Many e-commerce sellers can be troubled by logistics, which is why they increasingly turn to the help of third parties. The higher demand for logistics outsourcing also stimulated the creation of many fulfillment companies.
However, not every 3PL provider can ensure that logistics work flawlessly and, most importantly, quickly. Therefore, before choosing a fulfillment partner, several important factors must be considered, which can move the e-shop one step ahead of the competition and at the same time satisfy customers.
These include, for example, the location, and equipment of warehouses, international delivery, a perfect information system, but also various additional services. For someone who is not familiar with logistics, it can be difficult to find the right solution to help their business.
However, there are some tricks on how to proceed when choosing the right fulfillment partner. These can be, for example, basic questions that you should know the answer to when outsourcing to a 3PL company.
1. Where is the warehouse located?
If you plan to sell goods to Eastern Europe, delivery from a fulfillment company in the West can be time-consuming and expensive.
The ideal solution for outsourcing logistics is a company operating in the center of Europe, with delivery to other countries on the given day of the order, for example, Bratislava. Regarding the location, it is also important to look at whether the fulfillment company is located near the main highways.
As a result of taking these criteria into account, delivery is significantly accelerated and the volume of sent shipments increases. In this way, the client can sometimes have the package delivered a day earlier.
2. What is the size of the warehouse, and do they have order limits? Do I also need fulfillment with my own warehouse?
Logistics is also outsourced due to insufficient capacity, so the fulfillment partner should ensure that there is space in the warehouse for your goods. A fulfillment provider may be limited by technology and work limits, and if they manage to solve your orders for one year, it does not mean that they will be able to deal with them for years to come as you grow.
Another interesting option for logistics outsourcing is so-called cross-docking, which is distribution based on immediate transshipment without the need to store goods. The goods arrive at the logistics partner’s warehouse, are immediately recorded to the system, sorted, packed, and sent to recipients across Europe, many times more efficiently and cheaper than when the e-shop organizes it itself.
3. How is the warehouse technologically equipped and how automated is the process?
Warehouse equipment is often a differentiating factor from the competition. Modern technologies reduce costs, speed up the process and prevent errors, which makes automation a significant advantage for e-shops in logistics.
Automation is also the answer to stronger periods of the season, where technology helps prevent delays. For example, if it’s the Christmas season and the fulfillment partner can’t handle the onslaught of orders, delays of several days occur, and the e-shop customer can switch to a competitor.
4. What is the error rate and what is the procedure if an error occurs? What quality measures take place during the fulfillment process?
The selection of a fulfillment partner should be accompanied by information on the error rate in the process. The error rate within the warehouse should be zero, but exceptionally, it happens that some errors appear, so it is also important to find out how the partner can deal with it.
Errors are mainly prevented by technologies and the set process supported by the warehouse information system. The question should therefore also focus on how control during the fulfillment process takes place, what the information system monitors, and how well it is programed.
5. How does delivery work? Is it international and how long does it take? Does the client have a robust cash on delivery solution?
Delivery is also an essential point when choosing a partner, whether it takes place only with the help of couriers or whether the company has its own international transport lines in combination with couriers for the last mile delivery. Diversification of delivery is also decisive, like how many collaborations the 3PL company has resolved for the given countries and under what conditions.
In the case of couriers, it is important to know what kind of delivery service they offer. At the same time, the shipment should travel to the customer within a maximum of 24 to 48 hours, as there is a risk of losing the customer in the future with a longer delivery.
In some countries in Europe, cash on delivery is still a very popular payment method. Even in countries where it is a minor form of payment, it can still be an interesting tool to reach the customer.
In this case, the task of the fulfillment partner is to ensure the complete processing of cash on delivery for the whole of Europe.
6. Can the fulfillment partner also handle seasonal and Monday peaks?
It is also important to manage seasonal and Monday peaks, which create a rush of orders and pressure not only on the warehouse and the process of dispatching goods, but also on delivery. Ideally, the fulfillment partner is prepared for these seasonal rushes months in advance, so there is no risk of delays or unnecessary mistakes.
7. Do they offer additional services, such as branding packaging, return management, or labeling?
Yes, even services that are above the standard can be considered when choosing a partner. These can be, for example, additional labeling of goods, packaging in branding boxes, adding various manuals, customer support, or management of returned shipments.
8. Can the information system be integrated with the e-shop or other e-commerce platforms?
The information system has other important functions than just ensuring the process in the warehouse. It also connects to the e-shop via an API so that order data can be transferred safely and without problems. It is also important whether it has its own information system and programming team.
In addition, in the e-commerce environment, there are various platforms, such as marketplaces, integration applications, and the like. Therefore, it is important to have an answer to whether the fulfillment partner also has integrations for other sales channels than just connecting the e-shop.
9. What data does the information system provide access to?
A necessity for the client is access to information, the basis of which is the connection via API. Here, the data is linked in real time between the e-shop and the fulfillment partner’s information system.
However, the extension can be a client interface, where the user can edit and add things, such as tickets and the like. At the same time, he can view information on the status of orders, how many goods he has in stock, their shelf life, the status of cash on delivery and returned shipments, and much more.
10. What services do they charge and how does payment work?
The fulfillment process contains many individual steps, which can create chaos on the invoice. Therefore, it can be an advantage if service packages are part of the billing, as this makes it easier to know what services you are using and thus be sure that you are not overpaying for anything.
This way, you will avoid a large volume of items on the invoice, and it won’t happen that you don’t know what they cost you or what you are paying for. In addition, the frequency of payments, or payment of cash on delivery, is important information that is worth knowing before signing the contract.
11. Do they have experience with clients who have similar products or needs?
Although each client has different needs, in some cases, the requirements or the types of products that are sold are quite similar. And thanks to this, you can make sure whether the fulfillment partner can provide logistics for your specific type of business, that is, whether they can work with, for example, electronics, textiles and the like.
12. How long have they been in the fulfillment business? What are their results and is their business stable?
Of course, a company proven over the years can often offer more. However, it is also necessary to look at the company’s results, for example, how it has been doing in recent years, whether they by chance going into bankruptcy, etc.
It is also good to know how much and what they are investing in to improve their services, which can be, for example, massive automation, expansion of the transport network and the like. A company that does not modernize and does not move forward is hardly an ideal and long-term solution for your logistics.
A complex logistics solution from Fulfillment by FHB Group
Why bother with logistics when professionals can handle it for you. Fulfillment by FHB Group has been in the market for more than 15 years, during which it has handled millions of shipments and relieved many e-commerce businesses of their worries.
The ideal location in the middle of Europe connects the East with the West and allows, through its own transport lines, to deliver shipments within 24 to 48 hours. Combined with courier companies for last mile delivery, we can get the package all over the world and at favorable prices, with the European cash on delivery solution, which is a big advantage.
Not only transport, but also the entire fulfillment process is overseen by a high-quality warehouse information system, which catches every error and helps manage our automated technologies. These include, for example, a fully automatic packaging line, which is, among other things, one of the fastest in Europe.
Clients have the opportunity to sell through various marketplaces thanks to a wide range of integrations with several e-commerce platforms. We will guide you through the entire process of integration with the Fulfillment by FHB Group services while we explain and answer all your questions.