5 Rules for Choosing a Third-Party Fulfillment Partner

Whether you work in a B2B or B2C field, you’re probably very familiar with the importance of warehousing, fulfillment, and shipping. These three areas can play an important role in the success (and sometimes survival) of your business. For some, working with a third-party to manage the day-to-day flow of inventory in these areas is an alternative that’s not only essential, but it’s beneficial, too.

What is a “Third-Party Fulfillment Partner” (3PF)?
From your customers and vendors, to even your employees, building strong relationships in business means everything. But, if you’re unable to meet the demands of your customer-base or need additional support, a third-party is a great way to alleviate some of the workload while maintaining brand integrity and service standards. And if they’re really good, they will be a seamless extension of your business and sometimes even act as your right hand. With that in mind, it’s important to find the one that will be the right fit. To help you find the Third-Party Fulfillment Provider (3PF) that will be the perfect fit for your business, we’ve created a list of 5 simple rules that can help you make the best decision.

An important rule about the 3PF’s location is that it needs to be positioned best to support your business. This does not mean they need to be near you, but they should be close to your customers. And logistically, the closer the 3PF is to your manufacturer, the less money you’ll have to spend on shipping costs. The great thing about 3PF’s in Midwestern U.S. states though, is that most of them can ship to any area in the Lower 48 within two-days.

Finding the right-sized 3PF can be a challenge. You don’t want it to be too big, you could get lost among other clients, as well as encounter an under-whelming responsiveness. On the other hand, if it’s too small the company may not be experienced enough to be able to work along-side you (vs. trailing along behind you). A good thing to think about: It’s important to find a 3PF that can meet your needs today, but also has the capacity and flexibility to grow with your growth.

A lot of companies are capable of fulfilling product orders, but is fulfillment the center of their business? Although mailing and printing are important, being successful in them does not necessarily equate to a great fulfillment partner. If fulfillment is the essence of the company’s business, they’ll be more in-tune and understanding of your needs, as well as having possible suggestions for how to improve.

If the 3PF has been in the industry for a long time, they should have a good grasp of best practices and when to apply them. If they are new to the industry, how did they get started? It may be that they’ve had the capabilities all along and it just made sense. Finding a 3PF that has been around to “see-it-all” and “do-it-all” can be a huge benefit. It means they may be able to bring not only a thorough knowledge, but a true understanding of your company’s needs when it comes to fulfillment. Simply put, if they’ve been around for a while there must be a good reason for it.

From the beginning of your partnership with them, the 3PF will need the capabilities to establish transferring your order data. It’s imperative they have the technology to receive electronic orders and can process them for shipping. Not only that, but confirmations that certain inventory has been shipped will help keep you and your customers informed. Bonus points if the 3PF can set up an eCommerce site. This capability would allow your customers (or employees, depending on the inventory your storing) to be able to place their order and then receive it with a quicker turn-around time.

What’s next?
Now that you know how to pick the right 3PF, it’s time to narrow down your list. You can start by asking them these qualifying questions:

  • Do they have clients that have needs like your own? Ask for a list of 2-3, if you feel comfortable enough.
  • What is the normal time from dock to stock?
  • What is the normal turn-around time from order placement to shipment?
  • Do they have real-time, online reporting for your inventory and orders?
  • Can they provide real-time data feeds regarding order status, if necessary?