Make the wrong choice when you’re choosing a third-party logistics partner, and you risk increased shipping costs, delays and disruptions, and customer dissatisfaction. But when you choose the 3PL partner that aligns with your business needs, you’ll enjoy a streamlined supply chain, improved customer loyalty, and far fewer logistics headaches.
Read on to learn the ins and outs of finding your perfect 3PL provider and how to navigate the world of competing fulfillment companies.
What services do third-party logistics providers usually offer?
If you’re an eCommerce brand, a third-party logistics service provider supports your business’s unique needs in several key ways:
- Warehousing: When storing products in fulfillment centers, your 3PL provider should provide safe and secure warehousing. Depending on your merchandising, you may look specifically for 3PLs that accommodate standard inventory as well as seasonal stock and limited-edition items.
- Inventory management: Keeping track of all that inventory is no small task. A 3PL provider will often provide insights into current stock for inventory accuracy, which can help avoid overstocking or unexpected stockouts. 3PLs may employ warehouse management systems (WMS) to monitor stock in real time.
- Order fulfillment: Your service provider can handle order picking and packing, ensuring customers receive the items they’ve ordered quickly and without errors. Reliable 3PLs will have a streamlined eCommerce fulfillment process designed for efficiency and scalability.
- Kitting and labeling: A 3PL can assemble products and label them. This is particularly beneficial for companies that sell custom products that require unique product stickers.
- Shipping: Once items are packed, a 3PL can coordinate logistics for shipping and delivery. They’ll often have existing relationships with carriers, both domestic and foreign, to facilitate a seamless handoff, better rates, and faster shipping.
- Reverse logistics: When there are returns or warranty claims, your third-party logistics company can manage these reverse logistics, ensuring everything is transferred smoothly from shippers back into the appropriate warehouse.
When selecting a potential partner, don’t forget that this decision will impact your bottom line. The smoother your logistics run, the higher your customer satisfaction and overall efficiency. Happier customers produce more revenue, and better efficiency lends itself to higher profits.
Why choosing the right 3PL provider matters
Your 3PL partner has a lasting effect on your business’s success, affecting efficiency, satisfaction, and growth:
Impact on efficiency
Outsourcing your inventory management and fulfillment is, at its core, a partnership. Your 3PL partner will play a major role in defining your logistics process, including your overall costs and efficiency. Better responsiveness leads to faster fulfillment times, and high attention to detail reduces the risk of excess shipping costs due to delays or items picked incorrectly.
For example, if your business frequently experiences stockouts that impact shipping times, you could partner with a 3PL that uses an advanced WMS with real-time inventory reporting. That way, you manage your stock more effectively and reduce friction in the fulfillment process.
Shipping and delivery satisfaction
When customers browse eCommerce sites, they expect timely deliveries. A 3PL will have a defined service level agreement for picking, packing, and shipping items. Reliable 3PL providers will fulfill orders correctly and on time. When the right products reach your customers in a timely manner, they’ll be happier (and think more highly of your business).
But if your 3PL company caused shipping delays or sent an incorrect item, that happiness goes up in smoke.
Without this attention to detail, your reputation could be on the line. Though delays caused by your 3PL may be completely out of your hands, it’s your business that customers associate the delays and mistakes with. Unhappy customers may leave disappointed reviews, which ultimately reflect poorly on your company.
Scalability and growth
Your logistics needs will change as your business grows. Your 3PL provider should be able to accommodate your fluctuating needs and help you achieve that growth.
As your offerings expand or your inventory booms, you may need more storage space, more robust and specialized order fulfillment services, or greater supply chain management. Also, consider that this growth may not be constant. Seasonally impacted businesses, such as holiday decor stores that see rapid growth surrounding the winter holidays, may need to rapidly increase their services for a while before scaling back down for slower seasons.
An adaptable, attentive logistics partner can scale alongside you, whatever your specific needs.
5 of the most important factors to look for when choosing a 3PL
Selecting a 3PL to partner with isn’t a decision to take lightly. Because they can impact your business (and customers) in so many ways, you need to seek out the right fit for what your business actually needs—and what your customers expect. To do this, consider the following factors to evaluate when searching for a new logistics provider.
1. Specialization in your industry
Every industry has different requirements. Whatever your niche, search for a 3PL with a track record for servicing your industry.
Familiarity with your type of inventory allows a 3PL to be more reliable and less likely to mishandle stock, causing unnecessary damage. For instance, if you frequently sell high-value or oversized items, you’ll want a 3PL, like Red Stag Fulfillment, that’s equipped to manage and handle that inventory with care.
