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Think of a 3PL provider as your business's assistant. They can help take care of tasks like order fulfillment, shipping and handling, and inventory management. When it comes time to choose a 3PL provider for your business, there are a few key questions you'll want to ask them first. Here are thirteen of the most important ones!
1. What Are Your Capabilities And What Can You Handle For Me?
This is the first question you should ask any 3PL provider. You need to know what they are capable of and if they can handle all your needs. If not, you will need to find another 3PL provider that can.
The importance of this question can not be understated. Ensure you are clear on what your 3PL provider can and can not do for you.
Inventory management: 3PL providers can help you with inventory management, including stocking levels, order fulfillment, and returns.
Shipping and logistics: 3PL providers can help you with shipping, including quotes, transit times, and tracking. They can also help with logistics, such as route planning and freight forwarding.
Customer service: 3PL providers can help you with customer service, including order taking, returns, and refunds.
Fulfillment & shipping: 3PL providers can help you with fulfillment, including picking, packing, and shipping orders. They can also help with shipping, including quotes, transit times, and tracking.
Returns processing: 3PL providers can help you with returns processing, including management, refund processing, and restocking.
Related: Warehouse Service Provider Comparison: Internal vs. 3PL
2. How Do You Price Your Services?
3PL providers typically charge either a per-order fee or a percentage of the total order value. Be sure to ask how they price their services so you can compare apples to apples.
Per-order: 3PL providers will charge a flat fee for each order they process.
Percentage: The providers will charge a percentage of the total order value for each order they process. The prices computed by 3PL providers can vary depending on your required services and the volume of orders you have.
Services Type: 3PL providers offer various services, from order fulfillment to shipping and logistics. Be sure to ask what services they provide and how much each cost.
Volume of Orders: 3PL providers typically charge less for orders if you have a higher volume. Be sure to ask about volume discounts to get the best price.
Factors Considered when Pricing
3PL providers will consider various factors when pricing their services. These can include the type of product, the shipping destination, the weight and dimensions of the product, and more.
Type of Product: 3PL providers will charge different rates for different kinds of products. For example, they may charge a higher rate for perishables than non-perishables.
Shipping Destination: 3PL providers will also charge different rates depending on where the product is shipped. For example, they may charge a higher rate for international shipping than domestic shipping.
Weight and Dimensions of Product: 3PL providers will also consider the weight and dimensions of the product when pricing their services. Heavier and larger products will typically cost more to ship than lighter and smaller products.
3. Do You Have Experience In My Industry Or With My Type Of Product?
If the 3PL provider has experience in your industry or with your type of product, they will be better able to understand your needs and provide a higher level of service.
Here is the Type of Products 3PL providers typically have experience with:
Auto Parts: 3PL providers with experience shipping auto parts will have a good understanding of the unique needs of the automotive industry.
Food and Beverage: 3PL providers with experience shipping food and beverage products will have a good understanding of the unique needs of the food and beverage industry.
Healthcare: 3PL providers with experience shipping healthcare products will have all the value-added services the 3PL provider offers so that you can take advantage of the excellent understanding of the healthcare industry's unique needs.
Related: eCommerce 3PL: Difference Between The Pros And The Posers
4. Are You Able To Provide All The Transportation And Logistics Services I Need?
3PL providers offer a wide range of transportation and logistics services. Be sure to ask if they provide everything you need so you can get the most out of your 3PL provider.
Air Freight: 3PL providers that offer air freight services can ship your products faster than those that don't.
Ocean Freight: The 3PL providers that offer ocean freight services can ship your products more cheaply than those that don't.
Ground Shipping: Offer ground shipping services and can ship your products to more places than those that don't.
Related: Land, Air, or Sea: Picking the best freight option
5. Can You Share A Case Study Or Some Information About How You Helped Another Company Achieve Success?
A case study can give you a good idea of what to expect from a 3PL provider and how they might be able to help your business. Type of information to be shared in the case study:
Services: Include the 3PL provider's services in the case study so readers can get a good idea of what they offer.
Experience: Be sure to include the 3PL provider's experience in the case study so readers can see how they've helped other companies succeed.
Results: Make sure to include the 3PL provider's results in the case study so readers can see what kind of success they've achieved for other companies.
6. What systems do you have to ensure quality control and on-time delivery?
You need to know that your 3PL provider has the systems to ensure quality control and on-time delivery. This includes things like order tracking, inventory management, and communication protocols.
Order Tracking: 3PL providers should have a system to track orders from start to finish. This way, you can ensure that your products are shipped and delivered on time.
Inventory Management: 3PL providers should have a system in place to manage inventory. This way, you can ensure that your products are shipped and delivered on time.
Communication Protocols: 3PL providers should have communication protocols in place to ensure everyone is on the same page. This includes things like email, phone, and text notifications.
7. What Are Your Areas Of Expertise, And What Can You Do For Me That Others Can't Do As Well Or At All?
3PL providers have a wide range of capabilities. Be sure to ask about their areas of expertise to ensure they are the right fit for your needs.
Fulfillment: 3PL providers that specialize in fulfillment can help you with things like order fulfillment, shipping, and handling.
Inventory Management: 3PL providers specializing in inventory management can help you with tracking your inventory, reordering products, and managing your stock.
Related: Popular Amazon Inventory Management Tools You Can Use For eCommerce Business
Transportation: 3PL providers specializing in transportation can help you with shipping, handling, and tracking your shipments.
