Can Your 3PL Partner Handle B2B and B2C Segments?

There are many things you need to consider when contracting with a 3PL: price, speed, capacity, technology, etc... 

But one of the most important considerations, and typically the most overlooked, is whether your 3PL partner is able to help you grow your business.

This especially becomes an issue if and when your business is ready to expand into new segments. Most 3PLs are either B2B-focused or B2C-focused, and crossing between the two is difficult. What works in one area does not necessarily work in the other. But your 3PL partner must be able to navigate the B2B and B2C spaces effectively if they are to help you grow your business in new areas.

The Diverse Worlds of B2B and B2C

Many 3PLs start life as large public warehouses that get into the wider logistics game. Public warehouses have historically been “pallet-in, pallet-out” operations. These types of outfits are used to a B2B world, but often have trouble with each-picks — something in high demand for B2C companies. On the other hand, companies that specialize in each-picks for the B2C world often don’t have the EDI systems needed for B2B retailing and wholesaling.

eCommerce and eFulfillment further complicate matters. These usually lead to more small orders and increased each-picks. Having the ability to fulfill priority orders and allocate inventory to specific sales channels becomes a competitive differentiator.

The result: most 3PLs simply don’t have the complexity to scale and grow with you as your business changes. That means a built-in switch-over to another 3PL at a future date, and all the headache that comes with the change. 

Selecting a 3PL Partner To Scale With Your Business

It is a much better idea to carefully select a 3PL partner not just based upon what you need today, but what you may need tomorrow. There is no reason to settle for being the “guinea pig” that enables a 3PL to learn new things at your expense.

Here are three companies we have assisted in growing their business in multiple segments:

Antennas Direct 

Antennas Direct started out as an eCommerce company that filled a unique niche. They grew rapidly, with a lot of their growth coming from both direct-to-consumer sales online and retail outlets carrying their product. Their logistics company was not able to meet the increased demand, so they had to switch providers. The transition was smooth, and Antennas Direct quickly felt like part of the Materialogic family.

Extend Nutrition

Extend Nutrition is in the specialty foods category, with nutrition bars, shakes and crunchy snacks distributed to both the direct-ship consumer and retail channels. This business model requires comprehensive fulfillment services. Their former logistics company was able to accommodate the direct-to-consumer business; however, it was unable to provide EDI integration and adhere to stringent shipping requirements typically required in the retail channel. Switching logistics providers has allowed Extend Nutrition to streamline processes and expand distribution.

Lintbells

Lintbells, operating through both B2B and B2C channels, faced challenges with their US-based 3PL provider, which was overly focused on their direct-to-consumer operations, leading to poor communication and delayed shipments. Seeking a partner that offered a balance of structure and flexibility, they switched to Materialogic. They quickly saw results, with the partnership reducing their annual costs by 10% and significantly improving service levels, providing the peace of mind they needed to grow their business.

Does Your 3PL Fail To Scale?

So how can you tell that your 3PL is failing to scale? The issue is complex, but here are a few tell-tale signs:

1. Receiving product is continuously late or incorrect
2. Increase in the number of delayed or incorrect orders when quantity and/or SKU counts get higher
3. Lacking the ability to allocate products to certain sales channels to mitigate out-of-stocks
4. Chargebacks are being incurred, pointing to a lack of proper handling
5. Routing issues are not well understood and become a bottleneck for opening new retailers

Any one of these, or a combination of them all, might be a sign that it is time to look for a 3PL with both B2B and B2C experience.

Grow Your Business Into New Segments

At Materialogic, our experience and size allow us to scale to meet virtually any size need. Looking for a 3PL partner that can help your company grow in B2B and B2C channels without sacrificing quality? Reach out to our team today.