21 Questions to Ask Before Choosing a 3PL Provider for eCommerce
In today’s competitive market scenario, even an excellent business idea cannot guarantee success. If you are not providing a satisfactory experience to your customers, nothing really matters. For this reason, fulfilling orders quickly and in the right manner becomes even more crucial. While it can be difficult to do everything on your own, this is where the need for 3PL logistics for ecommerce emerges.
3PL logistics for ecommerce can have a tremendous impact on your business. It can take your business to the next level with the right practices of fulfillment. Moreover, it doesn’t even cost you a big sum of money to begin with. 3PL is a fulfillment service that exists outside of your business. You outsource them a handful of tasks such as shipping, inventory management among other things and they help you complete them with perfection.
In other words, 3PL logistics for ecommerce can give you the perfect fulfillment experience and take care of your orders like their own. While you can concentrate on making the big business decisions, your 3Pl service provider can ace the little details for you. 3PL forms a major part of your ecommerce supply chain, making it effective, faster and more efficient.
But, even with so much that a 3PL can do for you, it can be difficult to choose one. While there were hardly a few a decade back, the current market scenario has completely changed. With the cut throat market competition, there are more than a few 3PL logistics for ecommerce. And if you are just stepping foot in the market, all of this can seem a little daunting.
But, don’t worry, if you feel a little lost. We’re here to help you choose the best fulfillment provider for your business. Take a look below and get started today!
21 Questions to Ask before You Hire the Perfect 3PL Logistics for eCommerce
As you partner with 3PL logistics for your ecommerce business, you must start by asking questions. These questions must be from different areas of life, so that you understand the overall costs and value associated with a company. Remember that partnering with a 3PL logistics for ecommerce can be the difference between success and failure for your business. So, make sure that you evaluate any company on the following parameters well.
These are the basic questions to begin with, before you dive down into the specifics of the company. These help you understand how reliable the company is from an overall perspective. Remember that you must partner with a company that is doing well. Most new sellers end up partnering with any 3PL logistics for ecommerce that lures them. They do not ask the right questions and thus, end up damaging their business due to the negligence of the 3PL.
Ask them the following questions-
Does your 3PL have a Non-Disclosure Agreement that is enforced by partnering with them?
What are their hours of operation on a daily basis? Can you reach out to them on weekends?
What is their track record of financial stability? In other words, have they been in a stable business for at least the two years? Can they share the records or financial statements to support their answer?
While these might not seem like the big questions, it gives you a headstart into choosing the 3PL logistics for ecommerce. Understand that unless a business is doing well, there is no point in partnering with them. And this is because once you hand over the parcel to a 3PL for fulfillment, there is not much that you can do.
You have to rely on their services for delivery and satisfaction of the customers. And if any company has been in the market for long enough, they should be able to cater to these needs pretty well. In other words, if they are not financially stable, how are they going to help you take your business to the next level. Make sure you understand their working hours and whether you can reach out to them during the weekends. Because while it is understandable that a weekend is an off for most people, remember that your business still goes on.
The next series of questions that you need to ask is related to the volume of shipments. While you do need to evaluate the number of shipments you ship in a day or month, you also need to understand what happens to your 3PL.
This gives you a direct understanding of the potential they hold and whether or no they can handle the burden of your parcels well enough. For example, there might be chances that your 3PL reaches their maximum potential very soon. As a result there is no point in partnering with them if they cannot cater to you entire customers. Take a look at the following questions-
How many shipments do you receive from companies on a quarterly basis?
What is the number of shipments that you ship every month? Moreover, what is the breakdown of these shipments based on the business type?
When do you think you reach your maximum capacity and is there anything you can do to go beyond it?
These questions throw light on the more realistic issues companies can face with a 3Pl logistics for ecommerce. You might be shipping on;y 50 shipments a month. Therefore, it will be natural to think what has anything to do with the maximum capacity since any 3PL can ship 50 shipments.
But, remember that your 3Pl logistics isn’t exclusively catering to your needs. There might be other businesses they are partnered with, and therefore, several other shipments they’re shipping.
The next series of questions throw direct light on the performance of the company. In case your 3PL logistics provider claims to manage inventory, these questions become more important than ever. Remember that you might need to leverage their warehouses to ship orders to the customers in nearby areas and cater to their needs faster. Therefore, you need to ask them about their warehousing capabilities along with other factors.
One of the most important things to ask is the location of the warehouses. Make sure that their answer aligns with the requirements of your business. For example, if you are shipping from Delhi to Bangalore on a regular basis and receiving a lot of customer orders from there, you might need to leverage a warehouse in Bangalore. However, if your 3Pl doesn’t cater to the needs of your business at that particular location, it doesn’t make sense. Take a look at some of the questions below-
How has your capacity grown with time and how far is it from your business projections?
What is the number of warehouses that you operate?
Do they have a warehouse in areas from where you receive the maximum orders?
Which of the popular companies leverage their services?
Do they have a history of working with companies in your domain? Otherwise, what is their specialization?
What is their compensation for any delays in delivery?
Do they have a provision for express deliveries?
How do they handle seasonal inventory and orders in the peak season?
These questions might seem overwhelming, but are necessary before you make the big decision. Remember that you want to grow your business and your 3PL logistics for ecommerce must be able to help you with this job. Therefore, if they don’t handle modern customer requirements such as express delivery, peak season flow and others well, it might not make a lot of sense to partner with them.
Technology forms a key component of an efficient supply chain in ecommerce. While it might not be very relevant a few years back, today it has become fundamental for even small business owners. Understand that technology can help you earn a competitive edge in the market. And this is why you need to ask your 3PL logistics for ecommerce the following questions-
Do they integrate with your existing store?
Do they offer the provision of an API?
Can they connect to your independent ecommerce store?
What is the mechanism they use to import orders, send you notifications about new orders, shipping status and more?
Try to understand how easy their technology is to leverage for your business. You might not be able to do a lot, if you don’t get timely notifications about your orders etc. Moreover, if their platform doesn’t integrate well with your business, you don’t want to get into the hassle of shipping via an altogether new platform.
Most businesses jump onto asking the price in the first go. This is where they make the mistake. Remember that price is one of the last things to ask in a business. Not that it is the least important, but because unless a 3PL logistics for ecommerce is able to cater to the satisfaction of your customers, the other factors do not exist. When asking about the costs, make sure you understand the breakage well.
What are the costs included in the quote they have offered you?
Once you ask this question, get down to the details of the following costs-
Inventory receiving costs
Pick and pack fee
Set up fee
Minimum monthly orders
Another aspect of business that most sellers forget about is the experience post shipping the parcel. Remember that when you ship an order, your job doesn’t just end there. If you go an extra mile for the customer, they will remember you in the long run. Eventually, they will also come back to you for another purchase. Many 3PL logistics for ecommerce businesses offer this type of service where you can send a notification to the customer asking about their shopping experience. Alternatively, you might also be able to send personalized product suggestions. Therefore, you might want to ask-
Do you provide or are you willing to provide a post shipping experience to the customers?
Remember that ecommerce logistics can be a tough nut to crack, if not for your 3Pl logistics for ecommerce. For this reason, you must pay attention to the questions and begin by asking them. While you might need the support of a 3Pl instantly, don’t make a decision in haste. One of the best 3PL companies that have emerged in the market is Dash101. Not only do they have the lowest shipping costs but a dedicated key account manager to help you ship your parcels smoothly. In addition to this, there are no upfront costs or minimum spends required. Just get started and ship seamlessly to over 26000+ pin codes!