This is part one in a two-part series. You can read part two here.
Opening a start-up can be one of the most exciting times in the life of a business owner, but it can also be fraught with peril. Not only do you have to make the right decisions without knowing the direction your business may ultimately take, but you often have to make them very quickly – especially if your product or service explodes in popularity at your launch.
Instead of being caught without a safety net, it’s a good idea to go ahead and establish a relationship with a fulfillment services or 3rd party logistics company (3PL) to simplify your order fulfillment over the long term.
Of course, there’s no 3PL that’s perfect for every business, so before you sign on the dotted line make sure to ask these questions:
Do you handle products like mine? One of the very first questions you should ask any 3PL is if they handle products like yours, especially if your items require special handling. For example, a company that sells cosmetics needs a 3PL that practices excellent stock rotation to help minimize loss from product expiration. Other items like breakables or liquids also need careful attention from experienced 3PLs.
What’s your pick, pack and ship process like? Any 3PL worth its salt will have a well-designed pick, pack and ship process already in place. If your potential 3PL can’t explain its process clearly and in a way that makes you understand how it works, it may not know itself all that well. All that chaos can lead to lost packages and slow order fulfillment.
How do you handle inventory management? 3PLs deal with inventory management in several different ways, but the best utilize bar code scanning to count and recount each item as it passes through the system. Items should be checked in with a bar code scanner and scanned every time a person touches them for the most accurate count possible.
Are you equipped to handle seasonal peaks? Some warehouses are more flexible than others, so you should ask ahead of time about warehousing capacities before you partner with a 3PL. Seasonal peaks are normal for many types of eCommerce businesses, make sure you’ll have some place to stash your holiday or other peak sales time inventory well before you need it.
What other services do you offer? Most 3PLs offer a variety of services beyond order fulfillment. Many will accept your inventory at the warehouse, handle every step of the distribution process, provide you with a customer service team for customer order handling, deal with returns and even help with catalog and other literature fulfillment if you only ask.
Your startup isn’t going to be like any other startup that’s been opened in the past, so you absolutely can’t settle for the same 3PL package as everyone else. A 3PL that will work with you to provide the services you need, nothing more and nothing less, is a 3PL that’s a keeper in the long run. But these questions are just the beginning, we have five more waiting for you in part two of this two-part blog series.
