- Plans & Pricing
The astonishing growth of online retail over the past 3 decades has created intense competition, enormous opportunity, and very few barriers to entry - a proverbial perfect storm of capitalism.
For both brands and consumers, it is a brave new world, and the demands of both parties have fueled an explosive expansion of the industry known as third-party logistics (3PL). 3PL services span the full range of eCommerce fulfillment processes, from warehousing to pick and pack to shipping to returns.
Whether a merchant is new to eCommerce or a seasoned veteran, the challenges presented by these logistics operations are immense, and outsourcing fulfillment services can be a wise move. Time saved here may instead be spent focusing on sales, marketing, product development, and everything else needed to build your brand.
Choosing the right 3PL company is not a simple decision, however. Just as intense competition exists amongst online retailers, so too does it exist between 3PLs, and not all are created equal. Determining which one is the right partner for your business will require you to do some homework.
At SkuNexus, we design management software solutions for merchants and logistics providers alike and have significant experience to help you make an informed decision. Here are 5 things to consider when selecting a 3PL fulfillment partner.
It is vital not to forget the fact that YOU are the customer here, and as such, hold all the cards. A self-assessment is crucial before making even the first inquiry toward working with a 3PL fulfillment center.
Current needs are of course the most pressing, but future needs must not be ignored. Projecting your growth and what you will require a few months to years down the road will also help in picking a partner for the long haul. This information should be shared in any conversations so the 3PL can make an assessment of its own capabilities (e.g. if you have a wide range of new products or plan to expand your eCommerce business into an international market).
Any business decision of this magnitude has its benefits and drawbacks. The cost savings and operational expertise 3PLs offer might be offset by the risk of diminished customer service, for example. These are trade-offs that each merchant must weigh individually.
Advantages to using a 3PL warehouse include:
Such convenience comes at a price, of course. 3PL warehouses can provide support in several areas, but they are not without disadvantages.
These baseline services must be part of any 3PL worth your consideration.
Clearly-defined pricing is a hallmark of any honest service provider, regardless of the industry, but transparency in regard to third-party logistics can go far beyond just costs. When the eCommerce merchant/3PL relationship is a true partnership, the results can be significant.
Being that an inherent element of using a 3PL is ceding control over one’s inventory and order fulfillment, establishment and maintenance of trust is key. Transparent 3PLs use software to give customers access to what is happening in the warehouse, as well as to the relevant data, metrics, and KPIs for their businesses.
Full transparency can also provide a useful audit trail for quality control. In a transparent 3PL, if errors are occurring during processing, data (made available to the merchant) can show what happened and steps may be taken to rectify the mistakes.
A transparent 3PL lets customers know how their products are being handled, its inventory management will keep them apprised of stock levels, and this all amounts to providing merchants with deep insights into things that are not fully within their control.
Not surprisingly, we at SkuNexus pay very close attention to this. Time and again, integration problems between different software systems can wreak havoc on logistics processes. Order routing breakdowns result in delayed fulfillment, broken shipping promises, and diminished customer satisfaction. And, that is just for starters.
Our enterprise management software systems are specifically designed for their flexibility and ease of integration with other platforms. Our order, warehouse, inventory, and shipping management functionality can be customized for use by both online retailers and 3PL providers.
If you would like to get a closer look and learn more about what SkuNexus can do for your business, please schedule a demo.
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