Many times, companies ask us for a 3PL referral that is physically close to them – in the same area or even the same city. We understand the appeal to this train of thought – namely that you’ll easily be able to travel to the 3PL to check on your inventory or drop by in the case that the 3PL drops the ball. While this may be a solid option, there may be other more financially appealing options. Keep in mind that there are some really fantastic companies out there outside of your local location that you can count on to do a great job. Also, take a look at some of the potential pitfalls of locating your warehouse next to your office.
First and foremost, finding a 3PL company right down the street doesn’t necessarily mean that they’re going to be the best fit for your business. There are so many other factors that mean a great deal when considering who to choose to perform your outsourced warehousing and distribution. Other things could have a big impact such as the specialty of the fulfillment company and their pricing. For example, if your product is apparel, there are some high quality companies that specialize in apparel. If there aren’t any in your local region and therefore you don’t consider them, you may be overlooking a solid option that would perform at a much higher level than the local options.
Second, a huge indicator of costs involved in any 3PL project is shipping. If you choose a fulfillment company right by your company, it may or may not be the best decision to lower your overall shipping costs. Two factors come into play when making this determination – where your product is manufactured and where your customers are. For example, if your product is produced in Vietnam and most of your customers are on the East Coast, then it would make sense to locate a company in or near a major port on the East Coast. And for many companies that ship to customers all across the US, finding a fulfillment company that is centrally located may be the best option, despite their local headquarters.
This is no easy decision to make, but we hope that you see the value to looking outside of your local area. It may prove to be one of the most important financial decisions you make regarding your 3PL selection.