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How To Choose A 3PL

How To Choose A 3PL

In the digital era, where online shopping and fast delivery are becoming the norm, brands have to be e-commerce ready.

Having an efficient online portal is definitely on top of the list. However, the next point in the checklist is reviewing if its warehousing capabilities company with e-commerce’s fast pace.

This guide speaks to companies in the following situations:

  1. Companies that manage their own warehouse.
  2. Companies that use a 3PL Partner.
  3. New Companies currently analyzing logistics options.

1) Companies with Own Warehouse

In the old days, brands that wanted to have complete control of their operation ran their own warehouses, but as logistics for e-commerce gets more technologically sophisticated, this option has become too complex and costly.

In order to effectively process e-commerce orders, the fulfillment warehouse has to invest in the software and systems needed to comply with multiple vendors platforms, routing requests, and complex operations.

The failure to perform those tasks correctly, can cost brands a fortune in chargebacks, penalties and suspended accounts.

The inability to invest in the needed technology to effectively run a busy e-commerce operation leave many companies closed to the e-market.

2) Companies Using a 3PL Solution

Many companies mention that they have been running their business with the same 3PL for a while and got comfortable. I often hear phrases like “we’ve been working with the same 3PL for years and they are like family”. This last sentence gives me the hint that they’ve gotten comfortable and this is not always good for business.

Often times brands adopt their 3PL limitations as their own, and close doors to opportunities because “we cannot work with drop-ship” or “we cannot work with any other system than EDI” etc.

A smart business practice would be to research and compare what is been offered in the 3PL market nowadays. Investigate if the current provider is up to the industry standards and able to fulfill your clients’ requirements.

3) New Companies Re-searching Options

New brands have a difficult time when selecting providers because they are not aware of their future sales volume nor of the complex demands that their clients will request.

Frequently, new brands start small but their order volume can shoot up fast with a specific promotion or entering in a popular website and if their 3PL is not ready to process a high number of orders daily or to set up drop-ship with your client then your growth is capped. 

Next are some points to help Operations Managers to evaluate a 3PL company:

  • Can your 3PL fulfill the high volume of orders you might receive from running an online promo within the timeframe allowed?
  • Would your 3PL be able to send your online clients same day tracking numbers so the risk of cancel order decreases?
  • Does your 3PL offer you full traceability so you can fight back unfair penalties by e-tailers?
  • Would your 3PL be able to fulfill complex wholesale orders that require dozens of routings within the same order?
  • Can your 3PL receive electronically all your orders on real time?
  • Does your 3PL control the order’s priority to avoid late fees?    

We hope that this guide is of help to many! For further questions or if you need an excellent 3PL partner, contact AMERIWORLD FULFILLMENT SERVICES, we can provide an efficient high volume e-commerce and wholesale fulfillment for consumer goods brands.