5 Factors to Consider When Evaluating Third Party Logistics Companies for Your Ecommerce Business

Logistics Companies

Does 3PL make sense for your online business? Here are 5 factors to consider when evaluating third party logistics companies for your ecommerce store!

 

Today, there are hundreds of third-party logistics service providers. The key is to find and choose a 3PL which handles your type of business and can provide you with a platform for efficiency and growth.

However, the 3PL is not for everyone, even though you’ll found it to be helpful while delivering excellent customer service. In this article, we will share 5 factors to consider when evaluating third party logistics companies for your ecommerce business.

It is important to determine each company’s value and how they match up to your business needs. Some of the essential factors to consider are:

  • System functionality to support your sales channels
  • Strengths in both B2C and B2B fulfillment
  • Value-added services you need including assembly, kitting, personalization, and etc.
  • Years in service, reliability, and stability,
  • Fulfillment flexibility and scalability as your ecommerce business grows and develops

Identify your business requirements and consider these 5 factors:

  1. Compare operational costs: We recommend you to analyze the costs for the 12-month period to calculate the fully loaded cost including direct and indirect labor, fulfillment management, total occupancy, IT processing, and etc. You can also include projected growth grates for 3-5 years out.
  2. Inbound and outbound transportation: Will using third party logistics companies contracts save you money? Will 3PL facilities reduce time in transit and hopefully provide you with other benefits? Will ground transit enhance your service levels and cut down your expensive overnight services?
  3. Avoid capital expenses: When using 3PL companies what investments can be avoided? For example, for one company, partnering with 3PL service providers meant avoiding the costs for replacing an old order processing system.
  4. Check references: You can ask for references for your type of business, company size, as well as, future growth projections. You can check out some of the current and old clients.
  5. Visit the website: Visit the websites of the third party logistics companies you are planning to use, especially the companies being proposed for your type of business. Schedule a consultation and discuss about what the company can do for your ecommerce store.

3PL is a great strategic option when looking to create a platform that can improve your level of service and handle your business growth.

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