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3 Secrets to Evaluating a Third Party Logistics Company

Sep 19, 2017 3:06:11 PM / by #Fulfillment

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The strive to make your ecommerce operation leaner, scale without inflating assets, and allow focus on core business practices naturally leads to third party logistics providers. Your fulfillment provider becomes the backbone of your private label products company and is tasked with keeping up with consumer demands.

You should start your search with detailed information requests that focus on expertise, scaling capability, technology, and culture fit. It is important to evaluate your provider’s financial soundness, environmental policies, and references. Also, gather information on the overall management style to ensure open communication.

Look for Expertise

Fulfillment providers specialize in different areas and you should look for one that fits your private label products niche. You should be able to use their expertise to scale your operation with limited friction. It is important to request references, facility tours, and demonstrations. Specific inquiries into label printing, overnight delivery, and just-in-time inventory can tell you a lot about your provider’s competence.

It is vital, your customers’ demands align with your fulfillment provider’s expertise. That is why you should aim for a logistics provider with proven track record in your market niche. You should look for a price-value balance that works for you and your customers. Timely product adjustments and response times on returns and exchanges are critical in order to meet ecommerce highest standards.

Vet Your Provider’s Capacity

Your provider will define a large portion of your customers’ experience and should be able to do that according to your specifications. Scaling your inventory and the ability to meet seasonal changes in demand and consumer trends is vital. Maintaining quality and responsiveness while scaling your operation to meet demand are critical for customer retention.

The qualities you should be looking for are dependability, flexibility, and delivery efficiency, even in surge volumes. Offering specifications from your operation like number of deliveries, number of items, and performance level required can help you evaluate a fulfillment provider. Providing future volume projections and testing responsiveness to requests can help you vet communication channels.

You should look for an integrated fulfillment solution that allows you to deal with one provider rather than a complex group of entities. It is important to assess the size of your provider – sometimes a well-positioned national firm can offer more value and personalization than an international player with little flexibility. You should vet not only capacity but also customization and technology infrastructure.

Evaluate Technology Infrastructure

A large portion of a fulfillment provider’s flexibility and scalability comes from the product management systems they use. You should evaluate the tech infrastructure of a potential partner. Customers demand ever-faster deliveries and response times, and a cutting edge order management system can be an advantage for your private label products.

An up to date input management system optimizes communication, minimizes errors, and boost your productivity by reducing service interruptions. Inquiring about inventory and delivery management platforms can give you insights into scalability and flexibility. You should ask if IT services are outsourced, which can lead to delayed responses to requests.

It is important to have an integrated warehouse, order, and transportation management system because customers have grown accustomed to being able to track their orders. If you are to stay competitive in the long run a forward-looking technology solution along your supply chain is a must-have.

Conclusion

Evaluating your third party logistics provider requires open communication in both directions. Once you settle on a short list of providers you should communicate to them why you are inclined to choose them and exactly what you expect from the potential relationship. You should form this strategic partnership with the provider that offers the best expertise, scaling capability, and technological integration that enhance your business model.

 

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Written by #Fulfillment

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