Running a successful Shopify store involves much more than just creating a visually appealing website and offering quality products. As your business grows, efficient order fulfillment becomes paramount to provide exceptional customer experiences. This of course is where the operations side of eCommerce comes together. Normally the SKUSavvy blog is focused on those Shopify stores doing their own fulfillment in their own warehouse (or garage, or basement) because that's where a system like SKUSavvy can help. But, what if you aren't fulfilling your own orders? This is where third-party logistics (3PL) services come into play. In this guide, we'll explore the essential steps to finding the right 3PL for your Shopify store, ensuring smooth operations and satisfied customers.
A third-party logistics (3PL) provider is a company that provides logistics services to other businesses. These services can include warehousing, inventory management, order fulfillment, shipping, and returns.
There are many benefits to using a 3PL. 3PLs can help your eCommerce business to:
Scale your operations: As a business grows, it can be difficult to keep up with the demand for products and services. 3PLs can help businesses to scale their operations by providing the necessary warehousing, inventory management, and shipping services.
Reduce costs: 3PLs can help businesses to reduce costs by taking over the day-to-day logistics operations. This can free up businesses to focus on their core competencies.
Improve efficiency: 3PLs have the expertise and experience to help businesses improve their logistics operations. This can lead to faster order fulfillment, lower shipping costs, and improved customer satisfaction.
Free up resources: Using a 3PL can free up businesses to focus on other areas of their business, such as product development, marketing, and sales. This can help businesses to grow and become more competitive.
Expand your footprint: A 3PL often will have more than one location so with customers around the country or the globe you can ship your orders out from the closes location to the customer
Third-party logistics (3PL) providers can take care of a variety of tasks for eCommerce brands, including:
Warehousing: 3PLs can store your products in their warehouses, which can help you to save space and reduce costs.
Inventory management: 3PLs can track your inventory levels and order new products as needed, which can help you to avoid stockouts and ensure that you are always meeting customer demand.
Order fulfillment: 3PLs can pick, pack, and ship your orders, which can free up your time and resources so that you can focus on other aspects of your business.
Shipping: 3PLs can negotiate shipping rates with carriers and ship your orders to customers, which can help you to save money on shipping costs.
Returns: 3PLs can process returns for your customers, which can help you to improve customer satisfaction and reduce the number of lost sales.
When choosing a 3PL for your Shopify store, it is important to consider your specific needs and requirements. Some factors to consider include the size of your business, the volume of orders you process, the types of products you sell, and your budget.
Before we delve into the process of finding the right 3PL partner for your Shopify store, let's understand why it matters. A reliable 3PL provider can bring significant benefits, such as:
Scalability: As your business expands, a capable 3PL can handle increased order volumes, warehousing, and shipping efficiently.
Time and Cost Savings: Outsourcing fulfillment tasks allows you to focus on core business activities, while the 3PL takes care of warehousing, inventory management, and shipping, reducing operational costs.
Expertise and Technology: 3PL providers often possess the expertise and advanced technology systems that streamline fulfillment processes, ensuring accuracy and timeliness.
The first step to finding the right 3PL is to assess your specific fulfillment requirements. This assessment will help you identify the capabilities and services you require from a 3PL partner. Consider factors such as:
Order volume: How many orders do you typically process each month?
Perishable items: Will you require your inventory to be lot traceable with various storage temperatures?
Shipping destinations: Where do your customers live?
Product types: What types of products do you sell and does the Shopify 3PL support this?
Special handling needs: Do any of your products require special handling?
Order channels: You should consider what order channels need to be connected with your 3PL and whether or not the 3PL supports these channels
Customer segment: Will your 3PL ship your products to wholesalers or retailers?
Packaging types: How will your product be sent to the 3PL? How will your 3PL need to send it out, is it standard box sizes or custom? Do you require any additional delivery instructions or gift wrapping?
Once you have a good understanding of your fulfillment needs, you can start researching potential 3PL providers. There are a number of resources available to help you with this, such as:
Online directories: There are a number of online directories that list 3PL providers. These directories can be a great way to find a few potential providers to start your research.
Word-of-mouth: Ask other Shopify store owners for recommendations. They may be able to share their experiences with different 3PL providers, which can help you narrow down your options.
3PL provider websites: The websites of 3PL providers can provide you with a wealth of information, such as their services, pricing, and capabilities.
Check reviews websites for the 3PLs you shortlist as this can provide quite a bit of information. Consider that 3PLs also do not typically get a lot of fanfare and many reviews may be biased and only left after someone has had a bad experience but previously has years of good experience.
Check primary sources such as current and past clients of the 3PL
We recommend working with Fulfill.com for your 3PL search who identifies your needs and pairs you with the most relevant 3PLs
Compatibility between your Shopify store and the 3PL's technology systems is crucial for seamless order processing. As you research potential 3PL providers, be sure to evaluate their technology and integration capabilities.
Some key factors to consider include:
Does the 3PL integrate with Shopify? This is essential for ensuring that orders are processed seamlessly between your Shopify store and the 3PL's systems.
What other tools does the 3PL integrate with? If you use other tools for inventory management, shipping, or customer service, you will want to make sure that the 3PL integrates with those tools as well.
What is the downtime they have experienced? Asking this question will provide you an answer to how well the 3PL plans for minimizes the amount of downtime disruption.
Will the 3PL provide a portal to view your inventory, place inbound deliveries, see order status and provide notes
How robust are the 3PL's technology systems? You want to make sure that the 3PL's technology systems are reliable and can handle the volume of orders that you expect to process. This includes a WMS such as SKUSavvy, shipping software, and automation software for the storage and retrieval of goods as well as shipping.
The proximity of the 3PL's warehouses to your customers' locations plays a significant role in reducing shipping costs and transit times. As you research potential 3PL providers, be sure to evaluate the geographical coverage of their network.
A widespread network allows for faster and more cost-effective delivery options. You will also want to consider the 3PL's shipping options. Do they offer the shipping methods that your customers prefer?
Finally, you will need to review the pricing structure and contract terms of potential 3PL providers. There are a number of different pricing models that 3PL providers use, so it is important to understand how each one works.
Some common pricing models include:
Per product movement: Its typical that the 3PL will charge based on various movements your products will go through. 3PLs might charge for customs clearance, check-in, put-away, cross-docking, and picking
Per-order pricing: This is the most common pricing model. You pay a set fee for each order that the 3PL fulfills.
Per-unit pricing: This pricing model is based on the weight or size of the products that you ship.
Monthly subscription: This pricing model includes a fixed monthly fee, plus a per-order or per-unit fee.
You will also need to review the contract terms of potential 3PL providers. These terms will typically specify the length of the contract, the cancellation policy, and any penalties for early termination.
Finding the right 3PL for your Shopify store is an important decision. By following the steps outlined in this guide, you can identify a reliable partner that meets your fulfillment needs, enhances operational efficiency, and contributes to exceptional customer experiences.
Here are some additional tips for finding the right 3PL for your Shopify store:
Get multiple quotes from different providers. This will help you compare prices and services and find the best fit for your business.
Talk to other Shopify store owners who use 3PL providers. They can share their experiences and give you recommendations.
Make sure the 3PL has a good reputation. Check online reviews and ratings to see what other customers have to say.
Ask the 3PL about their security measures. You want to make sure that your data and inventory are secure.
Get everything in writing. This includes the pricing, contract terms, and any other important details.
Reach out to Fulfill.com for free services to pair you with just the right 3PL