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3PL
March 18, 2021

How to Scale Your 3PL Fulfillment Business

Running a 3PL fulfillment business comes with various challenges and roadblocks, especially when it's time to grow.

Maybe you're doubling your client base. Maybe you've only worked with clothing retailers in the past and want to expand into food and beverage distribution. Maybe you've added a third warehouse.

Whatever your situation, the reality is that scaling your operations as a 3PL fulfillment provider will bring logistical and industry-specific growing pains. You might need a new warehouse management plan, or you might need to drastically restructure your warehouse space, business processes, and safety measures.

When deciding whether you're ready to scale, start by answering these two questions about your business:

  • Do I have the flexibility (with my warehouse, employees, business plan) to work with customers in new industries?
  • Can my fulfillment systems (automated or otherwise) effectively service these new customers?

If you can't answer yes to one or both of these questions, don't throw in the towel on a successful growth plan. We've created a list of high-value action items to focus on as you begin your scaling journey or bring existing expansion projects across the finish line.Scale PCO Device

Action Item #1: Define Your Priorities

When it's time to start turning goals into an actionable plan, you may feel like you have to overhaul your business processes overnight. However, as with most things, an effective expansion takes time and effort, and it won't be a one-and-done dramatic transformation.

Prioritize the parts of your business that most significantly impact your bottom line, the ones that directly relate to customer satisfaction, success, and retention.

Your current clients and future business goals will heavily impact which tools and processes drive your growth. Be sure to consider not only where you want to go but also trends in past performance, such as common internal bottlenecks, client pain points, and potential new revenue streams you've already identified when deciding how to scale your business effectively.

 

Action Item #2: Assess Market Needs

As you start growing your 3PL business, consider the needs of the new market(s) you're moving into.

For instance, you may be interested in working with enterprises rather than the small business customers you started with. Or maybe you want to move into a new industry with unique fulfillment needs, such as a food service customer that needs refrigerated storage, tracking for expiration dates, and rigid stock rotation requirements.

No matter where you want to take your business, make sure you understand the market and can accommodate your new sales pipeline's unique needs with relevant value-added services.

If you're scaling, new customers will likely make highly specific or seemingly ridiculous requests that you can't really deny if you want to keep their business. To avoid conflict down the road, decide ahead of time if you're willing to go an extra mile (or two) to gain and retain these customers. Here are some examples to think about:

  • Are you willing to help source fulfillment supplies like packaging or even the products themselves?
  • Will you support marketing or similar external projects if a client requests it?
  • How far will you bend to create the 'perfect' solution for a customer?

This means not only considering your team's flexibility but also the capabilities of your physical warehouse space and the tools you use to track, manage, and fulfill orders.

 

Action Item #3: Automate Internal Processes

Even diligent, hardworking, and precise teams can make mistakes. As you bring in new contracts and the sheer volume of work increases rapidly, more missteps will likely slip through your manual process than before. For example, spreadsheet-style inventory and order management doesn't work very well when you need to send out 10,000 units of a product in less than a week. Put more automated systems in place to overcome an increase in human error and distribute an ever-growing workload.

You can even implement AI-powered inventory management tools that monitor orders by size or product, then use those insights to manage staffing and scheduling in your warehouse.

 

Action Item #4: Protect Customer Data

Another area where you can leverage automation software is in your client communications. When you add new lines of business to your customer base, you run the risk of unintentionally mixing or exposing data between customers. As unfortunate as they are, data breaches occur relatively often in the 3PL fulfillment world, especially when your organization relies on manual reporting and communication lines.

If your customer service team accidentally copies the wrong person on an email thread or sends the wrong attachment, your customer data is dangerously compromised. Look for ways to encrypt data, set strict viewing permissions, and double-check your client communications before they leave your inbox. For example:

  • Use a CRM that intuitively queues up email recipients by organization and notifies the sender (before the email goes out) if a proposed recipient falls outside of the designated list of addresses.
  • Implement a reporting software that allows you to set permissions at the role- or user-level, giving clients exclusive access to their business line only.
  • Set up automated reports, such as low stock reports or shipped order summaries, that send directly through your management software, eliminating the need for manual communications.

Action Item #5: Unify Your Efforts

To put the above insights into action, you need a robust warehouse management tool with advanced software tools and flexible customization options to help you serve your customers and grow your business with ease.

Like we said earlier, business transformation doesn't happen overnight. If you're not ready to dive into scaling efforts head-first, remember that you don't have to reinvent the wheel in a single, monumental step. Unify your current operations behind a customizable, scalable tool, then automate and upgrade processes at your own pace. Look for SaaS tools like Infoplus that offer a flexible out-of-the-box solution to get you up and running quickly without the need for a total overhaul.

At Infoplus, we provide 3PL fulfillment businesses with flexible, scalable software solutions that streamline internal processes, enable employee success, and keep your end-customers happy.

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You can learn more about How to Scale Your Fulfillment As You Grow, by downloading your free eBook below!

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