In a saturated online marketplace, gaining a competitive edge is essential. To maximize the potential for repeat customers and maintain a healthy bottom line, sellers need to create a positive customer experience with a seamless ordering process from start to finish.
A satisfying shopping experience doesn’t end when someone enters their payment information. You have to follow through to the final stages with your delivery to attain excellence in customer satisfaction. Finding an efficient and experienced logistics provider can be the most crucial factor in defining eCommerce success or failure.
To help in your search for the ideal outsourced fulfillment partner, here are 16 questions to ask a logistics provider to gauge whether they are a good fit.
16 Important questions to ask a logistics provider
Do you have experience working with eCommerce businesses similar to mine?
This question is especially important for small businesses who sell less frequently, or individuals handling their own fulfillment currently. Although you can try to forecast, the pattern of many eCommerce sales is irregular. It is important to ensure the intended logistics provider can easily manage, fulfill, and report on your type of orders. You will want to establish that they can deal with irregular flows of inventory smoothly and efficiently and that they can handle increased demands as you grow.
Tip: Before discussing the requirements of your own eCommerce business, ask the logistics provider about the order fulfillment processes they already have in place. An ideal provider will have operations already similar to your own needs so that little disruption and adjustment is needed on either side.
What products do you support?
This question applies if you sell products such as batteries, perishables, or the like. Some fulfillment providers don’t support certain items, and may have stricter requirements for your type of good. Ask if they can handle your product, and what timeline you’re looking at for delivery speeds.
Do you have capacity constraints?
eCommerce is all about growth, so make sure your fulfillment partner can scale as quickly as you’d like when orders spike.
Understanding the methodologies and operational workflows of a logistics provider can provide insight into how they will meet your needs. A reliable fulfillment partner will have a sturdy Warehouse Management System (WMS) in place. This sets out the procedures and processes within their warehouse organization to maximize their workflow and operational accuracy. A well structured WMS should be able to easily handle the fluctuating demands of your eCommerce business.
Tip: Ask if they use shared-space warehousing, where they work with multiple customers in a single space. This will help you scale when needed.
Where are your warehouses?
Selecting a fulfillment provider who has a presence in your customer markets is key, because they will be able to get products to your buyers more quickly. Look at the geographical regions you make the most sales, and go with a fulfillment company with warehouses in that area. If your sales are nationwide, look for a partner with warehouses in strategic areas around the country.
Tip: Ask your fulfillment company if they will move goods to warehouses closest to your demand. This can help increase delivery speed to serve your buyers better.
What integrations do you work with?
Your outsourced fulfillment partner should be able to work with the software and marketplaces you want to work with. If your sales happen across several eCommerce channels, you will want to know that the logistics provider can efficiently manage your fulfillment needs.
Ask if they can meet the strict requirements of popular marketplaces such as Walmart, eBay, and Amazon. Since it’s important to eventually diversify any eCommerce business, this is a good question to ask even if you’re only selling in one place for now.
What is your pricing?
You must understand your fulfillment costs for whatever partner you work with. This is vital, and where the red flags should pop up for many 3PLs. We’ve seen many solutions that aren’t transparent with their pricing, so sellers aren’t able to calculate their costs until the bill arrives. Some of the typical 3PL fees include receive, storage, pick and pack, and shipping.
However, they also have some less obvious fees, like long zone fees and workorders, where they charge by the hour for everything you ask them to do that’s outside their normal services (ie. double check an order).
In the interest of keeping things simple, Deliverr only charges 2 fees: Fulfillment and Storage. These are all-inclusive and completely transparent.
Tip: Visit our cost calculator to find out what you would pay with Deliverr, Multi-Channel Fulfillment with Amazon, and a typical 3PL.
Will we get real-time inventory data?
An optimal logistics provider can offer real-time inventory management and immediate alerts on declining stock levels, regardless of the sales channel. Try to understand in advance what their procedure is when minimum stock levels are reached. You will also want to know if their inventory management systems can update customer shopping carts with actual stock levels in real-time. This will help you to forecast better, fulfill demands, and achieve happy customers.
What systems or processes do you have in place to ensure order fulfillment accuracy?
The customer, your brand, and your bottom line are all affected when incorrect orders are dispatched. A logistics provider with barcode scanners at several stages of the process can reduce the possibility for error. A dependable outsourced fulfillment partner should have airtight management controls and efficient warehouse tracking, facilitating better inventory and order accuracy.
Can we use your discounted rates with carriers?
The more resources your outsourced logistics provider has access to, the more you do too. And, just as your eCommerce logistics partner will forge a close relationship with your business, they will also have their own trusted suppliers and carriers. Many 3PL providers consolidate their shipping into larger freight, availing of discounted shipping rates, which they can pass on to eCommerce retailers.
How quickly can you fulfill items?
This question may seem obvious, however, it is a fundamental question which will affect the outcome of your business.
In addition to fast dispatch, you need an outsourced fulfillment provider that can give you access to fast shipping tags like Walmart Free 2-Day Shipping and eBay Guaranteed Delivery. Being on those programs help you stay competitive, and win the buy box. This is key for getting conversions without losing your profit margins.
Tip: A large part of order delays are caused before the order reaches the shipping handler. Therefore, you need to ask a prospective logistics partner about how quickly an order is processed, packaged, and dispatched once it is placed.
Do you support returns?
Returns are a requirement for some of the larger marketplaces, but not all providers support them. Check what your options are for customer returns, or consider asking returns to go directly to you instead of your fulfillment partner.
What’s your policy if you lose or damage my inventory?
Things get lost and break all the time, so make sure you know how your outsourced fulfillment partner will handle it. Ideally, they will take full responsibility, but some companies are vague about this. Check their website for information, or ask your customer support contact directly.
What happens if delivery commitments aren’t met?
As an eCommerce retailer, you will already understand that orders get lost in transit. Sometimes, delivery is delayed by weeks or even months due to logistical mix-ups. It is imperative that you fully understand the insurance policy offered by the logistics provider. Find out how claims can be made or disputes raised. This will allow you to make assurances to your customers with confidence, as well as ensure you are covered in case of lost merchandise.
How do you measure or track performance?
You will want concrete information to assist in managing your own KPIs. Information such as order fulfillment numbers, throughput, and quality assurance can help to identify what is working and highlight what requires improvement. Your 3PL provider should be able to present detailed reports easily on fill rates, fulfillment lead time, even percentages of orders needing reworking.
Can I get some referrals from other customers?
Getting testimonials from previous or current customers can speak volumes. It will be especially important to speak with other eCommerce brands like your own, as they could highlight specific problematic situations where this provider was able to offer solutions.
What’s your onboarding process?
Some fulfillment providers take weeks to get up and running, and time is money in eCommerce. Look for a solution that has a quick and easy signup process so you can hit the ground running.
These questions are designed to open a dialogue with possible outsourced fulfillment partners and will help you do comprehensive research to avoid making a bad fulfillment decision. Low cost is not always the better choice. Perhaps one logistics provider charges more for shipping but offers a stronger service in return. It is important to take the time to study all your options so you can make the best decision possible for this essential part of your eCommerce business.