Most businesses start out by managing their own logistics; after all, it is a great way to save money. However, as your company starts to grow and change, there will come a point at which this inevitably has to change. Logistic processes will become an increasingly time-consuming task and, by keeping them in-house, you may actually start to hinder your business’s growth and development.
This is when a third party logistics (3PL) provider, such as John K. Philips, can be of help.
When should I invest in a 3PL company?
Every business is different and, as such, there isn’t a hard-and-fast rule to determine the exact point at which you should invest in a 3PL provider. There are, however, a number of tell-tale signs to look out for – if you can relate to any of the situations outlined below, it could be time to seek out a professional 3PL company and integrated logistics solution for you and your business.
No. 1: Business is booming
If you’re a talented and determined business owner, the chances are your company will have hit the ground running and it will be growing at a much faster rate than anticipated.
This is great news for your bottom line and long-term success, but it could also mean that your in-house logistics solution has started to struggle. Staff may become overwhelmed by the sheer volume of orders and, in a rush to keep up with the pace, mistakes will start to be made – having a negative impact on your company’s reputation.
When business is booming and you’re struggling to cope, this is an obvious sign that you should invest in 3PL. A good logistics company will take care of all your logistical processes, from warehousing to distribution. They will adjust to meet the ever-growing demands of your business, making sure that all orders are processed – quickly and professionally – on your behalf
No. 2: Sales fluctuate throughout the seasons
By their very nature, some businesses are likely to make more sales at a particular time of year. If this is the case for your business, managing your own logistics can quickly become expensive. You may not sell many products in the winter, but you will still need to staff your warehouse year-round and pay for a logistics workforce, and these expenses will do no favours for your profit margin.
In such circumstances, hiring a 3PL company could be the solution – offering maximum levels of flexibility and scalability. You will have access to workers, as and when required, and you can either dial-up or scale down the level of service provided, dependent upon your current needs.
No. 3: Important aspects of your business are being neglected
It is incredibly easy to get caught up in the day-to-day operations of your business. You may find yourself packing boxes, processing customer orders and sorting returns – as a result, things that are important to the growth of your business may start to be neglected and take a backseat.
Recruiting a third party logistics company will free up your valuable time, allowing you to do what you do best. You can focus on driving sales and building relationships with new clients and partners, whilst also having the peace of mind that your logistics are being successfully taken care of.
A good logistics company may even help to facilitate growth for your business. For example, here at John K. Philips, we offer a tailored integrated logistics solution for all of our clients and – by using the best industry practices and the latest technology – we strive to optimise your business’s development.
No. 4: You import a large volume of goods
If your business has started to import a large volume of goods from overseas, you will know there are a number of hoops that you have to jump through. All imports must be declared to customs, you must pay VAT and duty on all items, and there is a significant level of paperwork to be completed.
This process can become very complicated and frustrating and, if you are wasting valuable time in this way, it may be time to invest in 3PL services. A third party logistics company will take care of everything on your behalf, storing your non-EU products in a bonded warehouse and filing all the relevant paperwork to HMRC. Import duty and VAT payments will be deferred, paid only when your products are sold, and they can be easily re-exported without charge if necessary.
No. 5: Available storage space is starting to run low
As your business starts to grow, your inventory and stock levels are bound to increase – and a warehouse that was initially perfect may now be too small and cramped for your needs. Rather than paying for additional storage space, this may be a good time to invest a professional 3PL company.
A 3PL company can offer you unlimited space in a modern, secure warehouse. You can adjust the volume of storage space that you need, dependent upon your current stock levels, and thanks to the use of cutting-edge warehouse software, you will have access to real-time inventory information.
Contact John K. Philips today
John K. Philips is an industry-leading third-party logistics company, with over 40 years’ experience and a team of expert staff. By using our industry knowledge, expertise and innovative management software, we are able to provide a fully integrated logistics solution for our clients – including the warehousing, transportation and distribution of products across the UK, Europe and beyond.
If you can relate to any of the issues outlined above and you think that 3PL services could be the ideal solution for you, please feel free to get in touch. Either give us a call on 01744 751000, or send a quick message using our online contact form, and find out what we can do to help you and your business.