Step 2
Do Your Homework
On this page
Having made the strategic decision to outsource fulfillment, the next crucial step is identifying the ideal 3PL partner.
But before diving headfirst into the selection process, a thorough self-assessment is critical. By clearly defining your unique business needs and requirements, you create a roadmap for informed decision-making, ensuring you select a 3PL that aligns with your long-term goals.
This section serves as a comprehensive guide to gathering your essential business requirements. Having this information readily available helps you to prepare for questions any 3PL is bound to ask, plus empowers you to ask insightful questions during the selection process, ultimately leading to a successful and long-lasting partnership.
Budget and Growth Projections
- Current Revenue & Order Volume: Start by outlining your current financial landscape, including annual revenue and average order volume.
- Peak Seasonality: Identify your peak sales seasons and how they impact order volume.
- Projected Growth: Project your anticipated growth in revenue and order volume over the next 3-5 years. This allows potential 3PLs to understand your scaling needs and ensure they have the infrastructure to support your future growth.
- Order Costs: Analyze your current costs per order, including fulfillment, packaging, and shipping.
Order Fulfillment Dynamics
- Average & Peak Order Volume: Provide an overview of your typical order volume and any significant fluctuations throughout the year.
- Split Shipment Ratios: If a significant portion of your orders require split shipments due to inventory distribution, highlight this as a specific requirement.
- Average Distance to Customers: Knowing the average distance your products travel to reach customers can factor into shipping cost considerations.
Product Characteristics & Handling Needs
- Size, Weight, & Fragility: Outline the typical size, weight, and fragility of your products.
- Packaging Materials & Protocols: List all your current packaging materials (boxes, polybags, etc.) and any specific handling requirements, such as specialty tapes or dispensers needed for application.
- Temperature Sensitivity: Specify if any of your products require special temperature-controlled storage or handling.
- Special Handling Considerations: Do your products require assembly, kitting, or safe disposal of damaged goods? Clearly outline any needs unique to your business.
Warehouse Location & Network Considerations
- Target Markets: Identify your primary target markets and customer demographics.
- Current Warehouse Capacity: If you have existing warehouse facilities, detail their current storage capacity.
- Geographic Reach: Outline your desired geographic reach for fulfillment services, considering future expansion plans.
- Specialized Storage: Do your products require added security like secure areas or cages? Are there regulations such as FDA compliance requirements? List all that apply to your business.
Services Required: Go Beyond the Basics
- Order Processing & Pick & Pack: Determine the level of order processing and pick & pack services you require from your 3PL.
- Inventory Management: Specify your preferred level of inventory management support, including real-time inventory tracking, rebalancing, and reporting.
- Returns Management: Outline your desired approach to returns management, including processing, inspection, and restocking.
- Value-Added Services: Identify any additional value-added services you require from a 3PL partner, such as adding promotional inserts, labeling, gift wrapping, quality control, inspections, order splitting & consolidation, blind ship services, or safe & compliant disposal of unsaleable or damaged goods.
Technology & Scalability
- Integration with Existing Systems: Specify any existing systems you utilize (e.g., e-commerce platforms, CRM, or WHM) and the importance of seamless integration with your 3PL's technology.
- Scalability & Growth Accommodation: Ensure the 3PL's infrastructure and technology can adapt and scale alongside your anticipated business growth.
- Real-Time Data Access: Highlight the importance of real-time access to inventory data and order fulfillment progress for informed decision-making.
- AI-Powered Tools: If you're interested in leveraging AI-powered tools for inventory management, order fulfillment optimization, or carrier selection, mention this as a specific requirement.
Communication & Customer Service
- Responsiveness & Communication Protocols: Define your expectations regarding communication frequency and response times from your 3PL partner.
- Customer Transparency: Emphasize the importance of transparency throughout the fulfillment process, including order tracking information for your customers.
Industry Expertise & Experience
- Track Record & Reputation: Research the 3PL's experience and track record within your industry, specifically focusing on their ability to handle similar product types and order volumes.
- Understanding of Your Industry: Look for a 3PL partner who demonstrates a deep understanding of the unique challenges and opportunities within your specific industry.
Security & Compliance
- Data Security Protocols: Outline your data security requirements, including any required industry compliance certifications.
- Warehouse Security Protocols: Outline your specific security measures for handling your merchandise, including access control, mandatory attire or personal protective equipment (PPE) requirements, and any restrictions on employee clothing related to your brand.
2024 Fulfillment Guide Complete Outline
Copyright © 2024 Quiet | Privacy Notice | Terms & Conditions
