In today’s ecommerce driven world, the right third party logistics (3PL) partner can mean the difference between success and failure. But with so many fulfillment company options, where do you start?
Finding the right fulfillment vendor won’t just save you money — it brings you peace of mind and repeat customers. From integrated technology to compliance certifications, we’ve compiled seven important factors to consider when choosing the best 3PL for your business.
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What Warehouse Management Technology Do They Utilize?
A fulfillment company’s investment in technology can make all the difference when it comes to optimized efficiency, order picking process, and accuracy in both order fulfillment and inventory control. The benefit of a truly integrated logistics partner is seamless operation between their Warehouse Management Systems (WMS) and your shopping cart or BRP. Qualified 3PL’s automate the receipt of orders by integrating their WMS directly to a client’s storefront. Proactive fulfillment companies also utilize advanced platforms to allow for a real-time window to operations to ensure on-time shipping for 99.9% of orders.
Chose a third-party logistics vendor with WMS technology that also supports your specific product’s requirements for inventory management. Ideally, inventory is managed at the case level. This means that every case is barcoded and contains the SKU information (including lot and expiration) for that case. Qualified 3PL’s follow strict inventory management processes for real-time tracking of lot numbers and expiration dates so that the “FIFO” (First In-First Out) or “FEFO” (First to Expire-First Out) approaches can be applied as required.
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Does the Fulfillment Warehouse Have Compliance Certifications?
Spare yourself the costly mistake of non-compliance by asking if your 3PL is certified to handle hazardous material. A HAZMAT Shipping Certified 3PL eliminates the guesswork from hazardous material transportation guidelines, including all special regulations and procedures when shipping by air, ground, rail and sea. Choose a fulfillment warehouse with extensive experience safely storing, handling, packaging and shipping HAZMAT products such as lithium ion batteries, or aerosols found in cosmetics and hair care products.
If you provide food and beverage, supplement, nutraceutical, pharmaceutical, and other temperature-sensitive products, seek a fulfillment and contract packaging provider that is cGMP compliant and FDA registered with climate-controlled facilities.
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How Broad is Their Shipping Coverage Range?
When it comes to shipping speed, it’s all about location, location, location! A recent NRF shipping report details that 39% of consumers expect two-day shipping to be free, while 29% have backed out of a purchase altogether if two-day shipping wasn’t free.
To keep up with consumer demand, and minimize time in transit, seek out a fulfillment company with centers strategically located near major cities and coastlines. Beyond that, they should ensure same day pick, pack, and ship services and the lowest transportation costs. A 3PL that has negotiated rates with carriers such as UPS, FedEx, and USPS can result in substantial transportation savings to you.
In the age of Amazon, the importance of shipping speed simply can’t be ignored. Opt for a 3PL that has the capability (and proven track record) to meet Amazon’s strict fulfillment standards for on-time shipping and quality.
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What Other 3PL Capabilities and Customization Services Are Offered?
Does your 3PL offer value added services like contract packaging? As your business grows, it’s important to consider a partner that can cover all aspects of your operation for a truly integrated logistics approach. A full-service 3PL can efficiently keep up with growing demand by seamlessly incorporating warehousing and fulfillment services as need arises. Seek a 3PL that can support your distribution, retail, and end-user fulfillment needs.
Incorporating secondary packaging solutions directly into the supply chain reduces cost (both processing and transportation) and time to market. The flexibility provided in sourcing promotional packaging and the ability to automate the picking and packing processes save you money when order volumes require adjustments up or down. As an added bonus, a 3PL that offers contract packaging services gives you access to equipment without having to deal with maintenance and repairs.
Don’t forget to ask about basic square footage. Does your third party logistics partner have the capacity to keep up? Is their facility built to accommodate high volume, large pallet orders? Don’t let warehouse capacity hold you back. Choose a 3PL that can support your business plan as you scale.
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Have They Received Industry Recognition?
Look for a logistics partner that is recognized among industry leaders. Multichannel Merchant has published its fourth annual MCM Top 3PL listing for 2019, a searchable directory of leading 3PL providers in ecommerce and direct-to-customer operations. This searchable directory helps you find the right provider to suit your needs.
Has your business implemented supplier diversity standards? There are 3PL partners who can help support your commitment to achieving a supplier base of minority and women-owned business enterprises. Choosing a 3PL who meets such criteria — such as Women’s Business Enterprise National Council (WBENC) certification — helps your business uphold broad diversity in the marketplace. It’s just one more strategic advantage that the right fulfillment vendor can offer your business.
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What’s Their Customer Service Style?
While it might be tempting to simply opt for the cheapest or largest 3PL, the value of classic customer service can’t be overlooked. A fulfillment company that pairs enterprise-class capabilities with boutique attention to detail and customized solutions ultimately will act as a true partner for your business.
Long-standing, customer focused 3PLs offer access to senior management and dedicated account reps to ensure that all questions and requests are handled by a real person — not a ticket queue or chat bot. A 3PL dedicated to the details makes all the difference when shipment speed, accuracy, and overall customer experience are on the line.
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What Is Their Commitment to Excellence?
A 3PL with a true commitment to excellence will display full transparency when discussing how they achieve and maintain the highest level of accuracy for industry standard metrics, otherwise known as key performance indicators (KPI). These KPI’s include Dock to Stock, Inventory Net Unit Accuracy, Order Fill Rates, and Same Day / On-Time Shipping. Dock to Stock refers to how long it takes the 3PL to put away product once it has been received. Inventory Net Unity Accuracy measures the overall operational process control within a facility. Levels are calculated by system-drive velocity-based cycle counting. Order Fill Rates measures how often the 3PL does not have the stated item in inventory when it is appearing as available in the system. Same Day / On-Time Shipping is based on negotiated order cut-off times that are typically driven by carriers.
In short: Does the 3PL have the talent, technology, and facilities to give you a strategic advantage?
Retailer online sales soared by 18% in 2017. As ecommerce demand rapidly expands year over year, can your 3PL keep up with the next wave? It has never been more urgent for ecommerce merchants and logistic managers to find a vendor that offers the right mix of experience, powerful technology, and value-added services to keep up with consumer demand.
LEARN MORE: Thinking about outsourcing fulfillment services? Contact the experts at Jay Group. Leading the fulfillment industry since 1965, today’s top companies and ecommerce retailers rely on Jay Group’s experience, customer focus and enterprise level technology solutions to deliver the best possible experience to their customers.
