Fulfillment Center Vetting Guide
Finding Fulfillment Leads
My best leads come from referrals, but standard google search can provide good results.
You can also try out an 3PL matchmaking platform like https://www.thirdperson.co/
I recommend the following volume to ensure you find a great partner:
30 conversations
10 offers
5 in-person visits
Preparedness
Have a spreadsheet with the following data that you can share with fulfillment leads:
SKU count
Product dimensions / weights
Past sales data
Projected sales per SKU
Incoming container volume
if your containers are floor loaded or palletized
Evaluating Fulfillment Leads
There are five key buckets that I use to evaluate 3pls:
#1 - Intangibles
As you get more reps, you will more clearly understand what “intangibles” means.
Positive signs are:
They ask you thoughtful questions, demonstrate expertise, and are prepared.
They show up to calls on time. If they are late, they apologize with sincerity.
They keep you in the loop with when you’ll be receiving rates.
They proactively book calls or move forward to next steps.
The more detail-oriented they are, the better.
Before sharing rates or making promises, they ask you for relevant data.
#2 - Pricing
Your goal should be to have 10 rate cards side by side to compare.
The formatting of each will likely be different. Do whatever you need to in order to be able to compare apples to apples.
For last mile shipping specifically, make sure they provide you with rates for every country you may ship to, for all weights you may ship under, and broken down by base transportation rate and other charges.
See a live last mile shipping comparison on my site here -> Renegotiating Last Mile Rates
#3 - Software
Simply viewing their software and seeing a demo with fake data is not enough.
Ask the fulfillment center to allow you to test the connection with your real data.
If you have a complex channel mix, do the bare minimum connection.
This will allow you to get a real feeling of what their software is like. You need to make sure everything is working with your actual system to avoid headaches or unresolved bugs when you go live.
If you don’t thoroughly test before hand, here are some problems you may face:
#1 - The customer tracking information does not sync back to Shopify.
#2 - The software is missing key order data, causing order delays.
# 3 - There is a mismatch between your SKU-id’s and the fulfillment centers data
Action Item -Test at least one sample order so you can audit the customer experience from A-Z.
#4 - Motivation
You are joining into a symbiotic relationship where both sides should benefit.
Even though you are the client, I encourage you to find out what the fulfillment center is looking to get out of this relationship.
Some questions you can ask them:
What are your goals over the next 1, 5, and 10 years, and how does [your company] fit into that?
Your rates are competitive, where do you make your profit? I want to make sure this partnership is valuable for both of us.
Do you have certain volume or storage requirements? I know you have a team to pay which relies on them having consistent volume.
By truly caring about their needs, you can build a win-win partnership.
In-Person Visit
Sit down face to face and look at the people in the eye who you will be working with.
Walk around the warehouse and office spaces and get a sense if people are motivated and have a safe and clean working environment.
Ask your point person if you can watch an order from A-Z get picked, packed, and shipped.
Take this opportunity to catch anything you may have overlooked or not been able to understand virtually.
About Me
I’ve had well over 100 calls with fulfillment centers
I’ve helped an 8-figure company set up 8 new warehouses globally within 1 year.
A lot of the things I’m sharing now are things I wish I would have known a year ago.
I hope this helps. If you have questions specific to your case, I’m happy to answer them.
Feel free to reach out to me directly at keyan@ironmargin.com with any questions.
