Pricing that is Developed Specific to your Business and your Needs.
It’s funny how many companies when seeking an outsourced solution just want standard pricing AND they want it quick. The whole purpose of outsourcing is to create opportunities for cost savings, logistics efficiency and competitive advantage. Yet, when you ask for standard, off the shelf pricing, that may not put you in a position for success.
One of the great benefits to a 3PL environment is that 3PL’s customize pricing to your specific business profile. You aren’t paying for services that you aren’t using but you are ensuring that your true costs are reflected in the activity that your business generates.
There are 2 general areas of pricing for a 3PL: HANDLING and STORAGE. Handling costs include all labor and equipment that is used by labor. These are generally variable costs that are impacted by volume and activity. Storage costs, which usually reflect more of a fixed cost scenario, reflect rent and other static costs that are required.
When you provide business characteristics of activity and volumes, a 3PL can develop pricing that manages that profile. Labor, equipment, and space requirements will all be identified and reviewed with you. Once the profile is an accurate depiction of your business, the profile will be translated into pricing that is specific to your business. This benefit not only ensures that your pricing is accurate but also reflects your business. Understanding true logistics cost to your product can bring you a competitive advantage in product going to market.
So, when a 3PL requests that you fill out a form that will represent your business characteristics – make sure you take the time to do it thoroughly with the information you have. The more data that is available for your pricing will save you time in the future reviewing with your 3PL when they want to talk to pricing issues. When the pricing that was developed doesn’t represent the business, discussions will occur! Having accurate pricing to understand fully your true costs will help in understanding your supply chain better.
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