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Small Business Logistics | XL Logistics Blog

How Small Businesses Can Expand by Using Third-Party Logistics

Posted on 19. Aug, 2013 by in 3pl

If you own a small business, competing with larger, more established competitors can be a nearly impossible task.  Small businesses typically do not have the large amounts of capital required to support a large volume of orders on a nationwide or international scale.  To do so requires a complex logistics system.  A logistics or chain of supply system involves a network of warehouses, packing and shipping facilities, and a staff of employees to run the system.  Small business help in the form of using third-party logistics companies (3PLs) is one way small businesses can expand without spending a lot of capital on a logistics system.

Third-party logistic companies are contractors that small- and medium-sized businesses can hire to handle the logistics of moving product from manufacturing to the consumer.  The cost of contracting 3PLs is considered a business expense.  Because 3PLs work with large volumes of products from many businesses, they benefit from lower transportation costs, and can pass the savings to the small businesses.  Additionally, 3PLs usually have a network of warehouses throughout the country or world, reducing the amount of time to ship products to customers.  Some 3PLs can even kit and package products in their local warehouses for the client.

Because 3PLs are contractors, small businesses do not have to worry about having to scale up or down when there is volatility in the market.  Also, small businesses can expand to new markets using the facilities and knowledge of a local 3PL.  It is obvious that outsourcing to 3PLs makes expansion much cheaper and faster for small businesses.  Third-party logistics provides small business help just when needed and is the best way to expand with very little risk.

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