Third-party logistics (3PL) providers are constantly looking for ways to add value to their services and attract new customers. One way to do this is by offering value-added services that go beyond the traditional warehousing, transportation, and order fulfillment functions. In this blog post, we will explain the benefits of expanding your service offering and discuss several value-added services that your 3PL business can offer to help grow your business. We will also mention how software can help make these services more efficient and profitable for your 3PL.
The Limits of Traditional 3PL Offerings
At its core, 3PL providers offer services such as warehousing, order fulfillment, inventory management, transportation, and more. These services are essential for businesses looking to outsource their logistics and supply chain operations. By offloading these functions to a 3PL provider, distributors and manufactures can save money on labor costs and reduce the amount of time needed to manage these operational tasks.
Yet while these traditional supply chain management offerings are essential, they don’t always provide the competitive edge needed to attract new customers and grow your business. That’s why it’s important for 3PL providers to consider adding additional services that can help differentiate them from their competitors and give their customers a better experience.
Value-Added Services (VAS) for Third-Party Logistics Providers
Beyond commerce fulfillment and other traditional offerings, there are a number of Value-Added Services (VAS) that 3PL providers can offer to grow their customer base and increase their profit margins. Let’s go over several of these here.
Kitting and Assembling Products
Kitting and assembling products are a great way for third-party logistics warehouses to add value for their customers. Kitting involves packaging multiple products together for sale, while assembling involves putting the individual parts of a product together. By providing kitting and assembly services, 3PL providers can help their clients save time and money on packaging and labor costs. Kitting is often project based with shorter time frames so a 3PL can add significant value for their customer.
Reverse Logistics and Returns Management
Reverse logistics and returns processing are also important services that can help 3PL providers stand out from the competition. This involves providing customers with a return shipping label, tracking items, and helping to find replacements or issue refunds when necessary.
Reverse logistics can also include disposing of returned or recalled products that can’t be sold or recycled. You may also offer repair services. By offering these services, 3PL providers can make life easier for their clients and build customer loyalty.
Negotiating Shipping Rates
Negotiating bulk shipping rates with carriers can help 3PL providers save money and pass on those savings to their customers. By leveraging their high volume of shipments, 3PL providers can negotiate better rates from carriers, which can result in cost savings and improved profit margins for both parties. Especially if 3PLs are servicing smaller customers.
Repackaging and Rebranding
Repackaging and rebranding are services that 3PL providers can offer to differentiate themselves from their competitors. This involves taking products that are already packaged and repackaging them in a new way, as well as potentially adding custom branding to the packaging.
This can help companies stand out on store shelves and create a better customer experience. By fulfilling customers’ packaging and branding needs, logistics companies can also help their customers make changes quickly and efficiently.
Retail Preparation Services
Retail preparation includes services such as labeling, barcoding, and tagging. These services involve preparing products for retail sale by ensuring they are labeled and tagged correctly according to retailer and industry standards. By offering these services, 3PL providers can create a more streamlined process for their customers, save them time, and help avoid costly mistakes.
Managing Recurring Subscription Boxes
A growing trend in eCommerce is subscription boxes. These are recurring orders for customers that contain a variety of items and products delivered on a regular basis. By offering a service to manage these subscription boxes, 3PL providers can open up new business opportunities for their clients while creating an efficient process for handling these orders.
Postponement and Postponement Packaging
Postponement is a logistics strategy that can help 3PL providers and clients save money and reduce inventory storage costs. It involves postponing the customization of products until they are ready to be shipped out, eliminating the need for large inventories of pre-packaged items. This is a variation of kitting but a new service that is extremely valuable.
For example, camera equipment that is bundled with different accessories such as lenses, cables, memory cards, and software can be packaged on-demand when the customer places an order.
Similarly, postponement packaging is a service that 3PL providers can offer to their customers, which involves receiving inventory in bulk packaging and then repackaging the items for specific orders. This saves clients money by reducing labor and shipping costs as well as making it easier to customize orders or change the packaging.
International Trade Management and Compliance
International trade management and legal compliance are additional services that a logistics provider can offer. These involve ensuring all regulations are followed with international shipping, such as obtaining export and import licenses, understanding country customs rules, and managing the payment of tariffs or duties. By offering these value-added services, 3PL providers can help their customers comply with complex trade requirements, thereby reducing the risk of fines or penalties.
Using The Right Software to Deliver Value-Added Services to Clients
To deliver value-added services, 3PL providers must have the right software tools. For an easy-to-use integrated system, consider Cadre Technologies software. We provide a suite of warehouse software solutions that can help you optimize operations and streamline your processes. Our platform offers real-time tracking, reporting, analytics, route optimization, and more to ensure the efficient delivery of goods and services. And the ability to integrate to other best-in-class software to meet specific customer requirements is essential.
With a tool like Cadre Technologies software in place, 3PL providers can focus on delivering value-added services to their customers and growing their businesses without worrying about technical requirements.
Other Technology and Equipment Needed to Offer a Value-Added Service
Finally, 3PL providers need the right specialized equipment, technology, and machinery to offer a value-added service. Depending on the service being offered, 3PL providers may need to invest in additional software or hardware such as label printers, scanners, and automated packaging machines. Additionally, unique packing materials, specialty boxes, and other specialized packaging such as blister packaging may need to be kept in stock. These investments will enable you to offer extra services while streamlining the process.
Benefits of Offering Value-Added Services As a 3PL Company
There are many benefits to offering value-added services as a 3PL provider. Here are just a few:
- Increased Customer Satisfaction: Customers will be more likely to choose your company for their logistics needs if you offer additional services that provide added perceived value and convenience. Instead of just shipping goods for eCommerce businesses, for example, you can offer a complete package of services that meet the needs of eCommerce retailers. By offering VAS, your customers save time and hassle.
- Greater Market Share: By providing value-added services, 3PL providers can attract more customers and gain a larger market share. If customers know they can get what they need from you in one place, they’ll be more likely to choose your services.
- Improved ROI: By offering additional services, 3PL providers can increase their returns on investment and improve their bottom line. This will enable them to reinvest their profits into new technologies and equipment, helping them to remain competitive and grow for years to come.
- Improved Customer Loyalty: When customers receive value-added services, they are more likely to stay loyal and remain with the 3PL provider. If you can provide an integrated solution, you’ll enable your clients to succeed in earning money meeting consumer demands. This will in turn help to create long-term relationships that can benefit both parties.
By offering value-added services, 3PL providers can increase customer satisfaction, take on more business, and improve their bottom line. To be successful in this endeavor, 3PL providers need the right software tools and specialized equipment. Cadre Technologies provides a suite of warehouse software solutions that can help optimize operations and streamline processes and can be integrated to other products that solve specific requirements. With the right technology in place, 3PL providers can focus on delivering value-added services to stand out amongst the competition and grow their businesses. If you’d like more information on our software systems, contact us today.