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How To Evaluate A 3PL Or Fulfillment Service

Business is booming and it’s high time you partner up with a really good 3rd party logistics company (3PL) or fulfillment house.

You have lots of orders and plenty of customers to keep one busy, but just how do you go about evaluating a 3PL to determine if they’re a good fit for your business? It’s not as difficult as it may seem.

Three Big Factors to Consider in a 3PL

Of course you want a fulfillment center that’s centrally located so packages arrive swiftly, but that’s not all there is to choosing a 3rd party logistics company.

Give these three concepts some serious weight when you’re making your final 3PL decision:

  • Now, costs aren’t everything, you can sometimes get a lot of value with a small increase in price, but they are worth noting. Most fulfillment companies and 3PLs charge four primary fees: receiving fees, inventory storage fees, pick and pack fees and shipping fees.When you put these charges head to head across providers, it’s important to note that there’s no uniform way for 3PLs to charge. You want to be sure you’re comparing apples to apples when it comes to the volume or number of items involved. For example, storage fees might be assessed by pallet, ½ pallet, bin, cubed-foot and so on.
  • Every 3PL or fulfillment service has certain specialties it’s equipped to excel at. Some may be really good at keeping stock that expires rotated to minimize loss, others might be awesome at getting packages out the door the same day.It’s important to ask about specialties, especially if you’re planning to expand into other areas. Sure, you might only sell bicycle parts today, but down the road you might want to start carrying sportswear, which could require a whole different set of skills.
  • Many 3rd party logistics companies have specific requirements for the companies that they work with. These are meant to ensure that your products or business model is compatible with the warehouse’s capabilities, so there may be minimums or maximums in place on things like order numbers or SKUs. You’ll want to make sure that your future 3PL can handle the number of products that you are already selling, as well as what you intend to sell in the future.

Choosing a 3PL or fulfillment service should be a serious decision that you make carefully. After all, this is a company that will essentially become a business partner. Not only will your choice 3rd party logistics company handle the distribution of your products, they may also be the front line for your returns.

October 19, 2017
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