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What to Look for in a 3PL

Banner What to Look for in a 3PL

What is a 3PL?

3PL = Third Party Logistics

Third-party logistics in logistics and supply chain management is an organization’s use of third-party businesses to outsource elements of its distribution, warehousing, and fulfillment services.

Outsourcing of E-Commerce Logistic Processes:

  • Receiving
  • Warehousing - Inventory Storage
  • B2C Order Fulfillment (Picking, Packing, Shipping)
  • Returns
  • Order Prep
  • Bulk Inventory Shipment to FBA (Replenishment]

What to Look For in a 3PL

  • SIZE: Bigger is not Necessarily better
  • Do they have a website?

If they do not have a website avoid them. Legitimate 3PL and prep centers are real businesses.

  • Look Up their address on Google Maps

There are shady “prep” centers popping up by people trying to run them out of their garages or apartments. Your Inventory Is at massive risk at these places.

  • Do they understand the needs of an ecommerce seller?
  • Do they require a contract, or do they earn your business every month?
  • Research their reputation
(google reviews, other reviews, better business bureau)
  • Transparency-Read their terms and conditions Do they even have them?
  • Will they share their metrics? On time ship rate?
  • client retention rate?
  • Direct email

If they’re using a gmail account or some other anonymous email, avoid them.

  • What About International Shipping?
  • What is their Order Fulfillment handling time? Same Day up to 14:00?
  • Do they require an up-front deposit and a positive balance on your account vs 30 day billing.
  • Do they mark up Shipping?
  • Do they provide granular order detail and transparent costs?
  • What is their process for Shipping to FBA? Turnaround Time Commitment?
  • Do they Support and Manage Returns? If yes how?
  • Do they support Amazon FBA Removal Orders?

Multi Location vs Single Location

Pro

  • Closer to the Customer
  • Quicker Transit
  • Less Shipping Cost
  • Best for Few Skus
  • Best for large, heavy products

Con

  • Complex (Sounds Good but..)
  • Inventory Balancing
  • Shipping Cost To Realign Inventory
  • Handling Cost To Realign Inventory
  • Quicker in practice
  • Corporate

What to Look For in a 3PL - Location

Population Distribution USA

Map Showing USA States by Population

Population Growth USA

Map Showing Fastest Growing Population states in the USA

Major Transportation Arteries in the USA

USA map depicting major Highway Traffic Volume 823x617

East Coast Port Options

Distance from FBMFulfillment to various Atlantic Ports
Map from FBMFulfillment to JAXPORT

Advanced Features

  • Alternate Skus (FNSKU, GTIN, UPC, OTHER)
  • Virtual Bundling
  • Case Packs vs Each [FBA-FBM Hybrid]
  • Substitute Products
  • Lot Control
  • Online portal

Understanding 3PL Pricing

  • They should be able to provide pricing upon 1st request.
  • Is it Easy to Understand OR COMPLEX?
  • Be Cautious of fine print and hidden charges. Startup fees?
  • Webstore fees?
  • Bin fees? Other Fees?
  • Return Fees?
  • How do they define a pallet? Can you have multiple skus on a pallet?
  • Do they have limits on Skus vs monthly revenue?
  • Monthly minimums?
  • Packaging fees?
  • Label Fees?
  • Labor Fees?
  • Receiving Fees? Outbound Fees?
  • Do they mark up shipping rates?

Have Any Question?

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