Logistics: 3PL providers specializing in logistics can help you plan your route, schedule your pickups, and manage your delivery.
8. How Will You Help Me Improve My Supply Chain And Operations Processes To Become More Efficient And Profitable?"
An excellent 3PL provider will be able to help you improve your supply chain and operations processes to become more efficient and profitable. They should have a deep understanding of how your business works and be able to offer suggestions on how to make improvements.
Tips to Improve supply chain and operation processes:
1. Review your 3PL provider's proposal and ensure they understand your business.
2. Make sure your 3PL provider profoundly understands your industry and can offer suggestions on improving your processes.
3. Ask for case studies or references from companies they have helped become more efficient and profitable.
4. Get a demo of their software or systems to see how they can help you streamline your operations.
5. Compare pricing and services from multiple 3PL providers to get the best value for your money.
9. What Value-Added Services Can You Offer (E.G., Kitting, Assembly, Packaging)?"
3PL providers offer a wide range of value-added services that can help you save time and money. Be sure to ask about the value-added services they offer so you can take advantage of them.
Kitting: Kitting is a service offered by some 3PL providers that allow you to group products. This can be helpful if you sell products that are often purchased together.
Assembly: Assembly is a service offered by some 3PL providers that allow you to have your products assembled before they are shipped to you. This can be helpful if you sell products that need to be created before using them.
Related: How to use Kitting and Assembly in eCommerce fulfillment
Packaging: Packaging is a service offered by some 3PL providers that allow you to have your products packaged before they are shipped. This can be helpful if you want to save time on packaging your products yourself.
Customizing: Customizing is a service offered by some 3PL providers that allow you to have your products customized before they are shipped. This can be helpful if you want to add your company's logo or another branding to your products.
Custom Box Insert: A custom box insert is a service offered by some 3PL providers that allow you to have a custom insert made for your shipping boxes. This can be helpful if you want to add branding or other information to your shipping boxes.
Related: The Secret to Increasing Product Sales by Outsourcing Kitting Services
10. What Kind Of Security Does The fulfillment Warehouse Have In Place?
It's important to know what security measures are in place at the 3PL provider's warehouse. This will help you ensure that your products are safe and secure while being stored and shipped.
Some things to ask about include:
Security guard on site: The 3PL must always have a security guard on duty to protect your products.
CCTV cameras: The 3PL provider's warehouse should have CCTV cameras installed to monitor activity and help prevent theft.
Alarm system: The 3PL provider's warehouse should have an alarm system in place to deter burglars and help notify authorities during a break-in.
A fence around the perimeter of the property: The 3PL provider's warehouse should have a fence around the property's perimeter to deter trespassers.
Background checks for all employees: The 3PL provider should conduct background checks on all employees to ensure they are trustworthy.
Other security measures in place: The 3PL provider should have additional security measures in areas, such as locks on doors and gates, to further protect your products.
11. What Is Your Understanding Of My Business Goals And How Will Your Solutions Help Me Achieve Them?"
It would help if you were sure that the 3PL provider understands your business goals and how their solutions will help you achieve them. They should be able to offer specific examples of how they have helped other businesses succeed.
3PL Industry Tools in understanding business goals:
Salesforce: 3PL providers use Salesforce to help manage customer accounts, sales opportunities, and support tickets.
Zendesk: 3PL providers use Zendesk to help drive customer support requests and tickets.
Freshdesk: 3PL providers use Freshdesk to help drive customer support requests and tickets.
12. Can You Provide Me With References From Other Customers Who Have Used Your Services In The Past?
References can give you a good idea of what to expect from a 3PL provider and how they might be able to help your business.
1. The 3PL provider may only give you positive references
The 3PL provider may only offer positive relations because they want you to choose them. Be sure to ask follow-up questions to get a more well-rounded idea of what the 3PL provider is like.
2. The 3PL provider may only give you references from companies that are similar to yours
The 3PL provider may only give you references from companies similar to yours. This is because they want you to know they have experience working with businesses like yours.
3. The 3PL provider may only give you references from companies that have used their services for a short period
The 3PL provider may only give you references from companies that have used their services for a short period. This is because they want you to know that their services are effective and can help your business succeed.
4. The 3PL provider may only give you references from companies that are located in the same region as you
The 3PL provider may only give you references from companies located in the same region. This is because they want you to know they have experience working with businesses in your area.
5. The 3PL provider may only give you references from companies that have used their services for an extended period of time:
The 3PL provider may only give you references from companies that have used their services for an extended period. This is because they want you to know that their services are reliable and can help your business succeed.
13. How Do You Process Returns?
You need to know how the 3PL provider processes return so you can be sure that your customers will be happy with the process.
Returns Processed: The 3PL provider should have a process in place for processing returns. This process should be efficient and easy to understand.
Returns Handling: The 3PL provider should have a process in place for handling returns. This process should be efficient and easy to understand.
Damaged Stocks: The 3PL provider should have a process in place for handling damaged stocks. This process should be efficient and easy to understand.
Conclusion
So, now you know the thirteen most important questions to ask a 3PL provider when choosing one for your business. But what if you're not sure where to start? Or maybe you have some specific needs that aren't covered in this list. That's where our team at Simpl can help. We're experts in fulfillment and shipping, and we can take care of all the details for you so that you can focus on what matters - running your business. Contact us today to learn more about our services or get started with a free consultation. Thanks for reading!
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