Business is hard these days. Even established companies are facing difficulties in maintaining their brands and holding onto their existing client bases. Between the failing economy and so many companies flooding the market, it's not easy for people to stand out and push their products and services. However, expanding your business might not be as impossible as you think.
If you're a company looking to expand your business in Europe, you've probably found yourself exploring various 3PL (Third-Party Logistics) services that might help you in this quest. There are many companies that can offer you efficient services at affordable prices. However, before you make this decision, several factors may need to be considered.
What is 3PL and Why Does It Matter?
Before figuring out how to choose the right company for you, it's important that you first understand what 3PL is and why it's an essential tool for growing your business. A third-party logistics company is a service that allows brands to outsource things like warehousing, order-fullfilment and shipping to a team of specialised experts.
A 3PL typically handles the logistics on your behalf, which can include services relating to:
- Warehousing and storage of inventory
- Fulfilling orders (including picking, packing and shipping)
- Handling of returns
- Customs support/documentation
- VAT compliance and coordination (In some cases)
No matter which method of sales your company uses, be it ecommerce, marketplaces, retail or wholesale, acquiring the services of a 3PL is a strategic decision that will enable you to grow your business and scale your operations.
Outsourcing your fulfillment and distribution services allows you to turn focus on other things that will move your brand forward, like increasing sales, marketing and product development. Not to mention the relief of not having to battle with the stress of supply chain logistics.
Why 3PLs are Particularly Ideal When Expanding In Europe
Acquiring the right 3PL for your business is especially beneficial in Europe due to the highly complex cross-border environment. You need to remember that Europe isn't just one market; it's comprised of more than 27 different countries, each with its own set of tax systems, languages and delivery expectations.
A strong 3PL allows you to store your inventory centrally or regionally, ship locally across borders and offer your clients a local-speed delivery without having to go through the local offices.
The speed of market entry that a 3PL facilitates is also a massive contributing factor. Without it, your company would need its own warehouses, staff, contracts and compliance. However, once you partner with a 3PL, you are able to go live quickly. You'll also only need to integrate once and you can test the demand for your product before committing any capital. This reduces market entry to weeks instead of years.
How To Strategically Use 3PL To Expand In Europe
The first step should be to find the right European hub for your business. Many businesses start with one strategic fulfillment location, based on their services and goals. For example, Germany has central access and strong infrastructure, whereas Poland can offer you cost-efficient access to Central and Eastern Europe.
If you're looking for major parts and fast customs, then you might want to start in the Netherlands. Once the location has been decided, you can select a 3PL company that best appeals to your needs and vision. Some companies like Green Logistics offer you value-added logistics, which pertains to the added value of finding your hidden profits in the logistics process. Reputable 3PLs will guide you on choosing based on the locations of your customers, shipping times as well as labour and storage costs.
Using 3PL For Cross-Border Fulfillment
Modern 3PLs have the added advantage of giving you domestic-rate shipping to multiple countries, enabling you to use local carrier networks and facilitate tracked, predictable delivery acrossborders. This means you're able to sell all over Europe from day one.
European consumers expect easy local returns and a 3PL gives you that. Not only do they give you a local return address, but they also inspect and restock returned items and reduce refund friction. This is especially important for e-commerce and DTC companies.
With the strict rules that Europe has when it comes to customs declarations, product labeling and VAT registration and reporting, it can be almost impossible to get your product out there. However, a 3PL will relieve that burden from youas many of them handle customs clearance, integrate with VAT solutions and ensure all of the documentation is correct before shipping. This reduces delays, fines and rejected shipments.
A 3PL makes scaling a lot less risky. Now, you can start with los stock volumes, only expand your storage as the demand improves and add new fulfillment locaitons as sales grow. This means you're able to keep your cash flow flexible while you're scaling.
It's Really Anyone's Game Now
Expansion used to be a terrifying, cost-heavy and time-consuming endeavour that few companies had the resources or expertise to achieve, but third-party logistics companies have made that a thing of the past. With lower upfront costs, scalable infrastructure and a much less complex operational system, almost any company now has the opportunity to grow and expand throughout Europe.
