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Measuring Fulfillment Performance: How to Understand Processing and Receiving Promises

Jake Rheude

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Imagine this scene: You’re boarding an airplane, shuffling your way through the aisles, dodging people’s elbows as they stuff their luggage in the overhead compartment, hoping that you’re not seated next to the family with the crying baby. You reach your seat and buckle your seatbelt, providing a brief sense of relief after a long morning of playing “hurry up and wait.” A small sense of excitement begins as the captain announces that they’re sealing the door, and the gate retracts. You feel the plane awaken from its resting position at the gate and begin to roll back away from the terminal when suddenly the massive aircraft stops and sits.  

A few minutes turns into five, and five turns into 10. Your frustration grows as the minutes tick by, but you still sit. 


Who are your delays hurting? 

We’ve all been in this situation before. Sitting on a plane that’s left the gate to achieve “On Time” departure status, only to be stuck on the tarmac. It’s incredibly frustrating when you’re sitting there as the “package,” calculating how much less time you’ll have to make it to your connecting flight or wondering how long you should estimate the delay of your scheduled pickup at your final destination. 

While we focus on just getting to that destination, the reality is that we should judge airlines based on the “On-Time Delivery Rate” of your plane landing and docking at your destination terminal. But that wouldn’t likely make for very appealing statistics for the airline industry.  

Those same inaccurate measurements also plague the logistics world. Your warehouse or fulfillment center likely prioritizes just getting the parcel to its destination. This approach leaves your customers as the ones frustrated, sitting at the gate, and feeling mocked by the claimed on-time delivery rates posted on your website. So, if you’re serious about meeting and exceeding your customer’s needs, it’s worth looking at your fulfillment center’s measuring standards.

Are you at risk? 

Most 3PL (third-party logistics) firms attempt to provide performance standards they claim to operate under and meet. They’ll pair standards with contractual guarantees or service level agreements (SLAs). However, companies often write SLAs to benefit the 3PL by not being completely transparent. We often hear that what eCommerce companies think a 100% success rate means isn’t the same thing that the 3PL is promising. 

So, let’s look at a few things you should ask your 3PL to ensure you’re on the same page. 

How are cut-off times measured? 

While it may seem straightforward, you’ll want to know precisely how order processing guarantees are measured. That action impacts how effectively your parcels are shipped and how likely your customers will get their orders on time. 

You want to ensure that your 3PL delivers the package to a FedEx, UPS, or USPS distribution center on time. That’s the true measure of meeting an order processing guarantee. Don’t settle for a promise about a parcel being picked or packed by a specific time.

If your fulfillment partner has ever said they picked and packed a package, but delivery to the customer was still late, there’s a chance that the package pushed back from the gate but was stuck taxiing on the tarmac.

When this happens, how does your fulfillment partner make you whole? Are you still forced to pay for that shipment’s fulfillment fees? Do you get a discount, or are both you and your customer left frustrated? 

Red Stag Fulfillment customers know that this won’t happen to them. Not only do you not pay for the fulfillment fees, but we’ll pay you a $50 penalty, no questions asked. 

How is the receiving guarantee measured? 

In the same way that a departing flight shouldn’t be considered “on time” based on when it backs away from the gate, a plane that sits for an extra 30 minutes after landing, waiting to taxi to a gate, isn’t really on time picking up the next flight either.  

That’s how we recommend companies think about their receiving or inbound freight. Your forecasting team can spend months developing the most accurate sales forecasts and integrating these forecasts with your manufacturers and suppliers. Still, these efforts are in vain if your product isn’t received and offered for sale on time. 

Too often, pallets of products are “received” at the dock by a fulfillment partner but sit in the warehouse for days or weeks, waiting to be physically unloaded and placed on shelves. Delays can also be virtual if your partner is slow in updating your inventory counts. When that happens, you can experience more than just a temporary drop in sales. Long delays can push customers to a competitor, harming your long-term viability. When your competitors provide a better buying or fulfillment experience, your business suffers. 

Ensure that your fulfillment partner’s  receiving guarantee  includes a clause that new inventory must be stocked and uploaded as “For Sale” within a specified time. This is especially important if your website integrates a live inventory availability feature. Red Stag promises to do this within two business days, or we pay you for the inconvenience.

What would you do with 30 days? 

Red Stag’s fulfillment services are here to help eCommerce companies expand their capabilities and reach customers more quickly. Our goal is to help you take off and reach that return gate on-time, every time. Beyond making guarantees designed to give you peace of mind, we also provide a 30-day trial. Test our services risk-free and experience the RSF benefit with no long-term commitment required. We think it’s time you got off the tarmac.

Editor’s note: This blog was updated on March 24, 2021, to reflect current guarantees offered by Red Stag Fulfillment.

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Red Stag Fulfillment is a 3PL founded by ecommerce operators, and built for scaling businesses.

A team of fulfillment fanatics who care about our clients’ businesses like their own. We see things from our customers’ perspective, and have the guarantees to prove it.

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