With so many options and setups available, choosing the right fulfilment partner is the hardest part of any 3pl journey. You need to make sure the provider can handle your needs in the manner you wish. Getting this right takes communication and time.
Table of contents:
1. What And When?
2. Your Requirements Now And In The Future.
3. Their Service
4. Can You Grow Together?
5. Additional Services
6. Comparing Fulfilment Partner Providers
7. Trust, SLA’s, And Standards
8. Making The Final Decision.
What And When?
An order fulfilment partner helps you deliver higher service to your online customers. They can provide improved customer touchpoints and meet or even exceed customer expectations.
You should be using one if you are too small to run your own warehouse or too large to handle order volume. Choosing the right time to invest in upgraded fulfilment is another critical decision. Typically sellers outsource order fulfilment as they approach thousands of orders per month.
A 3pl handles your warehouse storage, picking and packing, shipping, and returns processing.
Your Requirements Now And In The Future.
Ok so now we know what a fulfilment partner can do for us and when we should use one.
What do we specifically need from a partner?
Drilling down into your requirements before starting your 3pl search is imperative. You will get down to your final 3 much faster if providers do not meet your requirements.
Some of the not so standard needs your business may have, are.
- Oversized and pre-packed items
- Heavy items
- Kitting/ De-kitting
- Steaming & Stitching
- Bulk Orders
- Packaging inserts
- Returns management
There is no end to the potential requirements your business has but answering these questions and knowing your products before shopping around will help you ask the right questions when having a discovery call.
Things to know about your products and stores before approaching 3pl’s.
- Size and weight of your products
- Number of SKU’s you will be using
- Order volume now and future predictions
- Frequency and volume of supplier shipments
- Your current costs
Besides matching your requirements, how is their customer service? Any partner you work with should do exactly that – work with you. If pulling your teeth out is preferable to solving problems with a partner, then the benefits of said partner are not forthcoming.
You outsource business units to save time and reduce the number of headaches that present themselves. Make sure your partner will work with you when things change. This is even more important in these turbulent times we find ourselves in now.
Look for quotes from existing customers and see what they have to say, maybe reach out to one to see if you can get a response – social media is an amazing place to find real opinions.
Can You Grow Together?
So, you know what is needed from day one, but do they understand your shooting for the stars? Will they be able to support you on your journey to e-commerce dominance? Do they have the capacity to double your storage space? It is always a good idea to talk through where you want to be in 9 or 12-months’ time and ensure they can be right there with you.
Switching providers and moving stock can be expensive, it is better to go slow and get the right partner first time. You want to be the tortoise, not the hare.
We touched on it briefly during your requirements but does the 3pl partners you’re looking at offer any additional services? Services that you could potentially use in the future to benefit and grow your business. Bundling or kitting is one of those services which may not be a year-round deal for you but BFCM/Christmas period calls for deals and bargains. Everyone loves a good bundle of awesome products. Find out about how you’re potential partners help their clients capitalize on busy periods and what is moving through their network.
This is possibly the hardest part of the process. Pricing structures vary wildly. There are old school and new school trains of thought here. Old school is generally standard flat fees with extra charges should you go over, but no reduction should you stay under. On the other hand, innovative 3pl’s are moving to consumption-based pricing and passing those savings onto you. It comes down to the following question: Are you comfortable with a varying fulfilment price that is effective and efficient, or do you like to have a minimum payment with the potential for overs should your business do well?
In our opinion saving up to 40% on fulfilment cost is worth the uncertainty of variable consumption-based pricing, but at the end of the day, it’s what you feel most comfortable with.
Be wary of hidden fees, padding and mandatory minimums that can potentially carry penalties.
One notably capital-intensive action is warehouse intake. We discuss this more here. It is very important to understand the process which you are subscribing too and avoid potentially hefty penalty fees.
Trust, SLA’s & Standards
As the delivery experience is one of the few touchpoints you get with customers, be sure you can trust your chosen partner to deliver what they have said. Do they have a track record they are proud of and shout about?
Can they, for example, say they have picked and packed with 100% accuracy since their launch? Selazar can and does at every opportunity. Like just now.
Reliable, accurate service can be a staple of your brand’s growth going forward. Meeting or exceeding consumer expectations through fantastic delivery increases brand loyalty, LTV, and turns your customers into brand advocates – the most important marketing you will ever do!
Customers who receive excellent delivery service and unboxing experiences are 9% more likely to leave a 4 or 5-star review. You know, as a savvy business operator good reviews lead to more sales and thus kick starts and snowballs your growth plans.
Making The Final Decision.
So now we understand how to approach this critical decision. We also understand the importance of getting it right.
What now? Well, once you have narrowed the field, based on current requirements, next step is to review your growth plans and narrow again based on who will be the best partner not just for now but for 12 months from now too.
Then look at the technology they are using. Is it innovative or on the cutting edge of what is possible? With the rapid advancement in technology, these days choosing an outdated methodology now will ensure you get left behind in the future.
It would be considered a miss not to talk about price, but the thing that really matters is value. The cheapest service is not necessarily the right one for you. It comes down to your future – bad reputations are hard to shift, and good ones are hard to stop from growing. Starting on the right foot and scaling quickly will allow you to leverage better prices from a volume-based industry.
The right partner will be worth their weight in gold; price should be the final call on a 50/50 decision, not the starting point.
One final point of advice – look at the people you will be partnering with. At the end of the day this is a commitment which is costly to change. If you simply do not like the people at the end of the phone, then do not work with them.
So, to wrap it all up;
- Know what you need, now and in the future
- Ensure they can grow with you
- Check out their tech
- Understand the value of their pricing model and watch out for hidden fee’s.
Now you are ready to make the decision on your fulfilment partner. Go forth and conquer your inner eCommerce guru.