You’ll also want to consider any certifications or credentials a 3PL has when making your decision.
2. Technology and integrations
There’s more to a 3PL than its technology, but seamless integrations are critical for maximizing business growth. If a 3PL can’t interact with your existing systems (Shopify, Amazon, etc.), they won’t be able to effectively manage your inventory or communicate key metrics regarding stock availability. Managing your supply chain becomes much easier when your 3PL can use an API to sync your inventory, real-time orders, and tracking information.
It’s also wise to consider their internal systems. If a 3PL has a robust warehouse management system, you’ll reap the benefits of improved tracking, greater fulfillment visibility, and order accuracy.
3. Proven track record
Before you decide on a provider, check out service reviews to gauge customer satisfaction and general reputation. You’re ultimately looking for a dependable supply chain operations expert that can help you build your business. A 3PL with a history of timely, accurate fulfillment is a partner you can trust.
4. Cost structure
Few elements of choosing a 3PL hold more weight than the pricing structure. As you’re shopping around, a few key questions to consider include:
- Does the 3PL offer a preliminary consultation?
- Is pricing volume-based or a flat rate?
- Which services will you be charged for—all of them, or just the ones you use?
- Are there additional fees you should expect?
A cost-effective solution should be tailored to your specific needs. At Red Stag, we believe you should know exactly what you’re paying for and deserve a custom solution tailored to your business’s unique goals.
5. Customer service
A positive customer experience is largely in the hands of your 3PL partner. Because the 3PL’s timeliness and accuracy directly impact your customers, you want to work with a 3PL company that treats your customers like their own. This is why It’s beneficial to work with a 3PL with a dedicated support team that can get to know your business, rapidly resolve any fulfillment errors, and stay in frequent communication.
For instance, when launching a serialized limited edition item, you may need to work closely with your 3PL. In the event that a few orders get mixed up, you’d need to coordinate with your 3PL to receive the returned items and have them redistributed correctly. In a high-pressure situation like this, stellar customer service from your 3PL can help your team mitigate fallout.
Why Red Stag is a reputable 3PL partner option
We know you have options when it comes to your 3PL partner. Red Stag’s specialized expertise, accommodating technology, and dedicated team of experts make us stand out.
Expertise in specialized products
Not all inventory requires the same warehousing and handling. When you need to store and fulfill high-value, high-volume, or oversized items, Red Stag can help. Our proven track record as an award-winning fulfillment partner for specialty items speaks for itself.
When it comes to high-volume shipping, Red Stag 3PL guarantees there won’t be any inventory shrinkage—and if an inventory mistake does occur, we’ll cover the wholesale price so that your business doesn’t take the loss.
Accessible integrations
Whatever eCommerce platform you use, we’ll integrate with it. It’s that easy. Our technology solutions take the guesswork out of inventory management so that you can see real-time updates of your stock and plan accordingly.
Because we’ll connect to your platform through an API, orders are quickly and easily communicated. This automated workflow expedites shipping, getting your inventory out the door and into your customers’ hands faster than 3PLs that use antiquated systems that can’t easily integrate.
Integrations also make reporting key metrics easier. You’ll have reliable data at your fingertips in seconds, rather than having to wait for monthly reports.
Exceptional service and reliability
When you work with Red Stag, you can rest assured you’ll receive exemplary service from our in-house fulfillment experts.
Red Stag offers dedicated account representatives and hands-on, U.S.-based support. When you need assistance or have a question, we’re only a phone call away. Email is great, but some things are easier to hammer out one-on-one.
We prioritize accuracy and reliability, which keeps delivery timelines low and customer satisfaction high. Our guarantees include two-day receive, a zero-shrinkage policy, and paying customers back for late or incorrect shipments. Your business’s success is our success.
Key questions to ask third-party logistics companies
Industry
If a 3PL fulfillment company is familiar with your industry, it’s more likely that they understand your unique challenges and requirements, leading to smoother operations and better problem-solving.
- How many clients do you serve in our industry?
- What improvements have you helped companies in our industry realize?
- What industry-specific certifications do you have?
- How do you stay informed about the latest trends and developments?
- Can you describe industry challenges you’ve successfully navigated?
- How do you ensure agility to align with industry change?
Specialized services
Specialized expertise allows the best 3PL companies to tailor services to the specific needs of your business, resulting in improved efficiency and cost-effectiveness.
- What specific services do you specialize in?
- Can you share success stories related to projects similar to ours?
