Details, flexibility, and speed are three qualities that can affect how your product is perceived and received by customers. How products are packaged, labeled, and bundled and how quickly they reach store shelves shape the customer experience. That’s where value-added services can make a difference for CPG and retail brands.
What Are Value-Added Services?
Value-added services are specialized offerings provided by third-party logistics (3PL) companies to their clients. These solutions are beyond the typical services offered by 3PL’s, such as warehousing and distribution. Value-added services enable 3PL partners to serve as extensions of their clients’ brands. Not all 3PL’s offer value-added services, and the type and range of services can vary among providers. Examples of value-added services provided for CPG and retail businesses include the following:
- Kitting – Grouping multiple SKU’s together into a single unit (kit), such as for do-it-yourself sets, special bundles, or subscription boxes
- Light Assembly – Using hands or hand tools to put together prefabricated materials or small parts
- Custom Packaging – Packing product into brand packaging, gift-wrapping, or adding inserts to promote the brand and/or enhance the customer experience
- Re-Packing – Taking raw ingredients or product from one form of packaging and securing it into different packaging, such as taking bulk product and re-packaging it in smaller containers for individual resale
- Re-Labeling – Removing and replacing labels with different ones such as for regulatory, sales promotions, or branding purposes
- Lot Control – Grouping, storing, and tracking products by their lot numbers, which helps to easily identify expired, recalled, or defective batches
- Returns Management (Reverse Logistics) – Handling customer returns
Benefits of Value-Added Services
- Reduced Costs – You will not have to purchase or rent extraneous materials or equipment or hire specialized labor to handle these services. Additionally, one 3PL that can handle each value-added service eliminates the need to bring on additional vendors with their own variable costs. Therefore, value-added services can be bundled together at a lower price and you will avoid extra transportation costs to have components or product moved to different vendor facilities.
- Quicker Time to Market – The 3PL will have the labor, materials, and equipment readily available to efficiently handle each value-added service, thereby minimizing the time needed to get the product retail-ready.
- Improved Quality Control – A 3PL with a certified quality management system has shown superior ability to handle product from managing and storing inventory, to lot control, light assembly, packaging, and other value-added services.
- Scalability – The 3PL can provide the value-added services needed to handle seasonal fluctuations, including surges during peak as well as normally off-peak seasons
- Higher Levels of Customer Satisfaction – Whether your direct customers are consumers or retail partners, they will have a greater degree of satisfaction when product is available at the time they want or need it, attractively packaged, and properly labeled. When they need to return a product, they will appreciate a smooth returns process.
- Increased Revenue – Higher customer satisfaction will increase demand, drive sales, and increase your revenue. Having product packaged and labeled properly for sales promotions—and delivered on time—will make it easier for purchasing.
- Improved Brand Identity Awareness – Product re-packed into branded packaging will showcase your brand, which will increase awareness and can influence customer loyalty. Having product shipped in attractive and store-ready POP or POS displays will generate more visibility for your brand during in-person shopping experiences. Product that is re-packed into custom or lux packaging will enhance the unboxing experience and further improve brand recognition and appreciation.
Finding the Right Partner
As mentioned previously, not every 3PL offers the same value-added services (if they offer them at all). Additionally, providers will deliver varying degrees of quality. So, you will need to research to see what 3PL’s offer the services you need and have experience in providing high-quality service. Look for the following characteristics:
- ISO 9001:2015 certified quality management system (QMS)
- Flexibility and proven experience to provide a solid offering of value-added services
- Strong WMS with inventory management and lot control capabilities
- Space and scalability to handle your seasonal peaks and to grow as your business does
Learn more about ASW’s value-added services and how they can help elevate your CPG or retail company's brand.