Everything is going great with your e-commerce business. Orders are coming in, customers are leaving five-star reviews, and you were recently able to find another manufacturing partner at a lower cost. But fulfillment is still an issue. You are able to keep up with demand using the small office and commercial space you lease, but you keep asking yourself: what happens when I grow bigger? How will I handle more orders? This, of course, is a good problem to have.
Before you become overwhelmed and unable to fulfill and ship orders, you should take the time to do your homework and evaluate a business partner. Start meeting and discussing options with third-party logistics (3PL) providers, which provide outsourcing services for all or part of your warehousing, distribution and fulfillment needs.
Below are several considerations when evaluating a 3PL provider. These can be your starting off point.
WAREHOUSE AND FACILITIES
The most common type of 3PL provider receives your products from the manufacturer, stores them and then ships them to your customers on your behalf. When choosing a 3PL, you want to know that they have the capacity to add your products to their existing operations. Visit the facility and see how much space is being utilized, and ask how many and what type of e-commerce companies the provider currently works with.
If you have reason to suspect that space might be an issue, ask whether the 3PL has relationships with other 3PLs or a larger warehouse network. The more warehouses in the network, not only will your products be closer to your customers but you can also have peace of mind knowing that there will be storage for the times when you experience a sales spike.
ASSEMBLY AND PACKAGING
As another consideration with the warehouse space, there should be ample space for the assembly of your products (if needed) and packaging. Remember that customer experience includes the box and packing materials. Ask about—and negotiate—packaging solutions with the 3PL to keep your costs down while still maintaining your brand.
Do you also sell in bulk, or to a retail chain? If so, you may wish to consider a 3PL that operates its own transportation network for even faster movement of goods. The 3PLs that have a transportation component might move inventory between your manufacturer and the 3PL’s warehouses, or even between you and your wholesale customers.
SHIPPING AND RECEIVING
One of the biggest challenges for most e-commerce businesses is managing the cost of shipping. You may have negotiated a discount to ship your products, but a large 3PL may have even deeper discounts and relationships in place. This is perhaps one of the most important considerations when selecting a 3PL. You also want to ask how the 3PL handles returns, and how the company factors in insurance and daily cutoff times for fulfillment. These may not seem important, but they might lengthen the delivery windows within which your customers receive your products—potentially negatively affecting your customers’ experience.
SYSTEMS AND TECHNOLOGY
You want a 3PL that stays on the cutting edge by implementing technologies related to inventory, tracking and shipping. This not only provides the speed and transparency of the data you need but it also keeps costs down, as both you and your 3PL partner can spot errors or inconsistencies that can be addressed immediately. Some systems also include predictive analytics, so you can get an idea of costs moving forward.
WHY TAYLORED SERVICES
Taylored Services is a fully integrated 3PL provider specializing in wholesale, retail and direct-to-consumer unit fulfillment. The company operates 1.5 million square feet of warehouse and distribution space within close proximity to the Gateway Ports of Los Angeles / Long Beach and Newark, NJ.
E-commerce businesses need a partner with significant investments in systems and technology and established, long-term relationships with other interim suppliers along a box’s “shipping journey.” By using Taylored, clients can track their merchandise at every step through and from the warehouse to multiple points of destination.
Warehousing & distribution
Supply chain management
Value-added services and merchandise rework
Transportation management services
Working with a full-service, integrated logistics provider like Taylored Services not only helps e-commerce businesses of all sizes to service customers more efficiently but also allows such businesses to scale when needed without significant investment.
Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as e-commerce, security, mobility, eCommerce and IoT.