eCommerce Fulfillment 2020: What To Look for in a New 3rd Party Fulfillment Partner
With your Q4 selling season strategy finalized and the peak holiday rush not here quite yet, now is a good time to look ahead to your 2020 fulfillment plans.
If working with a new 3rd party fulfillment center is a likelihood for your organization in the new year, there are key considerations to keep in mind as you go through the vetting process. And choosing a fulfillment partner with extensive capabilities and experience is a must.
Choosing the Right Third Party Fulfillment Partner
Earlier this year, we broke down some of the key aspects to consider before choosing a new third party fulfillment partner:
- Location. A centrally-located facility in the middle of the U.S. can deliver value by offering faster shipping times to both the east and west coast, optimizing your days in transit. And the cost of working with a 3PL in the center of the country is less expensive than working an east or west coast provider.
- Shipping Rates. Be sure to discuss with any prospective 3PL how they secure the best possible shipping models for their clients. Ask for an overview of their process.
- Technology. The eCommerce fulfillment technology used by a 3PL will drive the success of the entire fulfillment operation. It’s important to understand the capabilities behind their technology and ensure you’ll have easy access to critical real-time data.
- Special Services. From kitting and assembly to subscription box capabilities, working with a 3rd party fulfillment provider that offers specialized value-added services allows you to create a more personalized and memorable brand experience for customers.
As eCommerce evolves, the above 4 aspects of fulfillment operations will continue to be essential. But there are other areas of expertise that an eCommerce fulfillment partner should have – and they’ll continue to grow in importance.
eCommerce Fulfillment Expertise
According to recent data from the U.S. Department of Commerce, Q2 2019 online sales in the U.S. increased by double digits. Retail eCommerce reached just over $146 billion – a 13.3% jump compared to Q2 2018 numbers.
Many companies find it increasingly difficult to manage their eCommerce order fulfillment internally. Their best option is to outsource their eCommerce fulfillment to a 3PL, which can offer valuable expertise in many areas.
Here are more ways a 3PL can offer fast, accurate eCommerce order fulfillment:
- Better Inventory Storage. When a company outgrows its warehouse space, stocking issues happen. Product shipments may take longer to get logged into your inventory management system. Is there a quick internal fix? Not typically. More space may need to be leased or bought. Or, a brand new warehouse might need to be built. Both options will take time to establish.
A company that chooses to outsource its inventory storage to a 3PL won’t need to invest time and resources in securing additional warehouse space, reconfiguring inventory, or hiring more staff to manage the operation.
Outsourcing to a 3PL also affords more flexibility, as warehouse storage space can be scaled up or down to adjust to inventory fluctuations that cycle throughout the year.
- Faster Delivery Times. It’s pretty simple – fast shipping is paramount to your fulfillment operations because customers expect it. Because of their established relationships with all the major shipping partners and their high volume of order shipments, an eCommerce fulfillment partner can almost always get orders to your customers faster – and at a lower cost.
Ask your potential 3PL what their track record is for cutting their customers’ shipping costs. Do they rate shop to find the most appropriate shipping method? Can they do a parcel shipping analysis to find you the best rate? Are they knowledgeable about DIM weight pricing? These are important questions to ask.
- Efficient Returns Processing. Order returns are unavoidable – they come with the eCommerce territory. But they don’t have to hurt your profits. Working with an eCommerce fulfillment partner that can deliver a cost-effective returns management program can make all the difference.
The most critical features of good returns processing include a seamless Return Merchandise Authorization (RMA) process; product inspection, verification, and tracking; credit reconciliation; product disposition; return labels for customers; re-packaging/re-stocking; repair and refurbishment; quality assurance; and recycling/replenishing.
It’s also important to have your return policy clearly outlined and prominently displayed on both your website and in customer communications (email, order packaging, etc.). Make the entire returns experience easy and user-friendly and you’ll keep your customers and gain future sales.
- Deep Analytics. Closely measuring the performance of your eCommerce order fulfillment process lets you know what’s working, and more importantly, where your vulnerabilities lie. It’s a critical part of your fulfillment operations that shouldn’t be taken lightly.
Choosing to work with a reputable third-party fulfillment partner can open the door to comprehensive reporting and real-time analytics that let you take a deep dive into crucial data on all sides of your business – your customers, orders, inventory, shipping costs, deliveries, and returns.
- Scalable Staffing. For most companies, their eCommerce order fulfillment process will go through a peak season and an off season. It can be challenging to scale staff accordingly between the busy and less-busy cycles.
Another advantage of working with a 3PL is you get scalable staffing. A 3PL can quickly staff up – often hiring seasonal temp workers to keep up with demand – when your sales are at their peak. A 3PL can also scale back when your orders slow down. It’s one less piece of the fulfillment puzzle you need to worry about!
About PFC – An Experienced eCommerce Fulfillment Partner
At PFC, our clients’ success is our #1 priority. Since 1974, our team has delivered outstanding quantifiable results, with turnkey solutions in eCommerce & web fulfillment, promotions, and contact center services – all backed by leading technology. Retailers and eCommerce brands that partner with PFC have historically achieved considerable cost savings in excess of 35% and have significantly improved their program ROI.