- How do you stay updated on industry trends and best practices?
- How do you approach unique challenges in this specialization?
- Can you elaborate on technologies or tools you use?
- What ongoing training and certifications does staff undergo?
3PL size and experience
The size and experience of third-party shipping companies can impact their ability to handle your volume, complexity, and potential challenges effectively.
- How long have you been in the logistics services industry?
- What is the size of your operation in terms of staff and facilities?
- How has your company evolved over time to adapt to changes in the logistics industry?
- Can you provide examples of projects that required significant scalability?
- In what ways does your experience translate into cost efficiencies for your clients?
- Can you provide references from companies of a similar scale to ours?
Accuracy rates and guarantees
Precision and reliability are crucial in logistics services to prevent disruptions, delays, and errors that can affect the supply chain. Your 3rd party fulfillment company should be able to clearly identify its commitments to accuracy.
- What is your track record for accuracy in order fulfillment and delivery?
- What measures are in place to handle unforeseen challenges to accuracy?
- How do you handle discrepancies after the fact?
- How do you monitor and continuously improve accuracy rates?
- Do you offer any guarantees of shipment accuracy or on-time deliveries?
- Can you share times when your commitment to accuracy exceeded client expectations?
Geography and distribution
A 3PL with a strategically located network can optimize transportation costs and reduce lead times. The best 3PL warehouse spaces are close enough to your customers to ensure two-day shipping without requiring you to stock an excessive number of facilities.
- Where are your primary distribution centers located?
- How do you optimize transportation routes to minimize costs?
- Can you provide examples of how your geographic positioning benefits clients?
- What strategies do you use to optimize last-mile delivery in different regions?
- What technology do you use to optimize last-mile delivery in different regions?
Network partners
A top 3PL company may have a robust network of partners to enhance services and flexibility, including complex transportation networks that can impact your shipment timing and accuracy.
- How does your 3PL company select and evaluate your network partners?
- Could you provide information about key partners in transportation and technology?
- How do you ensure seamless collaboration with your network partners?
- Can you describe a situation where your network partnerships resolved a critical logistics issue for a client?
Continuity planning
Unforeseen events and disruptions are practically inevitable in logistics. The best 3PL companies use effective continuity planning to minimize the impact on your supply chain.
- What measures do you have in place for business continuity and disaster recovery?
- How do you communicate and coordinate during emergencies or unforeseen events?
- How often do you review and update your continuity plans to adapt to evolving risks?
- Can you share examples of how your continuity planning has been tested?
- How do you involve clients in the continuity planning process to align expectations?
Scalability
When looking for third-party logistics companies, scalability may be one of the most important factors in sustainable growth.
- How easily can your 3PL company scale to accommodate increased volumes?
- What challenges might arise when scaling, and how do you address them?
- What technology does your 3PL company have in place for seamless scaling?
- How do you ensure that scalability does not compromise quality and efficiency?
- Can you share examples of clients who have successfully scaled with you?
Cost and cost efficiencies
No matter what stage your business is in, cost-effectiveness is a key factor in choosing the best 3PL for ecommerce.
- How does your 3PL company structure your pricing for different services?
- What key performance indicators (KPIs) do you use to measure cost efficiencies?
- How do you collaborate with clients to align on cost-efficiency goals and strategy?
- Can you provide examples of cost-savings you’ve implemented for other clients?
Customer service
The best 3PL companies have dedicated customer service help that involves personal relationships and ongoing, proactive support.
- What level of customer support do you provide?
- What steps do you take to address potential concerns before they escalate?
- How does your 3PL company handle and resolve customer complaints or issues?
- How do you gather client feedback for continuous customer service improvements?
- Can you share examples of situations where your 3PL company made a significant impact on client satisfaction?
Switching fulfillment partners can have a huge impact on your business, so it’s important to make sure the one you choose will be a good fit for the long haul. If you want to work with the best 3PL fulfillment company, take the time to get to know them first and decide if their business decisions are based on short-term revenue or long-term relationships.
Choose the right 3PL provider for your needs
With a dependable 3PL partner, you’ll see cost savings, higher customer satisfaction, and streamlined supply chain operations. Consider a provider who has experience in your industry, a proven track record, and aligns with your budget
Your needs are specific to your business, so it’s critical to choose the 3PL provider that suits you best. We know Red Stag Fulfillment might not be the best fit for everyone, but when it comes to reliable customer support for complex logistics solutions, we may be just what you need.
If you’re ready to smooth out the wrinkles in your logistics, reach out to start a conversation today.
