Top 10 Advantages of Having a Health and Beauty 3PL

Beauty and personal care is a major $88 billion market with major competition and major buyer expectations on the wholesale and direct-to-consumer sides.

Any company in this category knows how hard it is to build a brand, attract a buyer and make a sale. To succeed up to that point and then fail in the logistics phase is a tragedy.

For this reason, a health and beauty 3PL can be a brand’s best friend by mitigating everything from runaway chargebacks to bad unboxing experiences.

Here are 10 indispensable advantages a health and beauty 3PL can bring to brands in this space.

1 - Room to Grow Inside and Out

Health and beauty products are some of the fastest growers out there. Growth can come suddenly when a social influencer gives your brand some love or a big box retailer gives your products the nod. Whether you can deliver depends on whether you’ve built the foundation to successfully scale your order filling capabilities.

3PLs fill the essential need for scalable warehouse space. Using their shared space saves you the cost of adding on to existing structures or buying new space.

A provider with category experience can store your inventory—and store it right. Temperature sensitive, fragile and expensive—many cosmetics and personal care products require an experienced touch. Furthermore, a health and beauty 3PL knows the requirements for storing and transporting items like nail polish remover (considered hazmat) or aerosol hair spray (considered a fire hazard) and has the right processes in place.

Sometimes food and drug regulations apply to health and beauty products. Experienced 3PLs ensure compliance and reduce risk to consumers by knowing the dynamics of lot code tracking and product expiration management.

Facilitating growth outside the four walls is also a must. As health and beauty brands grow and expand their sales geographically, they need to add facilities. A 3PL with a national network of distribution nodes, provides ready options.

Determining where to expand is a job for experts—and data—both of which a health and beauty 3PL can provide.

2 - A Ready Source of Labor

Finding warehouse labor in the present economy is an enormous challenge. The shortage of associates affects the personal care and health vertical more than others for two reasons. Special care is often required in fulfillment and surges in order volume are common.

Handling orders to this image-conscious market often requires a delicate touch to protect fragile items and to maintain high-end packing standards. 3PLs with their shared labor pools have experienced fulfillment workers they can shift among brands.

A surge of 20,000 orders overnight for a brand that’s used to filling 1,000 a month can be a calamity without enough staff on hand to fill the orders. Delays and dips in quality produce negative customer experiences that can set back a brand’s growth. A 3PL can help prevent that from happening.

In addition to flexible shared labor, 3PLs have conduits to temporary staff. Nearby access to sizable labor markets is a key consideration for 3PLs locating where they do. Brands can leverage a 3PL’s labor resources to handle surges in orders and avoid disruptions and late deliveries.

3 – Much-Needed Automation

Access to large skilled labor pools is not enough to ensure a 3PL can quickly scale up to fill a surge of online orders. Warehouse automation can help. Autonomous mobile robots, conveyors and labeling machines reduce labor needs during peak periods and unexpected surges in volume.

Partnering with a 3PL that has invested in automations like these does more than mitigate the risk of being short-staffed—it boosts accuracy. It also reduces labor costs—for savings that can then be passed on to brands. 3PLs that invest in automation spare brands from committing their own CapEx, too. The shared model enables access to leading edge systems—without the risks that come with expensive automation investments that can cost millions.

4 – Value-Added Services for E-tailers

3PLs rise to the occasion when value-added services are needed—which is often in the health and beauty space. 3PLs’ pickers and packers are process-driven and have controls in place that support quality.

Health and beauty brands keep tight control of their brand image and marketing right down to how their orders are filled and delivered. Often specialty packaging with inserts, tissue and stickers completes a high-value customer experience.

Within a 3PL’s shared labor model, workers with a baseline of skills can be trained to perform a variety of services ranging from special packaging to kit-making.

The addition of a free lipstick or sample moisturizer can be a huge deal when applied to 5,000 orders. The same is true with updating thousands of product labels to conform with new branding. Having a 3PL’s agile shared labor pool jump in and perform the task proficiently, finish and move onto the next thing, is an invaluable benefit in this demanding market.

5 – Value-Added Services in Wholesale

3PLs have the means for performing tasks of great importance for customers shipping to retailers. They fill a gap neither manufacturers nor retailers are able to perform effectively. Leveraging shared labor, 3PLs can pull a team from other projects to perform a host of value-added services, finish and then move onto the next task for the next client or production line.

Value-added services for wholesale buyers include kitting, creating new SKUs from existing SKUs and building pallet displays. Specialty labeling is often needed to apply UPC barcodes. Products sold online don’t need them, but for e-commerce products to be sold in stores, they need a UPC barcode added. A 3PL can do sporadic, large-scale jobs like these economically and proficiently because they have processes and skilled labor in place.

6 - Inventory and Warehouse Management Systems

Health and beauty buyers epitomize online shoppers who want purchases delivered fast, free and without trouble. The ability to satisfy today’s demand for a wide range of health and beauty products delivered in one or two days is all due to technology—often provided by 3PLs.

