There comes a time when your e-commerce business is growing and you need to start looking at options to streamline your operations. This is generally when most brands look into hiring a third-party logistics (3PL) provider.
As you might expect, we’re particularly partial to our 3PL services here at Tradefull. But we’re also smart enough to know that we might not be the only choice you’re considering, which is why we’re offering tips on how to make the process easier.
Ready to learn how to choose the best 3PL provider for your needs? Let’s dive in.
1. Look at Your Current Shipping and Fulfillment Strategy
Before you can even think about hiring an outside logistics company to help with fulfillment, you need to first take a comprehensive look at how you’re handling things now.
Whether you’re the only one packing orders out of your garage or you have a whole staff on hand to assist with the process, it is vital to take stock of what’s currently working, where your shipping processes need improvement, and how your business can thrive moving forward.
Once you’ve determined this, you can make better choices on which 3PL companies fill any gaps you currently have or might encounter in the future.
2. Assess the 3PL Company’s Processes
To be clear, not every third-party logistics company is the same. That means it is imperative to review any potential provider’s processes and determine whether they’re in line with your needs.
For example, not every company has warehouses in multiple locations to help facilitate faster shipping times. If this is something that really matters to your customers, then it would be a good idea to find one that operates with this type of practice.
In reality, all honest firms will happily answer your questions on how they pick, pack, and ship orders. Any hesitancy or lack of transparency should be considered a red flag warning.
3. Consider Technology and Analytics
Another aspect to consider when finding the right 3PL company is the technology and analytics they offer.
Bigger logistics businesses usually have some sort of application or dashboard that makes it easy to connect to your online store. Likewise, they generally offer on-demand reports that give you an idea of current inventory, fulfillment times, shipping costs, and much more.
Finding the right 3PL for your e-commerce brand should include looking at which option gives you the most information as easily and seamlessly as possible.
4. Explore Warehouse Locations
In addition, it is important to explore where any potential 3PL you’re considering has warehouse locations and how that relates to where the vast majority of your customers live.
This is especially crucial if you have a high popularity rate in a specific area or your items have a certain shelf life—such as those that might be seasonal, melt during shipment, etc.
The right third-party logistics company should have multiple locations throughout specific regions in which your products generally sell. If you’re nationwide or it is a pretty big mix of zip codes, try choosing those that have good representation in multiple areas. This can cut down on shipping and handling times, which then improve overall customer satisfaction.
5. Find Out More About Shipping Rates
Perhaps you’ve narrowed your options down to just a handful of 3PL companies. In that case, take time to inquire about how to get the best shipping rates.
Why? Most third-party logistics companies work with multiple brands on a daily basis. This means they are constantly sending out a high volume of orders, which means they’re getting the best rates with carriers like UPS, USPS, FedEx, and others.
In turn, this can save your business thousands of dollars or more over the course of a year. This, as we all know, is one of the major benefits of hiring a 3PL provider in the first place.
6. Look at Testimonials
Another thing to consider is testimonials from the provider’s current and previous customers. When it comes to transparency, all reputable logistics companies should be more than happy to drop a few names of brands they’ve worked within the past or pass along recommendations.
Furthermore, some might even have reviews on places like Google My Business or other platforms. Really take extra care to look over both the company-provided ones and those floating around the internet. This should give you a broad picture of what it is like to work with them and the results others have had in doing so.
The biggest point here is that you cannot just take the 3PLs word that they’re experienced with what you’re looking for. Just like hiring any other service company, you need to do a bit of research first.
7. Take Your Time
When hiring a 3PL provider, it is super critical to take your time in the process. Just going with the option that’s the least expensive or the first one you find isn’t a good idea. In fact, you should have at least three options in mind to compare and contrast in the areas we’ve mentioned here.
Why is this so important? Firms can really vary in what they offer in terms of experience, niche knowledge, benefits, and more. Having a firm understanding of what each option can do to improve your e-commerce process is important.
So, how long should you really weigh your options? It generally comes down to the size of your firm and what you’re hoping to achieve. Just be sure to be thorough in the process to help avoid making the wrong decision.
Selecting the Right 3PL Provider
The decision to hire a third-party logistics provider for your e-commerce business isn’t always an easy task. However, using the tips we’ve offered, finding one that meets your needs the best is completely possible.
Interested in learning more about Tradefull and how we can help as a 3PL provider? Get in touch.