rebecca 
Transportation and logistics are very profitable businesses today, especially knowing that these days the whole world can be your market with the increase of international shipping options everywhere.
This is a good reason to consider funding a third-party logistics company, known as 3PL. Your clients would be other businesses that would transfer a part of their obligations, such as warehousing and shipping to you.
How can you start this type of company? We have gathered all the necessary and useful information so that you don’t have to bother. This article is here to guide you through the whole process.
Decide which type of 3PL is for you
There are 3 types of 3PL businesses:
l An asset-based 3PL business requires a warehouse, trucks, and staff
l A management-based 3PL business implies a supervisory role where you solve different logistics problems as a sort of a help desk
l An integrated provided role implies the combination of different services you might offer to your clients. This is the most complex type generally.
3PL provider services can be national or international, so make sure you have your thoughts arranged on that matter as well, although you can always go from national to international later on.
Calculate the possible fees
Starting a new company is not for free, so you should be well informed about the possible costs. A general range of costs in Australia for starting up a company is from $400 to several thousands of dollars. The type and size of the business are the two main factors that will decide the final cost.
The next thing you need is a company name, which registration costs $35 for a year and $82 for 3 years. Also, it’s required to obtain an ABN, which stands for Australian business number and it’s free of charge.
Investigate your target market
First of all, you should check the 3PL demand in your area. If you know some businesses that might need warehousing, managerial or integrated services, that’s your potential client. However, you can’t depend on one client, so make sure there is a wide demand for these services before embarking on this adventure.
The best way to find out is to do research that would gather both businesses that use and those that do not use 3PL services. Those who use can tell you the benefits of those services and those who do not can tell you why they prefer not using them. This information can be useful for you to set up your future offer to different businesses and get to know the system.
Warehousing and storage
If you want to offer this service to your clients, you will need a place for a warehouse and also some machines for scanning and automation, shelves, barcode scanning devices, and many more. This is required because it’s necessary to store everything correctly and make the fulfillment process much easier and faster.
Depending on the type of goods you´re storing, you might need other machines, such as refrigerators in case you´re storing food or beverages, forklifts for moving bulky goods, and different kinds of software such as digital shelf trackers to keep everything organized in the system or to connect to your clients.
Order shipping
After the fulfillment phase, you are supposed to ship the order to the customer. This implies being able to pick up the right order that has been stirred accurately, pack it safely and send it to the right address. The focus is on safety because you don’t want to risk the order getting damaged during shipping.
You can have partnerships with different carrier services who can do their part of the job and transport the order from your warehouse to the client.
Set an adequate price for your services
Everyone wants revenue for their work, so pricing is another very important thing to think about. The best way to know the range of prices for your services is to check the prices of the competition. Make sure to offer better services for a similar or lower price. Your prices should not be much because people always look for non-expensive options.
On the other hand, it shouldn’t be too much lower for 2 reasons. Your time, effort, and invested money deserve compensation and second, people are skeptical when they see something too cheap.
Offer additional services
Other than basic services such as warehousing and shipping, you can add return processing, inventory management, or quality control. Check what your competitors offer and make sure you stand out by offering some of the services they don´t have included. This can be a good way to offer integrated services for a great price and beat the competition from the beginning.
Now when you have all you need, you can start investigating the target market and deciding on what type of 3PL you want to do. When you’re done, you can do all the legal requirements and start investing in equipment and partnerships. It’s not easy, but it’s not complicated either and the hard work will certainly pay off with good revenue.
