3PL vs In-House Fulfillment

Choosing to partner with a 3PL provider or to invest in having your own warehouse is a decision that requires a lot of thought. There are advantages in both decisions, so what you ultimately have to determine is which choice is right for you and your business. Breaking down each method of fulfillment is a great way to start. Assessing the costs and hours of each option will inform you of what your business is capable of through logistics and where you need to improve.

Pros and Cons of 3PL and In-House Fulfillment

As your business grows, your logistics strategy will have to change to keep pace with your customers’ demands. You will start weighing your options out and in-house fulfillment sounds ideal and gives you control but there will be a learning curve because this isn’t necessarily charted territory. Finding a 3PL provider is an ideal choice as well because they have the networks and equipment to fulfill your logistics needs. The best approach is to break down the pros and cons of each to see what option will be most beneficial to your business.

Pros of In-House Fulfillment:

Control--You will have total control over your inventory and how your warehouse operates. Storing, picking, packing, and shipping are dictated by you.
Unique Products--If you have products or goods that are shipped with distinct packaging or if you offer a wide range of customization on your products, keeping your operations in-house will work best for your business.
Issues/Problems--Issues and problems are inevitable. However, when issues occur in-house, finding a resolution is much easier and quicker.
Changes--Making adjustments or changes is easier and faster.
Client Relations--These are easier to maintain with in-house fulfillment.
Communication--There are fewer contacts you have to communicate with when you choose in-house fulfillment and you don’t have to worry about communication troubles that may occur with a 3PL provider.

Pros of 3PL Providers:

Technology--3PL providers have the latest technology to help optimize your logistics process.
Savings--Paying additional employees can exceed the cost of a proven 3PL provider. Their overhead costs are typically lower.
Rates--Have the most up to date information on industry rates and can offer a variety of rates for you to compare.
Prepared--They already possess the know-how and have the experience to provide results-driven resources and tactics.
Established--Removes the need for planning future infrastructure and the associated costs with operating and expanding your own fulfillment operations. They have the partnerships and volume needed to get your goods where they need to go.
Equipment--3PL providers already have the needed equipment to efficiently transport and store your products or goods.
Locations--Most 3PLs will have an established network to optimize shipping times and to ensure your goods can get where they need to go, nationwide and internationally.

Both options offer an abundance of pros, so it is up to you to determine the best plan of action for your expanding business.

Why Use FreightCost?

At FreightCost, we have over 40 years of experience helping businesses get their products or goods to where they need to go by evaluating their supply chain management and coming up with options for improvement. We have relationships with 3PL providers that have the tools and knowledge to improve your logistics. We also know what it will take for your business to add in-house fulfillment and to implement it successfully. If you are interested in a 3PL provider or if you are looking to expand your in-house operations, call us today at (888) FRT-COST.