Third Party Logistics | 3PL Warehouse + Logistics | 3PL Australia (original) (raw)

There comes a time in every business’s growth cycle where expansion and new system integration of cost effective solutions to maintain quality control, accurate inventory levels and high quality customer service is no longer avoidable. In order to see how Australian businesses benefit in the long term by engaging Invenco’s 3PL services, let’s take a look at some example case studies which go through the entire process from start to finish with an example business from a homegrown entrepreneur.

Let’s say that your business is called Harmony Home Décor Australia.

Growth and development phase without 3PL

Perhaps you’re an artist who has created a range of bespoke home décor pieces and you have invested countless hours of creativity and design into your range of products. When you launched your online store, you took time to develop a measured and precise marketing campaign that successfully built a steady stream of happy customers who loved everything that you created. They shared photos of your pieces in their homes across all of the major social media platforms and the exposure continued to build and grow your business.

You controlled your inventory management and logistics in-house. You ensured that every order you received was carefully and safely packed and shipped to each customer and the result was an ever-growing market of new and return customers who loved what you were creating and enjoyed your careful and attentive shipping. Given that you were personally responsible for the individual packing and shipping of each order, there was very little inaccuracy, with most orders going exactly where they were supposed to go. You were not, however, able to manage consistent shipping costs even, sometimes, when you were shipping to an area that you had shipped to previously. Some customers would express annoyance at having to pay different shipping rates between orders and you struggled to drop shipping costs because often the margins were very tight across your product range.

You kept track of your live inventory levels and you had a general idea of unfinished products and the levels of raw materials you needed to keep on hand to fulfil your orders, but you were never sure how much it cost your business to stock them.

Inventory management without 3PL services

As your customers began to grow, you began to struggle under the influx of orders. Maintaining accurate stock began to become a full-time job on its own but your overheads were too high to employ anybody else. Perhaps a seasonal rush on a new product line put you behind on a few orders and your previous and consistent 5-star rating lost a star or two because your customers were unhappy with the lead time on their orders and even more inconsistent shipping rates.

Your online store told them you had plenty of stock and you ensured a 14 day shipping term but when you finally reached their order on your queue, you found that you had actually run out of that particular design and had to send an apology email. Maybe you offered them a discount on shipping to make up for the extended lead time or you included a free gift to ensure that your online ratings and the reputation of your store was maintained. These minor overtures began to pile up and become expensive, forcing your products into tighter and tighter margins. Often the business owner’s hourly labour rate is slashed to accommodate rising operational costs and you found yourself quickly working almost for free.

Logistics management without 3PL

The bigger your business began to grow, the more difficult and more stressful hand picking and packing each order became. You weren’t able to concentrate on creating new designs and products and the feedback from your customers began to centre only around lead times and shipping experiences. They stopped posting your beautiful designs on their social media accounts and sharing their experiences of your online store with friends, family and other online customers. You were unable to update your product listing with new designs because there was no time to create them, and the designs available for sale were never accurately reflected in your stock on hand.

Business management without 3PL

Your marketing campaigns took a back seat and your online content became outdated and irrelevant. When business development opportunities came along like possible joint ventures with major retailers or social media influencers asking to highlight your product line, you didn’t have the time or resources to devote to developing those opportunities. In fact, you were already so over your capacity to fulfil your current orders that the thought of developing anything or boosting your sales was worrying. You had actually reached a point where you were actively trying to scale down sales, but your overheads kept growing because your logistics providers were haphazard and there were too many of them. You weren’t able to generate a fixed price agreement with a single supplier, so you were paying standard rates on every order.