How to Scale Your 3PL Business with a Custom 3PL Warehouse Management System

You can’t grow your third-party logistics business without accepting a simple truth: delivery speed matters more than even supply chain resilience and increased delivery visibility. In fact, 53% of 3PLs say their customers expect deliveries to be done within two to three days, with the same share also considering prompt delivery the key differentiator for their business.

Securing this differentiator starts with efficient 3PL software, with the warehouse management system (WMS) being perhaps the most essential. But as your third-party logistics business grows, you might soon discover that an off-the-shelf cloud-based warehouse management system can’t keep up with your business growth and evolution.

Here’s what a custom 3PL WMS is, how it can help you scale your business more effectively, and how much it could cost you to build one.

What Is a Custom 3PL Warehouse Management System?

A warehouse management system, or WMS, is a software solution for managing and optimizing warehouse operations. Those include order fulfillment, picking and packing, inventory management, and labor management.

Warehouse management software comes in two flavors:

• Off-the-shelf software (e.g., Extensiv 3PL Warehouse Manager) is ready-to-use on-premises or cloud-based WMS software that you need to purchase a subscription or perpetual license for
• Custom WMS is software developed in-house or by a logistics software development partner and tailored to your specific business requirements.

Now, what’s the difference between WMS in general and 3PL warehouse management software? Put simply, a general WMS caters to the needs of one company’s logistics operations, be it a retailer or an eCommerce business. 3PL WMS software, in turn, is designed to meet the needs of third-party logistics providers that have to fill orders for multiple corporate customers.

So, unlike a general WMS, a 3PL warehouse management system:

• Supports separate inventory, order, and shipment management for each business a 3PL provider serves
• Handles B2B billing and service level agreements (SLAs) adapted to different industries and regulatory requirements
• Enables order fulfillment from multiple sales channels

How a Custom 3PL WMS Helps Scale Your Business

Custom warehouse management systems help 3PL service providers scale supply chain and logistics operations without running into bottlenecks or causing drops in operational efficiency. Here’s how.

Functionality Tailored to Your Logistics Operations

Custom software is designed to fit your established warehouse and fulfillment processes and workflows. So, your business needs dictate the WMS functionality. You won’t have to revamp those processes to match user flows or pay for features you won’t use. You also won’t need to replace lacking features with manual work, which will cause bottlenecks as your order volumes rise.

Unlimited Integrations with Other Systems

A custom 3PL WMS can be integrated with any eCommerce platforms, carriers, or 3PL matchmaking platforms via readily available or custom APIs. As you expand the scope of your logistics services by expanding offerings, target audience, or geographical location, you can implement new integrations to support those, as well.

Streamlined Processes with Custom Automation

With a custom 3PL WMS, you can automate and streamline any processes and workflows, from report generation and billing to order verification and fulfillment. Seamless integration with internal systems can also eliminate manual data entry and verification, which are the typical bottlenecks for growing 3PL companies.

Long-Term Scalability & Flexibility

As a growing business, your priorities, offerings, and target audience are bound to shift and expand. Owning your custom 3PL WMS means you can modify it as needed to accommodate those shifts. Provided your 3PL WMS is built using a modular architecture, you can also easily scale it to support the increasing number of customers, orders, and locations.

Smooth Multi-Location Support for Future Expansion

A custom 3PL WMS software can support as many warehouse locations as you need from the get-go, all while leaving the door open for adding new locations later on. Unlike with off-the-shelf solutions, you won’t have to deal with license or subscription plan constraints for additional warehouse locations.

Meaningful Insights with Custom Analytics & Reporting

Data analytics can help you right-size inventory, optimize the use of warehouse space, and reveal bottlenecks in order fulfillment or fleet management in real time. Automated reporting, in turn, saves you time while improving decision-making. With a custom solution, both reporting and analytics come fully adapted to your processes, KPIs, and regulatory requirements.

Approximate Cost and Timeline for Developing a Custom 3PL WMS

Business and technical requirements can vary wildly, and so can development costs and timeline. Here are the five key factors that determine both the project duration and its budget:

• The scope and complexity of features
• The number and complexity of integrations
• Compliance and security requirements
• Data migration needs and complexity
• The number and variety of warehouse locations

Of course, your choice of the development partner will also impact development costs. The partner’s location, expertise, and engagement model are usually the most important factors here.

Based on our experience, we can give you several ballpark estimates depending on the overall complexity of your 3PL WMS:

As for development phases, here’s a rough outline of their duration:

• Discovery and planning: 2 to 4 weeks
• System architecture and UI/UX design: 4 to 8 weeks
• Development and unit testing: anywhere between 3 and 12 months
• Integration testing and quality assurance: 1 to 2 months
• Pilot launch and user acceptance testing (UAT): 1 to 2 months

If you want a more detailed cost and timeline estimate for your specific project, don’t hesitate to contact Lember’s consultants. We’ll prepare a free quote for your 3PL WMS based on its required functionality, integrations, and compliance and security requirements.

Conclusion

Building a custom 3PL WMS may require a substantial investment, but you gain long-term flexibility and scalability that enable your growth instead of hindering it. More efficient fulfillment and logistics operations translate not just into cost savings but into more repeat business thanks to higher customer satisfaction.

Ready to lay the foundation for long-term business growth with a custom 3PL WMS? Lember builds straightforward software solutions that address real needs and remain scalable and flexible in the long run. Get in touch with us to discuss how our transportation and logistics experience can benefit your long-term growth.