3PLs allow brands to leverage shared technology they can’t afford on their own. 3PLs provide IT that supports accuracy and visibility of products wherever they are in the supply chain. Leading-edge technology for managing warehouses, inventory, orders and transportation lets teams know whether products are in stock or running out, where they are stored, where they are in the order process and where they are in the delivery process.

IT impacts every aspect of logistics today. Health and beauty brands with their extensive product lines rely on 3PLs’ technology to provide outstanding customer experiences. They also rely on 3PLs’ technology for data that enables continuous improvement. Data in and data out are what help a business operate to the highest magnitudes and remove distractions.

7 – A Smooth Entry into Wholesale

Today many health and beauty brands find first success in the e-commerce space and later expand to wholesale distribution. The move brings new challenges. 3PLs can help brands shorten the learning curve and avoid costly mistakes.

In the wholesale world, brands find themselves coordinating shipments with massive retailers that sometimes allow one-hour windows in order to ship into their facility. There are requirements related to pallet configurations. New inventory requirements may include specialty labeling before inventory can be received by a retailer. There may also be lot code and serial tracking on items as well as expiration on items. 3PLs make these demands less confusing.

3PLs can help make new paperwork demands less confusing as well. Retailers require packing lists and bills of lading, which are at a detail level and require zero inaccuracies. Failing to conform to retailers’ rules and routing instructions brings chargebacks.

Routing instructions vary among retailers and 3PLs provide the advantage of understanding the routing instructions for various retailers. 3PLs often have contacts at retailers’ facilities and experience shipping health and beauty products to them. Chargebacks aren’t the only cost of mistakes; brands can undermine their standing—and bargaining power—with retailers by not meeting on-time-in-full requirements or committing a variety of other infractions.

A 3PL can help avoid that by guiding brands to retail compliance, especially in the big box retailer realm. Brands moving from smaller chains to the big box retailers have similar challenges and benefit from a 3PL’s familiarity with retailers’ routing instructions and relationships with carriers that regularly transport health and beauty products to them.

8 – A Successful Leap to E-commerce

Expanding from a successful wholesale operation into e-commerce has considerable and completely different challenges than brands encounter moving from e-commerce into the wholesale side.

A 3PL with processes and infrastructure in place can provide the quickest, most streamlined way to getting e-commerce fulfillment operations online.

Brands don’t know what they don’t know in terms of setting up processes and organizing labor, pick stations, shelf space as well as defining order profiles and establishing parcel service.

A 3PL knows what questions to ask and can model proven solutions based on other health and beauty brands’ fulfillment operations. Technology is a good example. Integrating the brand’s ERP and e-commerce platform with a 3PL’s fulfillment software is considerably easier with a 3PL that has performed integrations in the past.

9 - Cost-Saving Freight Consolidation

Typically transportation and parcel shipping (next section) are the two areas with the greatest savings potential for health and beauty brands. 3PLs are positioned to help brands optimize their operations in both these areas.

Optimizing trailer utilization is a huge area of opportunity for personal care and cosmetics brands. Consolidating brands’ less-than-truckload freight into truckloads is one way.

Retail consolidation is another. 3PLs identify “like” freight within their network so they can combine and ship them together. In other words, freight from other cosmetics brands or personal care brands.

A health and beauty 3PL provides the advantage of shipping their customers’ freight together so rates can be shared and lowered. Customers’ less-than-truckload (LTL) orders can be combined into full truckload shipments going to the same retailers.

Truckload rates are lower than LTL and the level of care and security are higher because there is less loading and unloading than there is with LTL. Theft rates tend to be lower with truckload for the same reason. This is significant with health and beauty products because they are often more expensive. Conversion to truckload also means less stops and handling which supports better retail compliance and less chargebacks.

10 - Advantages in Parcel Shipping

3PLs provide a one-stop-shop in e-commerce shipping, which benefits quality-conscious, customer-centric health and beauty brands. Orders stay within a 3PL’s control as they are picked and packed and shipping labels are applied. Parcels are handed off directly to parcel carriers and remain visible through transportation and order management systems.

Perhaps the greatest benefit of all to health and beauty shippers is the ability to leverage a 3PL’s bulk contract rate for parcel shipping. A 3PL’s order volume for all their clients garners volume discounts from national and regional parcel carriers that brands can’t achieve on their own. Contracts with multiple carriers enable brands to attain the best combination of rate and delivery speed.

Additionally, when a significant volume of parcel shipping is consolidated at a 3PL, the 3PL can spot opportunities to move packages using more favorable modes. Partnering with a 3PL avails alternative transportation strategies for consolidating parcels going to the same regions. These include zone skipping, building truckloads and leveraging less-than-truckload.

Health and Beauty 3PLs Provide a Fierce Advantage

Whether it’s by optimizing transportation or pivoting to respond to an influencer-fueled barrage of orders, having a 3PL partner that knows personal care, health and cosmetics fulfillment is a beautiful thing.

Talk to an ODW Logistics team member about what’s ahead for your brand. And be sure and keep an eye out for our next blog which will discuss what to look for in a health and beauty 3PL to ensure you have the support you need to rise to your next challenges.