A unique advantage is crucial in a crowded online marketplace. Therefore, sellers must create a seamless ordering process to convert more buyers into repeat customers. It also fosters a healthy relationship with your customer.
When a buyer pays you, their experience doesn’t end. The shipping process must also be hassle-free for them to get excellent service.
A reliable and experienced 3PL (third-party logistics) partner is crucial to any eCommerce business.
Here are some questions you can ask a potential 3PL partner. From here, you can assess whether their service will be a good match for you.
1. Is there a minimum or maximum volume requirement?
A fulfillment partner should provide you with a range of the number of orders it can fulfill. Many companies will slow you down if you do not meet minimum requirements. Some limit your growth by not allowing you to exceed the predetermined volumes. Find a business partner who will help you grow.
2. Are contracts required?
It is common for 3PL providers to lock in customers for periods. It allows them to plan their revenue generation more effectively.
Most companies need a letter requesting to terminate a contract. It usually lasts 30 days before the letter takes effect.
It’s possible to get penalized for the early termination of a contract. You can incur a steep penalty if you end the contract much sooner than the date that was initially agreed upon.
Before entering into any agreement, ask if the 3PL provider requires a contract. Ask for a full disclosure of the contract if you need to work with them. You may find exception clauses there that could help you if you’re not satisfied with their service.
3. Does this contract last for a long time?
You should never sign a long-term contract if there is no exit option. You can be stuck with an unacceptable service for a long time.
If possible, get a short-term contract that is renewable or a month-to-month contract.
4. How can I pay for your services?
Many companies charge weekly shipping and fulfillment fees. Other companies charge monthly, and some combine both.
Don’t use companies who require you to pay up-front. Instead, look for companies that let you pay with a credit card or debit.
5. Which shipping companies do you use?
A good partner will offer a wide range of options. A good company should provide you wi at least two to three options. Problems are unavoidable with shipping companies. It’s essential to have other options in case one fails to deliver.
6. What products does your company support?
All fulfillment service providers support various items. However, a particular type of item may have an indifferent set of requirements. Inquire if they can handle your goods or product and the possible delivery timelines.
7. How much do you charge?
Whichever you choose, you need to be aware of the fulfillment costs. It is a crucial step and should look for potential red flags. For example, some 3PLs aren’t transparent in pricing. Sellers cannot calculate it until the bill arrives. Thus, it’s good to ask for transparency in pricing before signing any contract.
8. Are you able to fulfill orders quickly?
It is a critical question that will affect the outcome of your business.
There are times that fast dispatch times are not enough. You will also need an express shipping option like Walmart’s Free 2-Day Shipping or eBay Guaranteed Delivery. Do they deliver on weekends? Do they have overnight shipping?
These options can help you stay competitive. As a result, you can convert more customers without losing your profit margins.
9. Is there a guarantee for your services?
The service guarantee has become the industry norm in recent years. A service agreement should state how quickly your orders will be shipped and what will happen if they are not shipped on time. So, it’s essential to make sure you see their guarantee in writing.
10. Does my inventory with your company have insurance?
A good 3PL company insures their client’s inventory. This insurance includes theft, flood, fires, and damages.
Inquire about their coverage and how they handle claims. Ask them for a copy of their policy.
What kind of data do you collect, and how secure is it?
11. Are there warehouses?
The best fulfillment service company is one near your customer market. They can get your products to customers more quickly. Choose a fulfillment service that has warehouses in the regions where you sell most. If you have a nationwide operation, find a 3PL partner in strategic locations.
12. What is the size of your warehouse?
You should find a large enough warehouse to accommodate your anticipated growth. In general, it is a good idea to ask if they can accommodate triple your current needs. Also, ask what happens when you can only fulfill half of your volume requirement. Your fulfillment provider should be able to adjust as your business grows.
13. What information will I be able to access online?
You should be able to access such data through a secure web interface. It will allow you to keep track of your inventory and order information in real-time. In addition, the best fulfillment providers give you your data. It helps you keep your performance up and offer reports.
14. Are there dedicated account managers or a team?
The dedicated account manager serves as your business’s extension. They will act on your behalf and meet your needs and expectations. Talk to your potential account manager first before signing any contract.
While it’s great to have an account manager, some companies do not offer one. Therefore, a customer service team is the next best thing. With a team handling your request and inquiries, you can contact them anytime.
15. Can you accept returns?
Some large marketplaces require returns, but not every 3PL does. Make sure you know your options when a customer opts for a return. For example, you could ask them to send the returns to your office instead of the 3PL.
16. What if an error occurred?
You should hold your fulfillment provider accountable for their mistakes. Make sure that they will not charge you for shipping or fulfillment on error before signing a service agreement. In addition, the 3PL should retrieve the wrong item and reship the correct order at their expense.
17. What if there are failed delivery commitments?
Some orders suddenly get lost. This is a nightmare if you are an eCommerce retailer. Sometimes, logistical hiccups lead to delivery delays of months if not weeks.
Therefore, it is essential that you comprehend the insurance policy of the logistics provider. Get to know how you can file claims and how you can resolve disputes.
18. What if you end up losing or damaging my inventory?
Now and then, things break or get lost. Know how your outsourced fulfillment partner will handle these situations.
Ideally, companies should assume all responsibility, but some are not clear about this. Be clear on their policies and if they would be responsible when these things happen.