HOW TO CHOOSE A THIRD-PARTY LOGISTICS COMPANY
If you want to hire a logistics company, the first thing you’ll probably do is head to Google. If you’re lucky, maybe you have a friend or colleague who can make a few recommendations. Now, how do you choose the right one?
SIMILAR INDUSTRY SPECIALIZATION
More than anything, it comes down to finding the right fit. Just like every ecommerce system functions a little bit differently, so does every fulfillment company. Many of them specialize in certain industries or types of business.
“One of the most important things that business owners should consider when choosing a logistics company is specialization. There are a wealth of fulfillment companies out there—and each company has a unique focus.”
SIMILAR EXISTING CLIENTS
Try to find a logistics company that already works with businesses similar to yours. This is particularly true for ecommerce merchants who have their own sets of needs.
“For ecommerce merchants, choosing a company that has experience fulfilling ecommerce orders is vitally important. First, experience shipping these types of orders means that they will be able to do it accurately and timely. Second, as a strategic partner, they will better be able to assist you with any business challenges and might be able to offer advice that helps propel the business forward because they understand the nuances of ecommerce in general.”
Your best bet? Hop on the phone or send an email. Chat with someone one-on-one about your business. Don’t be afraid to ask a lot of questions, including asking for references. Most importantly, be upfront and clear about your needs so there are no surprises down the road.
Most common pitfall
According to Paul, the most common pitfall is choosing a company based solely on price. Although price is important, finding a company that is a good fit is just as important. Unhappy customers could end up costing more in the long-run.
“The biggest pitfall we see companies make is that many tend to judge a fulfillment company largely based upon price. Without a doubt, it is important to get a competitive price proposal from a logistics company. However, many companies choose a provider based solely upon price, only to find out that quality is absent from the equation. This can be very painful, when shipments are delivered without the proper items or are not delivered on time.”
Number one piece of advice
Not surprisingly Paul’s number one piece of advice is to do your due diligence when searching for a logistics company. Take the time to check them out, talk with them, make sure they’re competent, and be certain it’s a good fit for both of you. You really don’t want to have to switch companies three months later.
“Our advice for first time users of logistics services is to complete a detailed due diligence on each provider considered. A company can never be too careful to check out the claims of the logistics company and speak with customer and trade references in order to make sure that it is a legitimate operation. It’s very similar to trying to choose the best employee—taking extra time up front to make sure the best decision is made will pay dividends in the long run and avoid any potential pitfalls by having to switch providers or bring the entire process back in-house.”
This is especially true if you’re not sure about whether you’re ready to make the switch to third-party warehousing and fulfillment. As a potential customer, you can and should ask a lot of questions before choosing a company to work with. If it doesn’t feel like a good fit, don’t be afraid to say no.