How to choose a 3pl provider – What to look for in future third party logistics partner

Today, more and more people are doing their shopping online. And this is a great advantage for any online retailer. As the volume of orders grows, so do the sales - and with them, the overall effort. As online store orders increase, your warehouse becomes smaller and smaller, and you spend more time than average receiving, packing, and shipping goods, as well as managing returns. Your logistical and personnel possibilities are exhausted. The most important resource is stretched to the limit - your time. This is the appropriate moment to start looking for a third party logistics provider. But which one is the most suitable one, and how can it be recognized? We'll explain in this little piece how to choose a 3pl provider and what to look for in potential candidates.

1. Scope of services

Working together with a third party logistics provider has a lot of advantages. 3pls offer their assistance in usual fulfillment tasks. They will receive your merchandise at their fulfillment centers and store them temporarily, usually not longer than 1 month. They will receive orders from your buyers, pack and prepare them, and send them to the customers. Some providers additionally offer management of customer service. These are the basic services that every 3pl must be able to perform very well.

That's why when choosing a 3pl provider, you should look not only at the basics, but also at what additional services 3pl candidates offer. Even if you don't need them now, they can be useful later. Check to see if the provider's services are adaptable if your business evolves in one direction or another.

For example, Fulfillment Box offers additional, non-standard services on request. This helps to successfully solve a large number of different problems.

2. Technology

Many 3pl providers provide technology solutions to connect the online marketplaces directly via digital interfaces. This allows a merchant to fully integrate and automate logistics. By automating the transfer of order data from the store system to the storehouse, fulfillment can be started without delay to enable fast delivery - without the online retailer having to intervene.

With regard to technical integration, however, it is necessary to examine exactly which functions are available. Above all, real-time restock is very advantageous and helps to avoid stock-outs. In addition, the replay of shipment data in the online store should function smoothly so that full transparency is made possible for sellers and buyers.

Fulfillment Box, for example, uses Ysell.pro software for such purposes. It enables smooth integration with all sales channels to upload orders and update inventory.

3. Location

A rapid delivery is essential these days. The shorter the distance your merchandise has to travel, the faster it is going to reach your buyers and the less you have to pay for transportation.

An excellent fulfillment center should be centrally located so that your buyers can pick up their purchases there within two business days. Another advantage of a centrally located center is cheaper shipping costs. Shipping costs are usually calculated based on the number of zones. The more zones a package has to cross, the more expensive shipping becomes.

In particular, Fulfillment-Box has fulfillment centers around the world - Europe, USA, Canada - strategically located to cover most territories and ensure fast delivery.

4. Fees

Third party logistics providers differ from each other to a great degree - from the range of solutions they provide to the costs. Research the prices before signing the agreement and hiring a third party logistics partner to handle fulfillment tasks. Do they charge monthly or annual fees? What are the costs for additional services? Are there any minimum fees? In any case, do not take the first 3pl you find. Also find out what services are included in the price and to what extent. Rather choose the 3pl provider whose offer covers all your storage and handling needs.

5. Communication and partnership

Since the role of a third party logistics provider is to oversee the most critical segment of your business, you should choose a provider you can fully trust. Before choosing a partner, make sure your strategies and tactics for achieving goals are aligned with those of the candidate. Transparent and straightforward communication with your 3pl is critical.

For example, Fulfillment Box creates an individual chat for each customer that can be used at any time to get advice from a manager.

6. Scalability

The ability to scale is an important benefit of outsourcing. Choose a candidate that is able to keep up with the evolution of your business, even in the long run. A 3pl provider that one day is no longer able to manage your business because you expand faster than expected is undesirable.

Another important issue is seasonal fluctuations and sales peaks during the holidays. In logistics, seasonal fluctuations lead to critical bottlenecks. Third party logistics providers must handle higher order volumes and hire additional staff to ensure timely processing of shipments. Especially if the holidays or seasonal business is highly relevant for your online stores, care must be taken when selecting a third party logistics partner to ensure that it can also handle peak times well.

7. Customization

A small message or brand logo on the packaging makes you stand out from the crowd. Personalizing services is invaluable because it leads to a positive customer experience, which in turn leads to follow-up purchases. It also allows sellers to quickly adapt to their customers' needs and market trends.
Choose a 3pl provider who allows personalization and is capable of representing your brand.

8. Customer service

Many third party logistics providers can also supervise customer service besides usual fulfillment tasks. In case you don't want to manage it yourself, make sure your potential 3pl provider has extensive experience identifying and effortlessly resolving customer issues. Since 3pl will be communicating directly with your customers, it should be able to represent your brand positively and resolve issues professionally.

9. Stability and experience

Before choosing a 3pl provider, you should check the financial strength of the potential candidates. A financially sound third party logistics provider has more chances to survive a possible economic crisis. Also, a good 3pl provider will continuously improve its services by investing in staff and facilities.
3pl providers who have been in the logistics industry for a long time have gained a lot of experience and are able to provide excellent services.

Conclusion:

Third party logistics providers should first and foremost relieve companies and thus offer the opportunity to devote themselves entirely to the company's core tasks. Clear own ideas and requirements help in the discussions and in the evaluation of the respective 3pl partner. All details and cost issues should always be addressed. Finding the right third party logistics partner is of great strategic importance. Since the cooperation is long-term, prices should be negotiated fairly and the technical integration with your online store should work smoothly.