The 2022 State of the Third-Party Logistics Industry Report cited two figures: 1) there are over 20,000 3PL businesses in the United States alone, and 2) globally, the market cap for third party logistics is expected to eclipse $1.1T over the next six years. With such a booming industry and increased market efficiencies, differentiation and sales generation become increasingly difficult.

If you’re looking to revamp your sales strategy or break into a new vertical, below are four steps you can take to give your sales team the best chance of success.

Step 1) Run your financials.

What’s a no-brainer for some, is often glanced over by others in pursuit of getting business in the door. The first step in creating an effective sales process is to determine your unit economics. Without and understanding of your costs and margins, your sales team won’t have the guardrails in place to determine a pricing plan for prospective clients.

Running an asset-based, third-party logistics (3PL) business is far different than running any other “agency” business given the asset heavy nature of running a 3PL. Bearing that in mind, that means there is far less wiggle room when it comes to margin discipline when pricing out deals.

Considering line items such as: price per square foot, equipment, utilities, payroll, and insurance ensures that you’re not giving a customer a sweet deal, or worse yet – a deal where you’re losing money.

Step 2) Choose your vertical.

If you are newer to third-party logistics or expanding your business into a new vertical, there can be some unforeseen challenges without having a full understanding of the industry you’re looking to serve. Choosing one or two verticals will allow you to determine a more refined value proposition, providing a more focused approach for your sales team. For instance, there are far different value propositions for B2B fulfillment vs. B2C fulfillment. The same goes for DTC (Direct to Consumer) vs. Amazon FBA, ecommerce vs. retail, small parcel vs. freight, etc. Choosing your vertical is also crucial in generating a more qualified leads list for your sales team off the bat.

While there are certainly logistical differences between verticals, perhaps more importantly are the technological and financial differences in verticals. Understand what is expected of you and your team from each of those perspectives.

If you are looking to service ecommerce brands, be sure that you are familiar with “shopping carts” (Shopify, WooCommerce, Magento) and reverse logistics. If you are looking to service FBA clients, become familiar with Amazon’s routing guides, Seller Central, and Prime-determined SLAs. If you are looking to service B2B clients, be sure that you are familiar with EDI connectivity, retailer routing guides, Free On Board (FOB) vs. Shipper provided freight. If you are servicing consumer packaged goods (CPG) brands, be sure to understand FDA/USDA/EPA facility requirements.

Step 3) Determine your value proposition.

No one can be everything to everyone. Think about variables such as: location, industries/verticals served, Value Added Services (VAS), freight/small parcel costs, automation, business intelligence, strategy, planning--anything really. Determine what makes your operation a unique force multiplier to your prospects and lean into it 100%. You’ll find through refinement that not only will you speak to your prospects' needs better, but you’ll also increase efficiencies within your warehouse by serving similar operational processes.

If you are centrally located, perhaps your value proposition is transit time and serviceable zones. If you are located on a coast/near a port, perhaps your value proposition is increased turnaround and decreased drayage costs. If you are the beneficiary of exceptional small parcel rates, perhaps your value proposition is lower rates than the competition. If you have the means to service freight, kitting, buyer communications, etc., perhaps your value proposition is that prospects can pay to outsource their supply chain management to you.

The possibilities for value propositions are only limited to the imagination of the person determining it. If you have a warehouse, you can drive value in 2022.

Step 4) Refine your pitch.

The hard truth is that the outside world doesn’t view 3PLs as very “modern”. Having a scattered service offering or a weak pitch will prove that to the outside world. Think of your operation as one of hundreds or even thousands of stalls in the grand bazaar. Prospects walk past each stall, glancing at the offerings, making determinations for what they want to buy. They walk past the dated, dirty stalls, fearing that the products will also be dated and dirty. When they come to the squared away, friendly, and knowledgeable salesperson in the next stall though, they become interested. They’re intrigued by the salesperson’s knowledge of their industry and their offerings, the way he or she asks questions about what type of products the prospective buyers are looking for, the journal of customer testimonials and referrals.

Your pitch represents you and vice versa. It’s the first impression that a prospect gets and to them represents not only what you’re trying to sell, but how you’ll service them down the line. For customers, switching 3PLs is one of the more costly ventures they’ll have to go through in their lifetime. There’s inherent trepidation when choosing a 3PL. The way you present your operation will either comfort them or it will terrify them.

Want to learn more about the ways our customers have used 3PL Warehouse Manager to help drive sales? Book a demo here.

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