5 Factors You Need to Know Before Selecting a 3PL Fulfillment Provider

Did you know that Amazon increases its fulfillment expenses year-on-year? In the recently reported data, Amazon fulfillment expenses grew up to 45 percent in 2020-21 as compared to the previous year. Amazon’s fulfillment costs crossed over 58 billion U.S. dollars. 

Utilizing the services of eCommerce fulfillment is excellent for saving money and resources. Fulfillment services involve all the aspects of the products that you sell or decide to sell including order receiving, order management, warehousing, logistics, shipment tracking, and customer queries.  

But amidst all the benefits, you should also realize that your fulfillment process is going out worse and getting complicated. It is time to call reinforcements. Not sure where to start? You can select 3PL fulfillment companies to be better prepared to fulfill all the requirements of your business. 

The right eCommerce 3PL company can help your business reach the next level of success. But before hiring a third-party fulfillment provider you should be better prepared to make the right decision.

5 Things to Consider When Collaborating With a 3PL Fulfillment Company 

Trust is the main factor when choosing a 3PL fulfillment partner. Do you feel they understand your business needs? Have they answered all your questions? 

• Do they offer a service guarantee? 
• What shipping partners or courier companies do they use? 
• What is their market reputation? 
• Do they provide discounts on shipping rates? 
• Do they have warehouses at different locations?
• Do they offer online access to your account information?
• Do they offer channel integration and marketplace integration?
• What technology do they use to automate different functions?

If you sense everything is right, now is the time to hire them. Evaluate your potential 3PL fulfillment partners based on these 5 criteria to decide which one will be perfect for your business.

Services Provided

The first thing that you need to check is the details of the services provided by a 3PL fulfillment company. Depending on the products you sell, warehousing, shipping, order fulfillment are pretty much needed by all companies. But the fact is all business is unique and so their requirements. Everyone has some special requirements that need to be taken care of. You should hire a 3PL fulfillment provider that is ready to innovate and fulfill all your requirements, and even offer some add-on services and custom solutions.

When selecting an eCommerce 3PL partner, you want to ultimately partner with someone who can help accomplish your business goals. A company must align on with your specific requirements. Before you choose a third-party logistics provider, outline challenges that you are currently facing or you could potentially face in the near future. It will help you prepare your list of 3PL providers that could aid you to meet all those challenges. 

Evaluate your needs for SKUs, channel integration, order volume, any new product category you want to add to your list. If you sell across multi-channels for example Amazon, eBay, or have a wholesale business or sell through your own website. These factors help you to decide your business requirements that you can share with a 3PL provider. Even if you don’t need any additional services right now, it’s worth finding a 3PL company that offers a bit more. Plus, the abilities of your fulfillment partner may actually give you some help and new ideas for business expansion.  

Pricing Info 

Pricing is one of the most important factors when selecting a 3PL fulfillment company.  But to find a fulfillment partner that provides affordable services is always not easy. Remember that the cheapest option is the first thing you should check for. It is what you’d actually look for. Check if there are monthly or annual pricing options. Ask for the details of any per-order charges or per-transaction fees, shipping charges, etc. 

Price is a major factor when deciding on a 3PL company. Offers that seem good need to be checked twice to look for any hidden costs. Don’t forget to compare the shipping pricing of a company, as this will not affect your estimate. Consider your requirements to list storage, order fulfillment, and shipping needs with each 3PL, then calculate anticipated costs and determine which one is the best 3PL company for your needs. 

When comparing the pricing of different third-party logistics companies, evaluate your company’s future growth, and storage cost also plays an important role. So dig deep into the per-order costs and shipping costs. The more accurate they are, the more precisely you’ll be able to calculate the expenses of a 3PL company.

Locate Fulfillment Centers

The fulfillment center store all of the items that you ship to your customers. Naturally, it’s an important aspect of an eCommerce business. Nowadays customers are receiving orders in record times. So it is vital to prioritize 3PL companies that deliver products to customers quickly. It’s not usual for an organization to find a fulfillment center closer to your customers, the nearer the distance the goods have to travel, you can provide one or two-day shipping to your customers quickly without any additional cost. 

If you need to sell worldwide, a fulfillment company can provide you with a warehouse in a nearby city. You will be also well-prepared to address the increasing demands of customers. Shipping from a nearby location will mean huge benefits for you in terms of speed and price. Plus, if you store your products in nearby locations, shipments from one foreign country to another typically will not invoke any customs charges.

Get Details of Shipping & Courier Partners 

As you can see, there are endless benefits a company can take by simply choosing a 3PL fulfillment company. A huge advantage of collaborating with a 3PL company is access to better shipping services and multiple courier partners. By choosing larger 3PL fulfillment companies, your business can enjoy quick shipping services at the lowest rates. So when you’re looking at potential 3PL providers also look at their courier partners and the range of shipping services they offer.

Get details of everything related to shipping services and how quickly they can dispatch your orders and what they offer for the next-day delivery orders. Also check if your fulfillment partner sends out tracking details of shipments, order confirmation emails to customers. It might seem small, but these are the most important aspects of a business. You should also inquire about the shipping rates before choosing them. 

Always remember to share the details of the required service according to the size and weight of your products. This will also affect shipping too, if you need shipping services for heavy items, make sure they can provide this without any additional costs. When choosing a 3PL fulfillment company, check for the reliability of their shipping services and relationships with courier partners.

Don’t Compromise on Customer Support & Security

Of course, no one ever wants to compromise. This is why customer support plays an extremely important role in the success of an organization. Find out a 3PL company that keeps track of your customer’s order and solves the issues using email, live chat, call, and SMS. 

A problem can appear to your customers at any time of the day, but will you be able to solve your customer issues at the right moment. This is especially important if your customers are from a different time zone. An hour of delay in response can make much of a difference. Don’t compromise on this element while finding your 3PL fulfillment company, check and compare different fulfillment companies and how they respond to your questions via various channels, and how do they answer your queries.

Security of inventory and shipping data is also crucial. Make sure your 3PL partner provides you with the right technology solution to accommodate data from multiple sources, manufactures, sellers, and warehouses in your network. 

So this is a checklist of factors that you’ll expect from your 3PL fulfillment company. Get started with your research. Although it may take time, you’ll definitely find the best third-party logistics company that’ll be the perfect fit for your business. These points are perhaps the most important. You must consider these points before selecting an eCommerce 3PL company to outsource your shipping, warehousing, and order management needs.

Author Bio:   Rashmi Sharma is a Content Specialist at Shiprocket, India’s Leading eCommerce Logistics Solution. She has a keen eye on trends and likes to share her thoughts about the upcoming technologies and innovations in the e-commerce logistics industry.