If you are an e-commerce business considering 3PL fulfillment, then you know this is certainly not a decision to be taken lightly. The implementation of a 3PL is both a large financial commitment and can result in a significant company restructuring. Choosing the right 3PL for your business is crucial for obtaining its full benefits.
#ShipTip: Are you certain that 3PLs are the right fit for your business? Check out our resource on DS Education, which provides a comparison of 3PLs and self-fulfillment.
4 Key Points to Consider When Shopping for a 3PL:
Know Your Industry
The best 3PL to choose depends on the industry you're in, so it's important to thoroughly research it and pick one that has the expertise you need. For example, if you need to send your items cold, you should find a 3PL that is experienced in cold deliveries and has a strong infrastructure to store and sort cold products. While some industries are more easily accommodated than others, it is essential that your chosen warehouse has additional options. Is your company in need of specific box sizes, secure packaging, or special inventory sorting procedures? Ensure that you work with a 3PL that can support your industry demands.
Know Your Customer Base
Knowing your customer base means fully understanding the expectations they have in regard to shipping. Take the time to identify where most of your orders are being placed. You may find that shipping costs are high if you are located in California, but the bulk of your sales are on the east coast. Working with a third-party logistics company has the advantage of having warehouses located throughout the country, thereby saving you money on shipping costs over time. As another benefit, when orders are fulfilled closer to your customer base, you can exceed your customers' expectations by delivering packages to them much faster than in the past.
Know Your Carriers
It is common for 3PL companies to have their own preferred carrier(s). As such, if you have great relationships with your current carriers, you must ensure that your 3PL has good relationships with them as well. It might be worthwhile to part ways with your current provider, depending on the commercial pricing that your 3PL has arranged with their preferred carriers. A 3PL often has access to lower shipping costs as their shipping volume is usually greater than that of a single company.
Know your Volume and Growth Projections
When seeking a 3PL, shipment volume is an important factor to consider. There are many different types of 3PL fulfillment companies. In addition to larger, more international companies, there are small, more localized companies. The challenge is knowing when you're too small for the bigger 3PLs, and when you're too big for smaller ones. It may be possible to use a variety of 3PL companies for the shipping of specific products, depending on the contract. Be sure to ask these questions and know your numbers before you choose a 3PL.
As a reader of this article, you are probably seriously contemplating the possibility of working with a 3PL. There is no doubt that this is an exciting transformation for any e-commerce business and can be very beneficial for your organization. Before you jump into a new chapter in your business, you need to be certain that you are prepared to select the right company for the job. Bonus Tip: Consider a 3PL that uses DesktopShipper to help manage shipments in order to ensure quick and efficient processing of your orders.