As your business grows, the time will come when you’ll need to find someone to help you with order fulfillment, whether that means hiring someone in-house or outsourcing your warehousing and distribution to a 3rd party logistics (3PL) company.
For SMBs, choosing to outsource is often the more affordable option, but knowing what to look for in a fulfillment service is another question entirely.
Before you partner with a 3PL long term, make sure you’ve thoroughly investigated these areas:
The products they handle regularly. It might not seem like it would matter much, since boxes are boxes, but fulfillment companies actually do specialize in a variety of products.
If you’re interested in partnering with a company that typically handles products that don’t have an expiration date, for example, they may not be as careful with your supplements as another company that frequently deals with perishables. Ask about current and past clients to get a better feel for the types of products a 3PL is best at managing.
Technology and software. Of all the industries with technology on the move, logistics may be one of the most in flux today. From warehouse innovations like augmented reality tools to robotic pickers, a 3PL that has the tools to complete your orders with absolute accuracy is vital to your customer experience. In addition, inquire about their ability to integrate with your current shopping cart system. There are plenty of logistics companies that can integrate with most packages, there’s no reason you should have to upgrade modern software to work with a particular fulfillment company.
Financial viability. There’s nothing more damaging to an SMB than to find out that its 3PL has gone out of business and isn’t going to be finishing the orders that have already been sent over to be picked, packed and shipped.
An incident like this could end your business, as well as cost you plenty in merchandise that could be tied up in court for months. That’s the last thing you want, so make sure you have a good picture of your partner’s financial viability before you sign on. The length of time they’ve been in business is very telling, for one thing. After all, decades of experience as a fulfillment service typically means the company knows the industry.
Pricing and options. Obviously, it’s important to understand the pricing you get from a fulfillment partner, but when you’re trying to shop multiples it can be frustrating to try to figure out what you’re getting with each quote. Instead of letting a fulfillment service give you a package quote, ask for a detailed quote that’s broken down by service. This way you can better compare prices and also trim options if you need to skinny up the budget.
Choosing a 3PL can be a long process, but it’s better to go into this type of partnership well informed. After all, transitioning can be cumbersome if the relationship really doesn’t work out or it turns out that you didn’t sign up for the services you thought you were getting. Take your time and ask a lot of questions—the best fulfillment services will give you all the time you need to make up your mind. We’ll discuss more key features of a killer fulfillment service in part two of this two-part blog series.
