commitment. You pay for what you use and scale up those requirements as your business grows.

A 3PL agreement could remain in perpetuity, allowing for seasonal shifts in demand, or provide a flexible means to determine the true scale of a company if the decision is made to take everything in-house.

Saves Time

Another aspect that is sometimes underappreciated is how much time it takes to develop logistics systems in the first place. It is a huge step to go from a single van or using ad-hoc courier services to developing an entire in-house logistics system.

It can therefore be hard to develop a fulfilment infrastructure that is adaptable to the company’s sales landscape, so a better option for many small and medium-sized businesses is to work with companies that are built around helping companies like them succeed. 

Avoids Distractions

Another issue with scaling up your ecommerce operations without the help of a 3PL partner is that it can be extremely distracting and take vital time away from your core business.

If your company has a relatively small number of staff, having them work on fulfilling growing numbers of orders will take away from a focus on your core business and could potentially lead to a company struggling in the long run.

It is an infrastructural version of the Peter Principle, the idea that individuals who are particularly skilled will be promoted into positions that require skills they do not have.

Businesses that struggle to scale take away from what they do best, which makes a 3PL partner who specialises in the business of scaling up vital to ensure that a business remains laser focused on ensuring they work on what they do best and what their customers want from them.