How to Evaluate a Fulfillment Partner

How to Evaluate a Fulfillment Partner

Deciding on any business service takes a thorough evaluation and trusting a third-party to handle your company’s fulfillment process is no exception. For an e-commerce company, this can be an especially difficult decision as the fulfillment company will be handling receiving, picking, packing, and shipping to your customers. The following tips will help in your decision:

Experience
Experience goes a long way when it comes to fulfillment companies. When a fulfillment company is managing orders for several companies simultaneously, they need to have the right technology, employees, processes, and experience to get it done correctly. If you have a product that has very specific packing or shipping requirements, finding a fulfillment partner with experience in these types of products is key.

Scale
Perhaps you are a start-up and hope your sales will skyrocket in the upcoming months. Or maybe you are a company that does 75% of your business during the holiday season. Ordering cycles can be cyclical, so your fulfillment company needs to be able to scale up or down accordingly. The following questions should be asked:
• How do you handle the holiday rush?
• What happens if we expand SKU’s?
• Do you scale your workforce accordingly? Or, are extra hours added?

Price
Remember that choosing a fulfillment company to work with should not be made on price alone, because sometimes you get what you pay for. While you might want to get a good deal, this is an investment for your business. You should always find out exactly what is included in the price you are quoted. If it costs more to get the most efficient packing with the best tracking, it is money well-spent.

Technology
A fulfillment provider cannot function efficiently without updated technology. Orders should be pulled automatically from all channels. They should also be able to send tracking and inventory numbers to you so you can manage inventory. Tracking emails to customers should also be sent automatically.

Road Trip
Once you have narrowed down your choices for a fulfillment partner, take a trip to go and see the facility. Only a visit to the facility will give you a sense of how the company operates. It’s important to note how the employees are managed and what incentives are in place for motivation of accuracy and efficiency. You should also take note of the systems that are in place for efficient order fulfillment.

Define KPI’s
Once you choose a fulfillment provider, KPI’s (key performance indicators) should be used to assess their performance. KPI’s should be defined in detail before the third-party begins handling your fulfillment. KPI’s that are logged can give information about storage, packing, handling, and shipping. Measuring KPI’s can give you an idea of how efficiently your orders are being fulfilled and shipped. If a fulfillment company does not have a tracking system, it is best not to work with them.

As the e-commerce market continues to change, retailers will be using how quickly and efficiently orders are fulfilled to create a competitive advantage. A fulfillment partner that can scale with you is necessary as your business grows.