Are you considering partnering with a third-party logistics (3PL) company for your eCommerce business? Make sure you find the right team by asking these questions.
As the world of eCommerce grows at an exponential rate, more businesses are struggling to operate in the fast-paced, competitive online marketplace. Many companies have partnered with third-party logistics teams (3PL) to help meet customer expectations and streamline their processes.
A professional 3PL team can assist eCommerce businesses with offsite warehousing, sourcing, packaging, shipping, and much more. However, not all 3PLs are built the same – and contracting with the wrong one can cost you much more than a logistics headache.
If you expert your eCommerce venture to compete with massive online retailers such as Amazon or eBay, you need to find a logistics solution that can keep up. If you are looking to partner with a 3PL company, here are the top eight questions you must ask before signing on the dotted line.
8 Questions To Ask A Potential 3PL Company
1. What Services Do You Offer?
It may seem redundant to ask what services a 3PL offers to its eCommerce partners, but this is a question worth asking at the start of any potential partnership.
Most 3PLs offer a variety of services to their clients across the supply chain process:
- Sourcing & Procurement: Leading the way in sourcing and ordering the products that your eCommerce sells to customers and procuring those products from supply chains.
- Fulfillment: Automatically receiving online orders placed by customers through your eCommerce store and completing the process of picking, packaging, and shipping orders to the customer on your behalf.
- Product Storage: Rather than depend on your own location for stock storage, 3PLs will store sourced products at their warehouse or storage facility for fulfillment.
- Transportation: The 3PL will handle any necessary transportation of products throughout the process.
- Analytics: A 3PL will use data-driven software and hardware to generate reports on stock, fulfillments, shipping costs, and much more to help you understand your company’s health.
While you may expect a 3PL to offer all the services you need, you must ask what services are offered and how experienced they are at those services. This can help you avoid finding another company to handle a particular need if your new 3PL doesn’t provide a specific service.
2. What Products Does Your 3PL Specialize In?
Depending on your eCommerce business, you may need a particular 3PL that specializes in the supply chain management of that particular product.
Depending on the warehouse capabilities and the shipping styles of a 3PL, they may or may not be able to handle your product procurement and fulfillment needs.
The same is true for shipping, as different products may require additional shipping needs.
3. How Can You Help My eCommerce Business Succeed?
More than a logistics manager, you should look for a 3PL that is ready to be a partner in your enterprise! No matter your current size or structure, your 3PL should be primed to step in and help you offer high-quality customer services across the ordering process.
Ask a potential 3PL what systems they utilize to ensure that your products are sourced and shipped properly and how they take advantage of TMS systems to help you analyze your performance.
If your 3PL doesn’t seem interested in your success as well as theirs, you may want to move on to a new candidate.
4. What Is Your Liability Process?
In the course of your eCommerce journey, you are liable to run into issues. Whether due to accidents at the site or the loss of products due to unforeseen errors, you need to ensure that your 3PL has the capabilities to handle any liability that may arise.
Not doing your due diligence to make sure a 3PL has your back can cost you big should the unthinkable occur.
5. How Do You Handle Any Errors Or Mistakes?
Similarly to liability, you must ask a potential 3PL how they handle any order fulfillment mistakes and errors.
As a business that thrives on customer satisfaction, you will want to make sure that your 3PL has exceptional customer service skills to ensure any errors or mistakes that occur on the sourcing and fulfillment end are handled and taken care of quickly.
A slow-moving 3PL can cause your reputation to suffer as customers face ongoing issues related to their orders.
6. What Software Solutions Do You Utilize?
Most 3PLs use advanced software solutions to operate their logistics systems. This is one of the main reasons that eCommerce has enjoyed such success in recent years.
Ask your 3PL what TMS or SaaS solutions they use to fulfill their orders for clients. This can give you a good idea as to how much they are investing in their infrastructure to ensure that your products are sourced, stored, and shipped fast and effectively.
7. Do You Have Reviews Or Awards?
Never take your 3PL’s word for it. Always ask if they have any client reviews and portfolios to back up any services they offer. It can also be beneficial to ask them if they have received any accolades or awards for their 3PL operations over the years.
If your 3PL can showcase a history of successful operations, then you are more likely to feel comfortable trusting their services for your business success.
8. How Will You Scale With My Business?
Last – but certainly not least – you should ask a potential 3PL how they help businesses scale their operations. As a business owner, your hope should be to see your company thrive and grow over time.
