Comprehensive Checklist to Take to Your Next 3PL
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Finding the right 3PL is critical for your eCommerce success. Learn how to vet fulfillment providers, measure ROI, and ask the right questions to ensure long-term growth.
There is a lot involved when vetting a new fulfillment provider. Whether you are looking to switch partners or beginning the journey of outsourcing, finding a partner that is a right fit for your brand is imperative to growing your ecommerce business.
When comparing fulfillment providers, select a few (not too many!) and vet them against each other. Tour their facilities and spend time with their teams. Ask hard questions about what they can provide for your business. You’ll want to find the right fit, not just the lowest price.
Below is a series of questions you should take to your prospective 3PL.
What is a 3PL? What Services Should a 3PL Provide?
A third-party logistics provider, known as a 3PL, executes fulfillment and logistics services for companies looking to get their products to customers. A 3PL is often an intermediary between supply chain partners, acting as a liaison between shipping carriers, manufacturers, freight forwarders, and retailers.
All 3PLs operate differently. Many will have core services like storing and managing inventory, picking and packing orders, and preparing packages for shipment. Others may have specialty value-added services like cold storage, FDA certifications, kitting, light or involved assembly, quality assurance testing or rework, refurbishment, returns management, customer service, and more.
To find the best 3PL for your brand, you first must know what your business needs.
- Are you selling direct-to-consumer, or retail, or both? Some 3PLs only focus on one or the other.
- Do you need Amazon support? Amazon has strict requirements that will need constant attention.
- Do you want a premium customer experience, or a budget-friendly model? Look at the other brands a 3PL handles to get a sense of their core competencies.
- Will you need to distribute products closer to customers to ensure fast delivery? Is your 3PL’s warehouse in a region that supports your inbound and outbound shipping strategy?
These are only a few of many questions you’ll need to answer to start filtering out the 3PLs that don’t meet your criteria.
Measuring the ROI of Outsourcing Fulfillment to a 3PL
So many ecommerce brands look to a 3PL’s rate card to decide if they will be a good fit as a provider. This can be short-sighted and leave a brand paying more in the long run if the 3PL can’t meet your brand’s needs.
Working with a 3PL should help you improve operational efficiency, reduce costs, and increase customer satisfaction. But how do you measure that? There are a few indicators that can help you ensure that the costs associated with outsourcing fulfillment outweigh the benefits.
- Cost savings -- it might seem counter-intuitive that you can save money by working with a 3PL that is not a low-cost leader. A reliable 3PL should help you streamline your supply chain. This may take the form of consolidating shipments, giving you tools to track and manage inventory effectively, and leverage established carrier relationships to reduce transportation costs.
- Time savings -- if you aren't spending your time picking products and packaging them, you’ll have a lot more time to focus on product innovation, personnel, fundraising, and growing your brand. By outsourcing fulfillment to a well-connected provider, companies may have a range of services at their fingertips, such as freight forwarding, warehousing, and international support.
- Improved customer satisfaction-- a 3PL has a direct impact on your customer’s experience. A high-quality 3PL will ensure your premium service, faster delivery times, and accurate orders. Track customer retention and growth as part of the value of a reliable 3PL.
- Scalability and grow opportunities -- you should be regularly assessing your brand’s ability to meet the current market conditions, and your 3PL is an integral part of that. Your fulfillment provider is an extension of your business. Their attention to accuracy and quality will be a critical part of helping your brand stay competitive, navigating demand fluctuations, and seeing new business opportunities.
Comprehensive Checklist for Vetting a New 3PL or Fulfillment Provider
General Operations & Costs
What products do you specialize in?
What’s your minimum monthly order volume? Are there charges if we don't meet that number?
What type of contracts are required? What is your service level agreement (SLA)?
What is your on-time shipping performance?
Do you have an order accuracy performance guarantee?
Do you offer same-day order processing?
How long does integration usually take?
What is the full cost of your service fees?
What’s not included in the initial cost quote?
Facilities & Quality Assurance
What are the most recent upgrades you’ve made to your facilities?
What quality certifications do you hold?
What are your normal business operating days/hours? Are there options to extend those for special projects?
How are you working toward more sustainable practices in your operations?
What errors have you handled in the past? What does a corrective action plan look like?
Where are your facilities located? Do you offer distributed inventory?
Technology
What type of technology suite do you use for inventory management?
What is the warehouse management system you use? Can we see a demo?
Do you have an open API? What integrations do you work with natively?
Which checkout software, financial tools and ERP do you connect with?
What partnerships, integrations, and API support do you provide?
Shipping & Transportation
Who are your shipping partners?
How do you handle freight and postage fees?
Do you handle returns?
Do you help with refurbishment and QA testing for reselling items? Do you handle disposal?
What percentage of shipments arrive on time and in full?
What percentage of my orders will reach customers in two days or less?
Do you fulfill international orders?
Overall Service & Scalability
What's the structure of your support team?
Will the same person be working on my business? If not, how do I ensure the person I'm
speaking with understands my business and how to support me?
What is the chain of events if an issue arises? What would escalation look like?
What’s your average customer response time?
Is my fulfillment handled by your employees, outsourced, or a combination of both?
What is the average turnaround time for completion of documentation?
How have other brands scaled with you?
What are the KPIs you help your customers track?
What type of reporting can we expect from you?
About DCL Logistics
DCL Logistics is a modern 3PL, grounded in 40 years of operational expertise. Providing comprehensive, flexible fulfillment solutions for companies of all sizes, we scale with our customer’s growth. With best-in-class fulfillment software, dedicated and personalized account management, and a national network of fully owned fulfillment centers brands come to us to grow their business.
DCL Logistics specializes in omnichannel ecommerce fulfillment—from DTC, to B2B and retail, to online marketplace distribution—we’ve done the work to make logistics seamless for our customers.