How to Choose the Right Fulfillment Services for your E-commerce Business

Fulfillment Services –  Questions that will Help your Business Choose the Right Fulfillment Company

How long has the fulfillment services company been in business?

Most businesses fail within the first five years. Longevity of a fulfillment services company shows that management is committed to the company and can properly run their business. It is a much safer bet if the business is at least years old.

WHERE ARE YOUR FULFILLMENT SERVICES WAREHOUSES LOCATED IN PROXIMITY TO MY CUSTOMER BASE?

Due to today’s Internet technology and real-time reporting, proximity of your fulfillment services house to your customers is more important than the proximity of your fulfillment services house to your location. For example, if all of your customers are in the Northeastern United States, then hiring a fulfillment services company in California is not a good idea but, if most of your customers are in the East then New York, New Jersey, Pennsylvania or Maryland are good choices. Also, if most of your customers are in the West then Nevada, California, or Utah are good choices. As a point of reference, 70% of the US population is located in the Southeast, Northeast and Midwest with California housing approximately another 16%. If your order distribution is spread evenly throughout the country then Pennsylvania or Ohio are good choices to minimize shipping costs.

Does your fulfillment services center have a minimum and maximum volumes you will handle?

As far as maximum volume goes, in most cases, it is up to you to decide if the fulfillment services company has the room for your product and can handle it.  However, some fulfillment services companies have a minimum order amount. If you do not hit that minimum order amount then you may be charged with additional fees or they may not even want your business.

How big is your fulfillment services warehouse?

You want a fulfillment services company that has a warehouse big enough to accommodate your needs but not so big that you get lost in the shuffle and have to take your place in line after hundreds of other orders. Make sure you are able to get the attention and service that you require from your fulfillment services company. Flexibility is key. Virtually every company is concerned with whether or not the fulfillment services company they choose is able to handle the sudden huge influx of orders that will ensue as their business grows.  You want your fulfillment services company to be able to grow with you.  You need to probe the fulfillment services company to determine their views toward accommodating your growth plans. This is more important than worrying about the actual space they have available to meet your sales projections. Some fulfillment services companies are aggressive and look forward to helping customers meet their expanding needs. These companies have already thought about and made plans to address the needs of a customer’s growing business. However, some fulfillment companies are content to add your business but are not prepared to address the challenges and excitement of growth. In addition, be sure to ask what happens if business slows down. Fulfillment services companies want you to succeed. Your relationship with a fulfillment services company is a rare business circumstance in which your goals and their goals are completely aligned.  Choose a fulfillment house that easily accommodates growth and contraction of your business.

What insurance coverage will my fulfillment services company provide?

The fulfillment services company you choose should have full coverage to replace your inventory in case of fire, water damage, criminal theft, natural disaster or accidental damage. Ask them what coverage they have and what happens if your inventory is damaged.  It is not uncommon to ask for a hard copy or email copy of the policy once you have made your choice. The right fulfillment services company will not have a problem providing this to you.

Do fulfillment services have a guarantee in case there is a mistake?

Some companies in the industry provide guaranteed services. This is similar to a FedEx guaranteed of overnight delivery.  Fulfillment services companies can guarantee accuracy of the order or shipment time. Keep in mind that does not mean they ship all orders correctly. It means they hold themselves accountable for their mistakes. The best companies in the industry provide a 100% accuracy packaging guarantee and a 100% shipment guarantee within one business day or the order is free. They also provide additional guaranteed services, such as inventory accuracy. This is a good way to compare companies because if they are not prepared to offer you a money back guarantee this could indicate questionable reliability, and stability.

Which shipping companies does your fulfillment services use?

Typical choices for parcel shipments are UPS, FedEx, DHL and USPS. Many fulfillment services companies have multiple choices, but some only do business with one or two companies. It is always best to ask. The fulfillment services company should provide you with at least three different shipping options. If they are seasoned in the industry, then they realize that a labor strike could occur at any time with any company.

How much do your fulfillment services cost and what do I get?

This can be a complicated question since there is no standard billing practice in the fulfillment services industry. However, every company should take note of your needs and then provide you with a comprehensive estimate that includes detailed pricing. There are basically two types of charges. These are monthly recurring charges and fulfillment services charges. Monthly recurring charges occur regardless if you ship a package or not. The basic monthly charges you should be paying include; warehouse space, account management and software charges. Monthly recurring charges may fluctuate depending on certain variables such as how many pallets you are storing. These charges will be incurred each month regardless of order volume. Fulfillment services charges occur only when you ship a package. This includes pick and pack charges and materials associated with each order. They are directly correlated with order volume. Basic fulfillment services charges include; shipping, materials and pick and pack charges. Generally you should be able to verify all charges without relying on your fulfillment services company for an explanation. If the company has an hourly charge for activities such as receiving or assembly, be cautious, since it is almost impossible to verify the time and it is a practice that lends itself to over-billing.

How often do I pay you for your fulfillment services?

Ask how often the company plans to invoice you. Some companies make you pay weekly for shipping charges and some require you to pay in advance. Still others invoice you for all charges on a monthly basis.

Is there a long term commitment to fulfillment services?

Some companies try to lock you in to long term contracts. Long term can be suitable, but on occasion you will get locked in only to find the service is terrible. If a fulfillment services company requires a long term commitment, be sure that there is a way out of the contract. Better yet, find fulfillment companies that are committed to service and have short term renewable agreements or no commitment at all. If they are good at what they do and are committed to customer service, then they won’t require a long term commitment, and there are plenty of fulfillment services companies out there that do this.

Do you have daily backup and Is my information secure with your fulfillment services?

Your fulfillment services company has a record of all your shipment and customer data. This is your information and is very valuable. The fulfillment services company you choose should have daily server backups. In case your own server crashes, this also serves as a store of information.

Can your fulfillment services integrate with our Web site or existing systems?

Whether you need a stand-alone system or an integrated system, larger fulfillment services companies with advanced technology will easily be able to provide you with what you are looking for with minimum effort on your part. These IT systems should allow you to access your information over the web and allow those who require access to get the information they need in real-time.

How do you handle mistakes at the fulfillment services warehouse?

Even the best fulfillment services companies occasionally make mistakes. It is how the mistakes are handled that counts. The accuracy rate should be at least 99.5%. An error rate on packaging should be less than .5%. That means there should be less than 5 mistakes per 1,000 packages. When the fulfillment services company makes a mistake they should be willing to pay to correct it as well as refund your money in the original order.

Who will be handling my account at the fulfillment services warehouse and do I have a dedicated account manager?

You will need to know if there is a dedicated person who will be assigned to your account. This is a designated individual who you can call and has authority to act on your requests. If a call center or an account team is assigned to your account, then be prepared to wait longer for a response to your request. Furthermore, if you do have a dedicated manager, ask the company who your dedicated account manager will be and ask to speak to them directly in advance of making your decision.

Can I access my fulfillment services account information in real-time over the Web?

Advanced fulfillment services companies should be able to provide you with your entire inventory and order information in real-time over the Web. They should also be guiding you during the integration process with your website and providing you with access to dozens of real-time reports in any format you like. If they don’t have what you need then simply search elsewhere, there are good quality companies providing great technology for a very low price.

Can you provide three or more references for your fulfillment services?

Can the fulfillment services company provide you with references of satisfied customers? This is a vital step when you are in the process of choosing a fulfillment services company. If they are an accomplished company, they should be able to provide you with the names of at least two or three customers who, when you contact them, will simply rave about their service.   If a company cannot easily supply two to three references then pass immediately.

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