3 Important Steps to Take When Choosing a Fulfillment Company

3 Important Steps to Take When Choosing a Fulfillment Company

The internet is abound with articles on how to choose the best fulfillment center but most of them are too broad, list only a few top ecommerce fulfillment companies and leave the bulk of the legwork to you. Yet getting set up with a fulfillment company is a big commitment of your time and resources, regardless of whether there are any upfront fees involved or term requirements, so it’s important to do your research to find the right partner for your business. We’ll walk you through the steps and things to consider to help you decide on a provider.

Step 1 – Evaluate Your Needs

The most important consideration when comparing fulfillment warehouses is how they match up to your specific requirements. Whether you are outsourcing your fulfillment for the first time, looking to replace your current service provider, or you are ready to distribute your inventory beyond your current distribution network, taking the time to assess your current and upcoming needs will help you identify the most important factors to consider for your business.

You’ll want to think about the following:

  • SKU counts
  • Order volume and consistency or seasonality
  • Product-specific requirements (ie perishables, fragile, high-value, oversized, assembly, high return rate etc)
  • Where your customer base is
  • Where you manufacture your products
  • Level of personalized service you provide to your customers (ie: custom printing, gift wrapping, special packaging)
  • Your company’s vision and values
  • Average order value
  • Desired shipping speed of orders

Step 2 – Make a List of Fulfillment Companies that Cater to Your Most Important Criteria

There are many fulfillment companies in the USA. Some of them are big names and other’s are family owned. Once you have determined what criteria to look for in a fulfillment house, your search will be more defined and you should be able to come up with at least 3 or 4 contenders, but hopefully this list will help you get started.

Our Top Choices of U.S. Fulfillment Company’s Based on Various Criteria:

High SKU Count
Businesses in industries such as apparel & accessories, toys or household goods may want to focus on providers offering the right tools for managing inventory levels and that have high accuracy of orders.

High Volume
Perhaps you’ve outgrown your current warehouse and need a larger fulfillment provider equipped for maximum performance and that offers transportation services as well.

Low Volume
You may not have enough orders to meet minimum volume requirements by some fulfillment centers.

  • ShipBob (The ease of setting up and the simplicity of pricing is attractive to many small businesses) – shipbob.com
  • Shipmonk (They have a startup program designed to help grow your business) – shipmonk.com

Seasonal
If your order volume fluctuates, you may be looking for flexibility and scalability in your agreement. Companies that have a pricing structure that allows you to pay only for what you need may serve you best.

Specialty Products

  • eGourmet Solutions (Frozen and refrigerated perishables) –
  • Copper Peak Logistics (Wine) – copperpeaklogistics.com

Product Fulfillment
Some companies provide more than order fulfillment and can actually help you package your goods.

Eco-friendly
Depending on your company’s values and the importance of those values to your customers, certain features may be a high priority such as being green.

Personalized Service
For businesses that offer customers the opportunity to customize their order with a custom card or other personalization, you’ll need a fulfillment company that can provide product personalization.

Location
There are two things to consider regarding the location of your fulfillment center: the proximity to your customers and distance from where your products are manufactured. If you have a customer base in Hawaii, for example, you could have lower transportation costs and reach your customers faster by choosing to partner with a local fulfillment company such as Delivery Hawaii that has fulfillment warehouses on all the major islands. On the other hand, if you are a manufacturer in Hawaii, working with us could help you keep your manufacturing process local and qualify for the Hawaii Seal of Quality.

Step 3 – Contact Your Top Contenders and Make a Comparison Chart

After you’ve narrowed your list down to a few top contenders, you should reach out to them directly to get more information about cost and service. You’ll then be able to compare some broader factors that will help you make your final choice. Compare the following:

Cost & Contractual Committments
Pricing structure varies tremendously among fulfillment companies. Some offer flat storage fees, others include storage costs in their minimum order fee. Be aware of setup fees or other hidden fees. You’ll want to determine the lowest cost for your business based on storage needs, order volume and transportation savings you might receive and weigh that against all the other factors.

Flexibility & Scalability
The pricing structure will also determine how easy it will be for you to grow with the provider or make adjustments as your volume fluctuates, but the fulfillment company’s attitude or commitment to your partnership make a difference in this regard as well. Depending on your own growth projections, the volume capacity and size of the projections should be considered too.

Customer service
Once you’ve reached out to each of your contenders, you’ll start to get a sense of what the service is like. Your service and reputation will be in the hands of the fulfillment company you choose so this is important to pay attention to. Also be sure not to base your entire assessment on the sales rep alone because some companies have traditional sales pipeline and once you’ve signed a contract you may be dealing with someone else.

Reputation
It’s hard to research reputation online because there aren’t usually many written fulfillment company reviews. But you can still get a sense of their reputation based on the number of years in business; accreditations, testimonials or customer lists provided; and by checking with the Better Business Bureau or the local Chamber of Commerce. If you still can’t find enough information, ask for some references.

Speed & Accuracy
When it comes to fulfillment, this is the bread and butter. You need to know that your customers are going to get the items they purchase from you and in a timely manner. Many companies publish their accuracy rates and have guarantees in place if they don’t fill an order on time. If there’s any doubt that you can rely on the company to deliver on the most fundamental aspect of fulfillment service, you should heavily consider other options.

Inventory Management Technology
One of the hardest things about outsourcing your fulfillment needs is the feeling of losing control. But partnering with a company that has the technology in place to provide you continual access to accurate, real-time data will keep you in control of your inventory. Not all technology is created equal. Be sure to ask what they use.

Experience (particularly in your industry)
Unless you have determined that you have very specific needs based on your industry and are only looking at companies specialized in your industry, most fulfillment businesses can serve a wide range of industries, but experience in general is still important. When you’re narrowing it down to the last few, whether one contender has more experience working with other companies in your industry or not can mean they’ll be able to provide you with more personalized service.

Added Value Services
Beyond on your required criteria, there may be other things that you find valuable such as custom alerts or assistance with barcoding. Find out the full list of services from each provider so you can compare how they vary.

Ecommerce Integration
If you have an ecommerce store with a significant stream of orders, you’ll want your customers’ orders to go straight to your fulfillment house. Ask if the fulfillment company sets up the integration themselves (and if there’s an additional fee). Depending on the platform you use, the requirements may vary.

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