Choosing the right UK-based 3PL providers: Our top 5 considerations

James Hayes, Director of Business Development, Whistl Fulfilment

The UK is an obvious choice for U.S-based eCommerce businesses that wish to expand overseas. According to the latest research from Statista, the UK has the most advanced and profitable eCommerce market in continental Europe with a near-80% eCommerce penetration rate and rising.

This appetite for online shopping has resulted in a huge rise in warehouse growth. According to the UK’s Office for National Statistics, the number of business premises classified as transport and storage was 88% higher than in 2011, and 21% higher than in 2019. Meanwhile, a 2022 report by the United Kingdom Warehousing Association highlighted the fact that Third-Party Logistics (3PL)/transport organisations were the second-biggest occupiers of large warehouse space, accounting for over 70m square feet. It’s clear to see that the UK has a significant and mature logistics landscape, which is crucial to taking advantage of the fantastic cross-border opportunity that exists. However, doing so can require additional support on the ground. This is where a 3PL provider can accelerate your growth plans.

5 top 3PL considerations for U.S eCommerce retailers

A UK-based 3PL provider can help you effectively manage each stage of the customer journey. This includes warehousing, storage, fulfilment, shipping, returns and even customer service. However, entrusting a 3PL with your brand reputation is a big deal. Here’s a few items to consider before making your decision.

1. Flexibility
   Tailored and scalable is the name of the game. 3PL involves many moving parts, but your business might not require every line item from the outset. Ideally, your 3PL partner will grow with you and offer different services accordingly. If you’re expanding into the UK, then utilising a 3PL’s warehouse space and delivery capability makes perfect sense. But you may quickly find that you need the ability to manage parcel returns of field customer enquiries. A dedicated 3PL will recognise this and be able to offer greater flexibility to suit your unique requirements.

2. Technology and partners
   Technology and integrations play a huge role in the eCommerce ecosystem. And you’ll need to understand how your systems will integrate with your chosen 3PL provider. This will help you streamline operations and minimise manual processes that can lead to errors which impact your customers. You should also examine your 3PL’s wider partner network. Pay particular attention to useful in-house capability or partnerships they have with tax services, marketing and advertising agencies, and payment solutions providers.

3. Pricing
   Effectively managing costs is an integral part of any eCommerce businesses’ growth trajectory. But don’t be surprised if upfront pricing is not immediately available on a 3PL provider’s website. This is because 3PL and fulfilment needs differ so much it often requires a period of fact-finding and discovery before a solution can be priced accordingly. If you’re entering a process with a reputable 3PL then transparent pricing will soon become available.   

4. Current customer base
   A quick win in your evaluation is to review a 3PL’s current customer base. Are the brands you see aligned with the products or services you provide? Or has the 3PL helped a brand you know or resonate with achieve success? These can be early indicators that the 3PL is well-suited to your needs. But always remember to take a balanced view. Every 3PL is different and it’s often best to speak directly with the fulfilment partner to gauge whether you’ll be a mutually beneficial fit.

5. Value-add services
   Not all 3PLs are created equal. Some will provide basic fulfilment options while others will have the scope to offer additional services. These can include inventory management, enhanced automation, returns processing, customer service or including inserts with your orders. Dependent on what you’re selling, you may also require more bespoke facilities, such as temperature-controlled warehouses to preserve your stock. It’s also important to think about the next steps in your journey and whether your chosen 3PL will be able to meet your needs as you grow.