Thanks to Amazon, consumers expect anything to be delivered fast and at a low cost. You’ve worked so hard to create a line of products and offer them at a price that customers are happily willing to pay for. Your marketing is on point: reviews and referral traffic are building, and you’re able to reduce your reliance on expensive Google Shopping ads.
However, shipping continues to be a thorn in your side. You may have negotiated a great deal with a shipper, but the cost continues to eat into your profit. Further, you may fear outgrowing your current space but are afraid of moving into a larger facility should there be a slow period.
If you are experiencing any of these headaches, now is a good time to consider working with a fulfillment partner. Such partners are usually referred to as third-party logistics (3PL) providers, as they handle much more than just shipping. You can outsource some or all of your operations to a 3PL.
Let’s have a closer look at some questions you might ask when evaluating a potential partner.
WHAT KINDS OF PRODUCTS DOES THE 3PL SPECIALIZE IN?
Not all 3PLs are created equal. Some specialize in heavy, bulky industrial machinery while others focus on lightweight, fragile products (think glass bottles or electronics). It’s important to know that the 3PL has experience in handling your product, so as to know which types of packing material to use and also how to handle the product properly so as to avoid loss or damage.
CAN A 3PL MEET MY CAPACITY?
The main competency of a 3PL is its facilities — where the company will receive your products from your manufacturer, warehouse them and then ship them to your customers. Ask whether they have the capacity to add your products to their existing operation, and, further, whether they have the capacity to grow as your business grows. Flexibility is key.
You also want to know whether there are any minimums that must be maintained, in the event your business slows down for a particular period or season. 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.
WHAT PERCENT OF MY ORDERS CAN REACH MY CUSTOMERS IN TWO DAYS OR LESS FROM THE 3PL’S WAREHOUSE?
Proximity to customers is important. Inquire about the number of warehouses the 3PL owns and whether the 3PL has relationships with other 3PLs or a larger warehouse network. The more warehouses in the network, the closer your products will be to your customers. Also, you can also rest assured that there will be additional warehouse space should you experience a spike in demand.
Some 3PLs even operate their own transportation network for even faster movement of goods. 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.
CAN THE 3PL HANDLE CUSTOMER SERVICES AND RETURNS?
How the 3PL handles returns is key to building customer loyalty. Ask how fast the 3PL handles returns and issues refunds, and how the company factors in daily cutoff times for fulfillment. Further, find out how quickly returned items are placed back on the shelf.
These may not seem important, but they could lengthen the delivery windows within which your customers receive your products, affecting your customers’ experience.
HOW DOES THE 3PL CALCULATE SHIPPING? CAN THEY SHIP INTERNATIONALLY?
The cost of shipping is one of the biggest challenges for any e-commerce business, regardless of size. The good news is that a large 3PL most likely has negotiated deep discounts with several shippers. To avoid disruption, find out whether the 3PL works with your preferred shipper.
Other considerations include whether the 3PL can handle shipping overseas. This could be a tremendous benefit for you, enabling you to expand your business by offering your products internationally.
WHAT TYPE OF SYSTEMS AND TECHNOLOGY DOES THE 3PL USE?
In the age of Amazon, this may seem like a no-brainer, but some are more advanced than others. Look for a 3PL that has made a substantial investment in technologies related to inventory, shipping and tracking. Real-time tracking, for example, can give you complete transparency into your orders.
Technology keeps costs down, as both you and your 3PL partner can spot issues that can be addressed immediately. Some systems also include predictive analytics, which can be tremendously helpful in product planning and cost analysis moving forward.
WHY TAYLORED SERVICES
Taylored Services is a fully integrated 3PL provider specializing in wholesale, retail and direct-to-consumer unit fulfillment. We operate 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.
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 security, mobility, e-commerce, and IoT.