The Top 5 Advantages of Opting for Multi-User 3PL Warehousing
The global supply chain is currently uncertain. Due to this, many businesses that require warehousing solutions consider 3PL or multi-client warehousing options. Multi-user 3PL warehousing involves outsourcing warehouse management operations to a firm that hosts multiple clients and provides extra-value services, including bulk packaging, cross docking, kitting, order consolidation, and reverse logistics.
Generally, these services can be costly in terms of administration and personnel. Because of this, going for multi-client 3PL warehousing is more cost-effective. That's a must-have service if your company experiences seasonal peaks. So, what are the advantages of choosing multi-user 3PL warehousing?
Minimized Financial Exposure
Financial risk is a critical component of any business planning process. Businesses that rely on warehouse rentals or run their warehousing operations, including staffing, equipment, and technology, boast higher variable center cost sets in these areas.
A primary benefit of utilizing multi-client space is that personnel costs, among others, are all built and incorporated into overall space utilization costs. That means your business can plan more effectively with more predictable costs.
Predicting demand can be challenging, leading to a poor organization in growing businesses like SMEs. Here is where multi-client 3PL comes in, with numerous advantages. As your business grows, you might experience inconsistencies in orders and activities. You might not have adequate data to chart seasonal or vital peaks and troughs.
However, scaling operations is simplified when you work with a reputable logistics service provider. The provider adds more productivity and space to assist your business in achieving its targets.
Higher Business Expertise
When it comes to start-ups and SMEs, an apparent challenge to profitability and growth is often a lack of expertise in the company. Another bottleneck might be the company's inability to hire professional expertise since its turnover doesn't yet support additional labor or experienced staff. Ideally, a lack of expertise can cause stunted or inhibited growth in a business.
However, a reputable 3PL partner utilizes in-house expertise to run vital services like order processing, customer service, and packaging. They're also highly skilled in maximizing storage spaces, including pallet storage and upgrading racking, plus understanding when to implement the best technology for improved growth. Obtaining such expertise might be daunting, especially in cases where you only need it for a short period. That's especially true until your business grows to maturity to manage its internal capacity. Liaising with a 3PL provider offers on-hand expertise at a small cost while allowing you to dispense with extra support when no longer required.
Indeed, there's a wealth of evidence proving that multi-user warehousing is advantageous regarding contract flexibility. Whether you need a year-to-year or want to switch to a month-to-month contract basis, you have all the options at your disposal. Since 3PL partners typically lease or own the storage facilities, infrastructure, and systems, you have the option of opting into or out of warehousing services or additional space.
Broader Access to On-Site Services
When you run your warehouse, you rarely gain access to in-house expertise for trivial services like cleaning. However, you might need essential services like plant or equipment maintenance or ensuring the contract requirements are adhered to. For this reason, most businesses choose to outsource these activities, an effective approach that might be costly.
Conversely, if there are several users in a multi-user 3PL facility, their combined demand might be sufficient to get such services built into the 3PL package. Additionally, the 3PL provider can negotiate a better deal for their clients than dealing with a single client's unique needs.
If you need to obtain ownership or long-term warehouse leasing solutions, contact us today. We're the leading 3rd-Party Logistics Provider in the industry.