While most eCommerce businesses start out fulfilling orders in-house, the goal is often to grow sales as much as possible. As your brand flourishes and sales volume increases, you may reach the point where in-house fulfillment is no longer a sustainable option. At that point, selecting the right fulfillment center becomes vital for your brand’s continued growth.
Choosing a fulfillment center is similar to selecting a business partner: the right partner will complement your strengths and allow your business to scale with ease. So how do you choose the right fulfillment center? You’ve come to the right place. We’re talking all about what to look for in a 3PL — and what to look out for in a third-party logistics (3PL) partner.
First, take a good look at your business to determine your strengths, weaknesses, and areas that need improvement. Then consider the questions outlined below as you research the right 3PL partner for you and your brand.
- What geographic locations does the 3PL have?
- What do the 3PL’s clients have to say about their service?
- How many years of experience does the 3PL have?
- How scalable and flexible are their 3PL services?
- Is the 3PL’s technology modern and up-to-date?
- What are all the services the 3PL can offer your business?
- What are the 3PL’s Terms of Service?
What geographic locations does the 3PL have?
Find out what locations the 3PL has available for you to ship from, and ask if they have plans to add more locations. Having multiple warehouse locations available to you can reduce your shipping costs and improve delivery time for your customers. If your business is expanding internationally, ask whether the fulfillment center has warehouses in other countries.
Before you make your final decision, take a look at the physical location of the 3PL warehouse, if possible. Some warehouses are positioned close to the interstate to allow delivery trucks easy access. Others may have less-than-ideal locations, such as in the heart of large cities, which can decrease shipping speed.
What do the 3PL’s clients have to say about their service?
Online reviews can give you a good idea of the quality of a fulfillment center, but there’s nothing like speaking to current and former clients directly. A simple email or quick phone call can give you a better perspective and answer any lingering questions you have. Make sure to ask your contact at the 3PL fulfillment center to provide a couple of client references. They should be delighted to share the names of their best customers.
How many years of experience does the 3PL have?
While experience in fulfillment is critically important, some companies that have been around longer may have difficulty keeping up with changes in demand and technology. Ask a few questions about their systems and workflows that you already know the answers to. This will give you an idea of how knowledgeable the 3PL is about current fulfillment practices.
New fulfillment companies may have the energy and enthusiasm of a young startup, but they don’t always have the experience to handle difficult or unusual situations. Pose a few challenging scenarios unique to your business so you can make sure that they have the ability to creatively solve problems while meeting your expectations.
How scalable and flexible are their 3PL services?
The 3PL fulfillment center that you choose must have the ability to grow alongside your eCommerce business. As your sales volume increases, you’ll need additional inventory storage space in their fulfillment center. Can they handle that on short notice?
You may also need additional fulfillment services over time, such as counting inventory, repackaging products, quality control, bagging products, kitting, labeling, or other special projects. Make sure the 3PL you choose has the ability – and willingness – to accommodate your needs.
Share your long-term business goals, and ask whether they would be able to keep up with demand. If you partner with a fulfillment center that cannot accommodate what you need a few months or years down the line, you’ll incur additional costs as you move to another 3PL.
Is the 3PL’s technology modern and up-to-date?
Not all 3PLs are created equal. Make sure you choose a third-party logistics company that prioritizes state-of-the-art technology and data-driven fulfillment. The best 3PLs can integrate directly with your current shopping cart, which will save a lot of time when you’re onboarding with their systems.
If the 3PL does not support your current systems, you will have to either:
- Change the systems you’re utilizing – which can be time-intensive and complicated;
- Have the 3PL add the ability to integrate with your systems – which they may or may not be able to do; or
- Choose another fulfillment center.
Ask them to show you what technology they currently use and have them demonstrate how it works. They should be able to easily walk you through their processes and answer your questions along the way. You can also ask to do a test with your current shopping cart, which will allow you to ensure the system is seamless, efficient, and free of errors.
What are all the services the 3PL can offer your business?
The right 3PL fulfillment center should have the services your business needs now, as well as the services your business is likely to need in the future. The services they can (and can’t) offer will impact your long-term business growth and scalability. So make sure to be upfront about your needs and expectations.
Here are some services you might want your fulfillment center to offer:
- Dedicated customer support to assist you and your team
- Advanced reporting and analysis
- Custom packaging and custom packing procedures
- Kitting and assembly
- Delivery Duty Paid (DDP)
- Same-day shipping
- Quality control
- Repackaging products
- Amazon FBA prep services
- Subscription box fulfillment
- Shipping address verification
- Crowdfunding fulfillment
- Bulk processing
- Fragile item preparation
- Seller Fulfilled Prime
- Returns processing
- EDI compliance
- Consolidation and breaking bulk
- Disposal or donation of inventory
- Intelligent, automated warehouse storage
- Special projects accommodation
- Photo documentation
Ask about their services, how they operate, and their process for adding or upgrading services as needed so you can decide if you want certain services now or later. Getting clarity now will ensure you’ve properly set expectations for your team and theirs, reducing the chance of dissatisfaction later.
What are the 3PL’s Terms of Service?
When you have narrowed down your options for 3PL fulfillment centers, it’s time to discuss their terms of service. The top 3PLs should have terms that are clear, transparent, and easy to understand. Ask plenty of questions as you review their contract and policies in detail. If you are still unsure about anything, contact a legal professional for advice.
A great fulfillment center should be eager to clarify their terms of service or anything you’re unclear on. They should want to build a strong business relationship with you as well as a firm understanding from the beginning, as this will set the tone for your future business dealings with their company.
Choosing the Right 3PL for Your Business
After you evaluate your business goals, determine your needs, complete your research, and explore your 3PL options, then it’s time to choose the fulfillment center that’s right for you! Do an in-depth review of your top contenders and list out any follow-up questions before you seal the deal.
Once you’ve chosen the ideal fulfillment center, take a moment to celebrate! Next, set up an initial, small test shipment before transferring all of your product to their warehouse. This will let you see their real-time service and systems in action so you can correct errors before making a full transfer of your inventory.
Ultimately, the purpose of a fulfillment center is to make your life easier by handling many of the moving pieces of inventory management, shipping, and customer service. By choosing the right 3PL, you’ll give your business the room to grow with a trusted partner who meets your needs and has the answers to all your shipping and fulfillment questions.