Everyone starts out small – including ecommerce store owners. While your online store is still at the beginning stages, you’re probably taking care of most things yourself, including order fulfillment and shipping. But as your store grows and your customer base expands, you might experience that coveted but slightly complicated moment when you realize that you can no longer handle everything by yourself.
If your store sells physical goods, fulfilling orders and shipping them out may actually be something that you enjoy – with every order going through your own hands, you can always be sure about the product’s quality and its packaging. But if you find yourself spread too thin between order fulfillment, marketing, customer support and everything else, this may mean that it’s time to entrust parts of your business to someone else – a third-party logistics (3PL) company.
And here comes the tricky part – how do you find a fulfillment company that you can trust? There are many companies that provide these services, and you can easily get lost in all their offers. If this is your first time on this ecommerce horse, make sure to do thorough research before you commit to someone. Shipping your goods to a warehouse, having them stocked and later returned if you’re not satisfied with the service, and starting the whole merry-go-round all over again can quickly become extremely time-consuming and nerve-racking. In the end, it can even defeat the purpose of why you started looking for a 3PL company in the first place.
So here are the 6 basic things you should look at when you’re thinking of collaborating with a 3PL company.
The provided services
The first thing that you need to be sure of is that your potential partner will actually be able to handle all the things that your store requires. The basics – warehousing, order fulfillment, and shipping – are pretty much a given in all cases, but each business is unique, and you may have some special requirements that you’d like to see taken care of. Depending on the products you sell, you’ll need a fulfillment partner that’s ready to be creative and adapt to your needs, or even offer some non-standard solutions.
Working with a fulfillment company has the added bonus that it can also help you effortlessly monitor your stock levels – you’ll always see how much of each product you have left in the warehouse. And your partner will usually let you know when the stock is running low and it’s time to replenish it to ensure smooth order flow.
Even if you don’t need any custom solutions right now, it’s worth digging around the company’s offer a bit more. You never know what changes the future may bring for your business, and it’ll be good to know that you already have a partner that can easily adapt. Plus, the abilities of your fulfillment partner may actually give you some new ideas on how to expand your business. For example, if you’re using Printful’s Warehousing & Fulfillment service, you could easily expand your store with some custom-printed merchandise too.
Pricing
Although it’s extremely important to find a fulfillment partner that provides affordable services, remember that the cheapest option is not always the best. When it comes to pricing, the first thing you should check is what you’d actually be billed for, not the prices themselves. Are there some recurring monthly or annual fees? Are there any per-order or per-transaction fees that come on top of that?
Study the offers carefully – deals that seem too good to be true sometimes may actually indeed turn out to be so. Be on the lookout for hidden costs that may sneak past you. Don’t forget to check if the company has set minimum amounts that’ll be charged if your order fulfillment or storage costs don’t reach a certain threshold.
When comparing the pricing of different companies, your own predictions about the future growth of your store will play an important role. This will affect not only the per-order costs, but also your storage costs. So pay attention to your own calculations – the more accurate they are, the more precisely you’ll be able to evaluate the expenses a 3PL company would create.
Location of fulfillment centers
Nowadays we’re used to receiving our orders in record times – it’s not unusual for a product to already be delivered the next day after it was ordered. Naturally, an important element in this process is the proximity of the fulfillment center – the closer it is to your customers, the shorter the distance the goods have to travel. For example, the ecommerce giant Amazon has over 200 facilities around the USA alone to maintain its world-class delivery system.
If you sell worldwide, a major bonus that a fulfillment company can provide for you is a warehouse outside the US. Although shipping companies have designed routes that can get a product from one corner of the world to the other in less than a day, this often comes at a considerable cost. Shipping from somewhere closer will mean huge benefits both in terms of speed and price.
Plus, there’s another thing to keep in mind – customs. For example, if you store your products in the USA and a customer in Europe orders something, their order may come with an unpleasant surprise – customs duties. Meanwhile, shipments from one European country to another typically will not invoke customs charges.
Shipping
A huge advantage of collaborating with a 3PL company is access to better shipping prices than the ones that you can get for yourself. The larger fulfillment companies have negotiated special shipping rates, usually thanks to the large number of orders that they handle. By working with them, your business can also enjoy these rates. So when you’re looking at potential fulfillment partners also pay attention to theirs – their carriers and the range of shipping options they bring to the table.
This can help you considerably when it comes to converting your store’s visitors into buyers – shipping prices are often cited among the top reasons for cart abandonment. In a 2016 Statista research, 63% of digital shoppers named expensive shipping as the reason for not going through with a purchase. The figure fell to 54% in 2017, but it was still the top cause of cart abandonment.
So just think what lower shipping prices could do for your store! It might even be worth considering the option of slightly raising your retail prices and offering free shipping instead. It’s a popular marketing tactic that brings results.
Customer support
Of course, no one ever wants to run into problems, but it’s simply the way of the world that they do appear. This is why customer support plays an extremely important role in any ecommerce store. If something happens to your customer’s order, you have to be sure that you’ll be able to get through to the fulfillment company and solve the issue.
Find out how you can get in touch with your fulfillment company – there’s always email, but do they have a phone number you can call in emergencies? Or maybe they have a live chat option for all of us who hate talking on the phone?
And it’s not just a matter of how – it’s also important to find out when they’re accessible. A problem can appear at any time of the day – but will you be able to reach your partner at the right moment? This is especially important if you’re not located in the same time zone. While an hour here or there won’t make much of a difference, it can be a big deal if you’re located on two separate continents.
Don’t forget to test this element while doing your research – check how quickly different fulfillment companies respond to your questions via various channels and how satisfied you are with their answers.
Branding options
It goes without saying that the most important thing in your store is your product. But it’s also crucial to build your brand, and here even a small detail like a special message on the package that the customer receives can go a very long way.
Typically, 3PL companies are white label, and their branding doesn’t appear on the packages that customers receive. This means that your customers won’t know that you weren’t the one to physically pack and ship out the order – but it can look like it came straight from you because fulfillment companies offer different ways to customize packages.
So it’s worth studying the type of branding options that your potential partner offers, like the already mentioned possibility to add a special message or your logo on the package. There are also some companies that will use your custom packaging materials for your orders if you send it to them. But make sure to check if this comes with added costs.
Most importantly – don’t get lost!
Finding the right fulfillment partner is an important task that can have serious repercussions for your business later on, so don’t be afraid to take your time and invest in proper research.
Don’t be shy to ask questions to your potential partners. After all, you’re about to entrust part of your business to them – this is a considerable leap of faith. The partner you choose will also become responsible for your company’s good name and reputation, so it’s not a decision to take lightly.
A dismissive attitude or reluctance to answer your questions can be the first red flag indicating that the company may not be worth investing your time and effort in. If they can’t handle simple questions about their own services, what will happen if there’s a problem with an order your customer made?
So come up with a checklist of things you’ll expect from your fulfillment partner, arm yourself with patience, and get started with research – it may take time, but you’ll definitely find the best partner that’ll be the perfect fit for your business.
