For many Amazon sellers, finding the best and most cost-effective way to store and ship goods can be a problem. There is a careful balance to keep between how much to store in Amazon’s warehouses at their high cost of storage, and how little to store and risk running out of inventory with customers still wanting to buy. The wrong choice can cost a lot of money and hurt your business, so finding a logistics partner is vital, regardless of what you sell.
That’s why third party logistics services seem to be the new way to go, offering alternative warehousing options for Amazon sellers looking for ways to make their business more profitable and efficient. But there’s no need to take our word for it - the facts speak for themselves. Keep reading on to learn more about why these services are right for you.
Experience on Your Side
When you decided to start your business, you did so because there was something that was interesting to you that you had a passion for. It might have been a product you made or something you had others help you create; regardless of the result of your hard work, it needed a way to make it into the hands of those it was meant for - your customers. Suddenly, you had to either become an expert in shipping and logistics or hire someone who was.
Unless you had prior experience or connections, this might have been the limiting factor for your company. With a 3PL service at your fingertips, however, this need is never a worry. Decades of experience and all of the connections that it comes with are just a part of the standard services. From the most efficient methods of packing, to the best manner of shipping, you’ll see yourself saving money with this kind of a business partner on your side.
How Experience Saves
They say that you’ll end up paying for inexperience, and in this case they couldn’t be more right. One of the biggest costs associated with selling online is the cost associated with logistics – that is, moving your goods from where they are to where they need to be. How do your products make it into the hands of the consumers that buy them? Amazon has their own infrastructure and is great at handling all of that for you, but they are certain to pass on the costs to you as the seller.
Logistics is anything but simple, and that complexity means that you either must trust the system that Amazon has in place or get an experienced partner to step in and help. 3PL services are just that – professionals who have decades of combined experience in the field of logistics. They know all about the inner workings of the field, from storage to packing to movement and transport, which means they have intimate knowledge about what works and what doesn’t.
Being able to put their knowledge to work for you and doing so with buying power large enough to drive costs down across the board for all of their clients, 3PL professionals can save your business money now and in the long run regardless of what you sell or what your selling volume is. There is no guesswork in how to send things, who to ship them with, or where anything is at any time, and this knowledge can be leveraged as an almost superpower by any seller willing to dive in.
One of the best things about having a good 3PL partner on your side is the fact that this is a totally scalable service that can increase or decrease according to the needs of your business. It is an absolute certainty that any company has peak seasons and seasons where sales dip. Usually this means that you must handle hiring or organizing services for the times when business exceeds your current capacity, and let those people go when sales return to the lower end of the spectrum.
Instead of getting caught in this vicious cycle, connect with a 3PL partner and see the cost savings add up not only in human resource dealings, but in avoiding stockouts and other inventory and logistical troubles. Know that you’ll be able to ship goods even during the busiest times when Amazon puts limits on how much you can store in their warehouses – like during the holidays – with a 3PL partner. Furthermore, see how much you can save while taking care of goods that ship from your suppliers, whether they are international or not, without having to worry about long term storage fees assessed by Amazon for larger inventories.
When you put all of your eggs into one basket, you can often find yourself in some kind of trouble. Whether the trouble is because of the warehouse itself, or because of some external pressure put on the warehouse, having alternative options is always a plus. This is even more true if you are an Amazon seller who also works on selling through other channels. Regardless of the product, you can’t make a customer happy if you cannot get the product to them fast.
Having some of your inventory stored in an alternative warehouse can help make sure that you have access to shipping options for your product even if something happens on Amazon. It also allows you to ensure continuity of business in case you run out on Amazon and need to get something there quickly before you get more inventory in. Storing your goods at a third party warehouse can save money on storage, while making certain your product is on hand for sale.
Tracking and Planning
Do you know how much money you are paying out for shipping and logistics services to get your products into the hands of your customers? Most of the time, Amazon lumps the shipping, storage, and logistics costs into the sales and other related costs that they charge you, making it difficult to really see how much you are paying. Being able to trace and track each shipment and the costs associated with them individually can give you knowledge of exactly what you are paying. These solid numbers can help you plan ahead for your next move, as well as the overall growth of your business.
Another consideration is over-ordering, over-shipping and then having to pay for storage and transport of all of that. This can eat up more money than you think. With the advanced technology of an alternative warehousing partner, you can always make sure that you have up to the minute data on all your inventory. It’s not only a smart move for you, but it can save you trouble and make the process that much easier overall.
Saving on Long Term Storage
It can be difficult to strike the right balance between sales and inventory. With leads times on products that can be several months, this balance may be the one thing that stands between your profit and losing money. If an Amazon seller runs out of things to sell, they obviously cannot make any money, but with the high cost of Amazon’s long term storage, many sellers are hesitant to bring in large inventories in case they don’t move fast enough and all the profit is eaten by these fees.
If there is any question, using an alternative warehousing solution or a 3PL partner can be that intermediate warehouse that you need to stay solvent and afloat. Sellers can store large inventories for a fraction of the cost of Amazon, while sending smaller shipments of that inventory to Amazon for sales made to customers. The products remain close by and in the country, cutting down on potential stockouts and lack of inventory, while saving hundreds or even thousands of dollars each year by simply costing less to store. It’s the best of both worlds for any Amazon seller.
Making it Better for You
Handling everything on your own, or solely relying on Amazon to take care of you and your business can be a problem, especially with things going on in the world as they are today. Having a good 3PL service as your partner can help you cut costs and provide you with efficiency and expertise you wouldn’t have access otherwise. It might sound like a costly addition to your overall approach, but in the end, these services will only help you get your business growing and on the path to success quickly.