How to find the right 3PL

Finding the right 3PL partner is a critical decision in your Ecommerce journey. Your 3PL plays a key role in handling your inventory and ensuring customer satisfaction. Selecting the wrong partner can have lasting negative effects on your business, leading to costly mistakes and damaging customer relationships.

Whether you're choosing a 3PL for the first time, looking to switch providers, or expanding your logistics network, conducting a thorough and informed search is essential to making the right choice.

This article takes you through the process of how to find the right 3PL for your brand.

Beginning the search

Brands seek new 3PL partners for various reasons: outgrowing self-fulfillment capacity, seeking cost savings, or dissatisfaction with a current partner's performance. Finding the right 3PL may seem daunting, but with the right strategy and timing, you can find the perfect match.

Begin your search at least three months before you plan to start onboarding. Avoid peak seasons to minimize disruption; for instance, aim to switch right after the holiday season when inventory levels are lower and transition costs are reduced.

Before starting your 3PL search, prepare by providing a detailed overview of your business, including your current operations, future goals, and objectives. Geography and tech stack are critical factors—ensure the 3PL can integrate with your systems and is well-located for your supply chain needs.

Clearly communicate your current challenges and timeline, as well as provide thorough operational data, such as order sizes, return rates, and inventory specifics. Discuss any special project requirements like kitting or custom packaging, and clarify your packaging and shipping needs. Finally, share detailed forecasts and projections to help the 3PL tailor their proposal to your business.

Where to look for a 3PL

When searching for the right 3PL, networking is your most valuable resource. Join groups for D2C or B2B merchants on platforms like LinkedIn, Reddit, Slack, and Facebook, and ask for trusted recommendations. Learn who others are using, who they recommend, and why, keeping in mind that a 3PL that works for one business may not suit your specific needs, especially if you require specialized services.

If you have software partners, such as those for order management or inventory systems, ask them which 3PLs they recommend and how well these providers integrate with your existing tech stack. Additionally, explore lists created by other merchants, partners, or vendors.

Follow industry hashtags like #3PL, #supplychain, #logistics, and #ecommerce on social media to connect with potential partners and gauge their values. Online directories can also be useful, but be cautious of listings that are merely paid ads without detailed service information.

Finally, consider attending trade shows where 3PL providers exhibit, allowing you to meet their teams and ask questions directly.

And remember, don’t use Google for this one, it’s too important of a decision!

What to ask when interviewing a 3PL

When evaluating a potential 3PL partner, consider these key questions and factors:

1. Integration with eCommerce Channels: The smoother the integration, the better. Ask if they have experience with your sales channels and tech stack. If they do, inquire about the data exchanged (orders, inventory, fulfillment tracking, product catalog) and the visibility you’ll have. Request a demo of their Warehouse Management System (WMS) dashboard.
2. Warehouse Locations: Location is critical for shipping speed, proximity to import ports or manufacturers, and potential tax implications.
3. Order Processing Time: Faster processing leads to happier customers. Ensure their average order processing time meets your expectations.
4. Inventory Management: They should have automated inventory systems that sync data with your sales channels to avoid overstock and stockouts.
5. Product-Specific Handling: Every product is unique. If you sell perishables, fragile items, or other specialized goods, confirm they can handle these logistics appropriately.
6. Customer Support: Understand their response time and communication methods (ticket system, Slack, email, phone). Will you have a dedicated customer support manager, or will you rely on an online system?
7. Customization: Can they provide branded packing slips? What do their mailing labels look like? Customization options are important for maintaining your brand’s identity.
8. Scalability: Ensure they can grow with you. Ask how they manage peak seasons or order spikes and how much space they allocate for your SKUs.
9. Returns Process: Verify that their returns process is efficient and aligns with your brand’s customer service standards.
10. Site Visits: Visiting the warehouse isn’t just about cleanliness. It’s an opportunity to assess their operational efficiency, team culture, and security measures. Happy employees often indicate a well-run company.

Agreeing and moving forward

It's important to negotiate and clearly define all important terms upfront with your 3PL partner. This "prenup" contract should establish the Service Level Agreements (SLAs) that will measure the partner’s performance. Why is this so important? Because ending a relationship with a fulfillment partner that isn't meeting your needs can be as difficult and costly as a divorce—painful, expensive, and often contentious.

By following these guidelines, you'll have the tools to make a well-informed decision and choose the right warehouse partner from the start.