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Benefits of Traditional 3PL Model vs “On-demand” Warehousing

On-demand warehousing has quickly become a popular option for many retailers and other businesses. Designed to provide flexible, market-driven warehousing that can expand and contract with a business’s needs, on-demand warehousing has obvious benefits.

That being said, it is important to note that there are also many areas where a traditional 3PL-operated warehouse is the best option. The world is changing, and learning more about the benefits of a traditional 3PL model versus on-demand warehousing may be vital to your business’s future.

On-Demand vs 3PL-Operated Warehousing

There are some important differences between on-demand warehousing and the traditional use of 3PL-operated warehouses.

Benefits of On-Demand Warehousing

On-demand warehousing has grown in popularity with the rapid boom of e-commerce and provides retailers and other businesses with storage space that can expand and contract with their changing needs. This is possible with a market-based approach. On-demand warehousing allows a business to utilize unused warehouse capacity in a variety of facilities.

Disadvantages of On-Demand Warehousing

While the flexibility of on-demand warehousing is appealing for many businesses, problems can arise in this approach. For instance, on-demand warehousing has market-driven pricing, meaning if a business experiences high seasonal volume at the same time as many of its competitors, the short-term costs can be high.

Additionally, on-demand warehousing requires the use of physical space at multiple facilities. That can increase the risk of error, loss, delays, and other inconsistencies. These risk factors are much lower in a traditional 3PL model.

Benefits of Third-Party Warehousing

While on-demand warehousing is the new and fresh option, there are many benefits that are keeping businesses with the traditional 3PL model. For example, relying on 3PL-operated warehousing is generally a more stable option, which can yield fewer unexpected fluctuations in cost.

Stability is one of the major selling points of third-party logistics options. By developing long-term relationships, businesses are less likely to feel pressured to scramble for vital warehouse space. These long-term relationships can be beneficial when it comes to renewing contracts, requesting additional space, or any number of situations businesses may face.

3PL providers like Brown West Logistics are also experienced in focusing on the needs of the customers they serve. We have the infrastructure necessary to meet the needs of multiple clients and can offer stability and long-term partnerships to instill confidence that their needs will be met, making it extremely beneficial to stick with a 3PL model for your warehouse.

Learn More about How a 3PL Service Can Help Your Business Thrive

A 3PL provider can help meet the needs of countless businesses in need of additional warehouse space. But these providers generally offer much more than supplemental warehousing. The right 3PL provider can give you a leg up on competitors in more ways than one.

By relying on a 3PL provider like Brown West Logistics, you can lower your operational costs while still enjoying long-term stability in your warehousing arrangement. Get in touch right away to learn more about how we can help.

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