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Why Use A 3PL Public Warehouse? Entering New Markets

As we continue our exploration of the many reasons why a 3PL Public Warehouse can be a value-added resource for your business, let’s turn our attention to how a 3PL can help you in Enter Into New Markets.

Recently, I was involved with a company where the location of their production facility was a considerable distance from an important customer.  They were struggling with rising freight costs as well as long lead times on deliveries.  Let’s call the producing company “Blue Paper Company” and the customer “Tiger Inc.”   Tiger Inc. simply wouldn’t pay a higher price for the commodity.  Blue Paper sought the assistance of a 3PL Public Warehouse local to Tiger Inc.  The Warehouse was able to secure a more favorable freight rate by utilizing existing relationships, as well as store a supply of the commodity local to Tiger Inc., which reduced the lead times on deliveries.

While both Blue Paper and Tiger Inc. were able to continue their win-win relationship, this also led Blue Paper to new customers.  They were now utilizing a trusted 3PL Public Warehouse in a new part of the country, and therefore were able to secure additional business in that area.  At last count, two additional customers have been signed on, with four more in the mix!

Think about this, entering a new market does not have to mean sending a huge amount of inventory into a 3PL Public Warehouse.  Most 3PLs will accept single truckload or even LTL shipments, making them an ideal partner to test products in a new market or channel.  Remember, in most cases you only pay for the services that you use in a 3PL Public Warehouse, and only for the time frame that you use them.

A 3PL Public Warehouse is a cost-effective tool to enter a new market while also mitigating risk.  Building or leasing a building is both expensive and time consuming.  A great deal of resources are spent just on acquiring the walls, let alone the infrastructure costs required in furnishing offices,  purchasing equipment, insuring and securing  the location and hiring staff!  All of this takes time and money away from what is really important…Continuing to expand your business