Skip to main content

As your business grows and stock levels become too cumbersome to manage in-house, outsourcing makes more and more sense. But exactly how does 3PL inventory management help?

As a small to medium-sized business, you’re most likely already familiar with the in and outs of managing inventory as they pertain to you directly. That is, working with rising and falling stock levels, purchase orders, sales orders, billing, invoicing etc.

But what happens when your ability to effectively manage the intricacies of these daily operations becomes compromised due to growth factors? You may not have the same resources to run a dedicated division as larger companies do.

The Importance of 3PL Inventory Management

This is where 3PL Inventory Management fills the need as a financially efficient option that manages inventory for you. By relieving the strain of trying to fully control all aspects of inventory management of a growing company, resources are freed up which lets you concentrate more on the business of building the business.

With the help of outsourced 3PL management, your company maintains balance by identifying what products need to be ordered and when without over-investing in stock.

3PL Inventory Management Services

3PL Inventory Management Services and Benefits

As mentioned, the size and demands of your business will dictate if you need 3PL inventory management. If you have inventory sitting in a warehouse unsold because of operational issues, you have cash resources tied up that could be used to outsource and resolve the same problem, and move you forward at the same time.

A few of the more common situations for retaining 3PL services include:

  • You want to expand your company into multiple regions
  • The time and cost of in-house inventory management are excessive
  • You want to control overhead as you scale up your business
  • You want to leverage additional data for insights that make better decisions
  • You want to propel growth instead of concentrating on operations

The benefits of 3PL inventory management can be substantive and transformative for a business. By partnering with a 3PL provider who has the resources beyond your current capabilities, you gain an edge over smaller competitors and extend your business’ functionality.

Operational Scalability

Contractually speaking, most 3PL inventory management agreements are based on a pay-as-you-go business model. This makes it easier for your company to scale operations without having to invest large capital sums and suffer additional carrying charges.

These freed up resources also allow you to effectively react to seasonal demand fluctuations and get accurate billing for all transactions.

Expanded Materials Handling and Labour Capabilities

Playing a key role in being able to help you manage inventory, value added services such as packaging, labelling, co-packing and cross-docking are major benefits offered by many 3PLs. By outsourcing specific labour requirements to an experienced third party, your own labour force in effect multiples without the added burden of having to manage the employees yourself.

Real-Time Access to Stock Levels

Many third-party logistics partners offer a managed portal for monitoring the flow of their goods and stock levels in real time. With access to live data and twenty-four-seven transparency, it’s much easier to monitor stock levels and take action when they become excessive or run low.

Furthermore, inventory management software and WMS feedback can supply additional services such as generating client reports and deliver shipping notifications.

A Bigger, Better Distribution Network

Gaining a foothold in other regions or countries requires an established logistics network. This is where your 3PL partner shines through with brokerage connections and carrier relationships.

Your 3PL partner will also have access to the extra warehouse space you need, often of various types such as climate controlled, refrigerated, or even specialty storage depending on your needs.

What is a 3PL Inventory System?

A 3PL inventory system is a cost effective method of outsourcing internal competencies such as transportation, warehousing, packaging and many other services. Combined with a managed warehousing services, offloading inventory management to a third party is an effective solution when you need to make room for expansion.

3PL Inventory Management Software

To help track and trace the flow of inventory, a Warehouse Management System, or WMS software system is employed to track and manage nearly all warehouse activities.

Top 3PL Inventory Management Companies

3PL companies come in various sizes from local or specialized to regional or internationally recognized operations. Some of these major players are tightly focused on certain market sectors and include such names as:

  • ShipBob
  • FedEx
  • DHL Supply Chain
  • C.H. Robinson
  • Ryder


How do I find a good 3PL company for inventory management?

Talk to 3PL clients to get first-hand feedback. Compare a few different 3PL services and choose the better ones then determine whether a specific company suits these shipping and inventory management needs.

How much does 3PL inventory management cost?

The cost 3PL inventory management will be directly related to the specific needs of your company. Some 3PL companies offer a per-hour rate which may cost roughly $30-$70 an hour USD. Others may charge a flat rate anywhere between $70-$300 USD depending on your specific inventory management requirements.

How much 3PL space do I need?

A good 3PL will help you determine the appropriate amount of space you require now, and help plan for further space as you need it. Usually an estimate based on these metrics will be provided to you by the 3PL inventory management service then negotiated for agreement.

How to Find the Best 3PL to Help Manage Your Inventory

A better 3PL partner that is nimble enough to develop custom solutions tailored to your business. They will also have the space, staffing and equipment in place and aligned with your chosen market. Other key factors to take into account include compatibility with your organization’s technology stack, details on warehousing capabilities and locations, automation features, value-added services, pricing and vision for the future.

Of course, one of the best ways to find an ideal 3PL partner is to get first hand feedback from existing clients. As you know, qualified referrals go a long way to making better decisions.

Furthermore, look for a 3PL partner that is growing aggressively. Regardless the scarcity of prime real estate, some 3PL providers are being proactive by actively growing their operational footprint. Brimich Logistics and Packaging for instance, has recently acquired regional warehousing out of Etobicoke Ontario in order to support the growing inventory and distribution needs of its customers.