Logistics Criteria For Ecommerce Fulfillment

Sharing some thoughts on criteria for a 3PL fulfillment center

1. Identify Potential Partners Based on ability to integrate with your DTC
Commerce platform
 Does 3PL offers national fulfillment services at 3-day and 2-day speeds?
 Do they have the volume to handle current and planned demand at a location or mix of
locations that makes sense for us?
 Do they have international warehouse capabilities in Europe & Asia

2. How Much Capacity does Potential Partner have?
It is important to understand 3PL’s available resources for domestic as well as international
shipments and their ability to support the transition to DDP shipping terms that include the ability
to collect tariffs and duties at the point of sale.
Any potential partners must have the capacity for domestic and international as well as
transparent international solutions in specific regard to tariffs and duties.

3. How Much Of 3PL’s business Is ECommerce? LTL? FTL? International?
Amazon?
 Does the 3PL’s network match our needs? Is our growth relevant to their business?
 Does 3PL have focus on and expertise in FBA for Amazon as well as International and
domestic shipments? Can they facilitate expansion into Europe and abroad?
 Does partner have the ability to do international and domestic B2B and B2C fulfillment?

4. Who Are Top Carrier Partners, And Are Rates and Relationships Better?
 Rates impacts pricing so need to know if a 3PL negotiates with carriers for discounts or
lower rates and if yes, what those rates are. The more relationships a 3PL has with
different carriers, and the better those relationships are, the better our chance of getting
the best rate while keeping our customers happy.
 Identify preferred carriers for each classification of business both DTC and Dealer.
 Insure transparency in regard to duties and tariffs in billing and process.

5. How Easy Is It to access Real-Time Reporting?
 Our customer service, operations and IT team will want to know how easy it is to access
real-time reporting including integrations, where data is sent, and how multiple team
members can access this data.
o Operations needs to access inventory levels, freight data, turnover to track long-
term storage risks in order to forecast sales and manage orders.
o Customer support needs access to get real-time data on existing orders and
returns.

 Real Time Reporting is crucial.

6. What does 3PL guarantee, and what happens if there is an error?
What are a 3PL’s service guarantees for:
 Order accuracy.
 Inventory accuracy.
 Shrinkage
 Receiving time
 Fulfillment speeds

7. What’s the plan for reverse logistics and returns management?
Returns can either be a financial drain or a possible way to improve customer lifetime value. In
order to ensure the latter, accurate & timely fulfillment is essential.
NOTE: ECommerce companies face an average return rate of roughly 20%, potentially rising to
33% after the year-end holidays.
We need to understand and evaluate how a 3PL handles returns (B2C, B2B and Amazon), what
fees these include, and what steps they take to minimize returns. Scanning items and orders
multiple times throughout the pick and pack process helps to eliminate nearly all human error,
protecting revenue and inventory.

8. What’s The complete fee schedule?
Our immediate needs are outlined above and must be met.
Likely future needs include:
 account management or helpdesk – do they offer these and what are the fees involved?
 What charges are associated with storage? Can they accommodate pallets and bins?
 When do we pay more for different SKUs or multiple SKUs in an order?
 Can we include inserts, and what is the cost?
 Is kitting available?