On Fulfillment and Football: Does the Size of your Third-Party Fulfillment Provider Matter?

September 15, 2020 by Amware Fulfillment

If you ever want to feel svelte, go stand next to an offensive lineman. Even in college, he’s likely to weigh just over 300 pounds. That massive weight is a big part of what enables him to do his job, because when it comes to protecting today’s college quarterbacks, size matters.

That example applies as we think about one of the outsourcing-related questions we get most often: Is a bigger third-party fulfillment provider – like a bigger offensive lineman – likely to be better? Well, sometimes yes and sometimes no. Let’s tackle the issue (pun intended) via the seven-part Q&A below.


Is a bigger third-party fulfillment partner likely to be better for…


HELPING YOUR COMPANY ESTABLISH A NATIONAL FOOTPRINT?


third-party-fulfillment-provider-sizeYes. Larger 3PLs have extensive national footprints that you can immediately tap into. Just as important, they have efficient onboarding processes that can help get your newly extended network up and running in record time.

While it’s certainly possible for your company to establish a national presence by working with a collection of smaller, regional 3PLs, it will take considerably longer to vet and manage all of those players – and to transform that group into a tightly integrated team that’s truly prepared to protect your brand and customer experience.


ACCESSING A WIDE ARRAY OF SERVICES?


Not necessarily. While most large 3PLs offer comprehensive service menus, many smaller, regional 3PLs have a similar set of fulfillment service options. It all depends on the individual 3PLs you work with and how focused they are.

It also depends on which services you need from a fulfillment 3PL. So as you’re vetting 3PLs, always make sure to ask how the list of capabilities you’re being shown will be used to support your business. The more effectively you can differentiate between what’s relevant for your company versus what’s likely to be relegated to the third or fourth string, the happier you’ll be with the 3PL partner you select.



MEETING A TWO-DAY DELIVERY STANDARD?


Yes. As carriers struggle with capacity, the ability to consistently provide two-day service doesn’t just mean having a well-developed national network. It also requires having enough shipping clout to ensure that your shipments will make the cut if parcel carriers ever have to pick and choose which pick-ups they’re going to make, as will likely happen during the upcoming peak shipping season.

Much like the best quarterback will usually get the highest number of snaps during team practice, carriers are more inclined to reserve their best treatment for their best (read: highest-volume) customers. So unless you’re a huge shipper in your own right, it pays to work with a 3PL whose large aggregate shipping spend will enable your company to be treated like one.

Download the Free eBook, How to  Reduce eCommerce Fulfillment Center Costs



AVOIDING PARCEL CARRIERS' RECENT PEAK SEASON SURCHARGES? 


No. If you’re a high-volume shipper that has experienced a massive surge in business, you’re going to be on the hook for UPS’s and Fed Ex’s recently announced peak surcharges – regardless of how large or small your third-party fulfillment provider is. Like it or not, it’s the carriers’ game when it comes to this particular issue, at least for the foreseeable future.



REDUCING YOUR OVERALL PARCEL SHIPPING COSTS?


Yes. Larger 3PLs can usually negotiate lower parcel shipping rates and concessions on things like rate caps, dim weight divisors and home delivery surcharges. Large-volume shippers know how to bring their A-game to carrier discussions.

Smaller 3PLs are also ready and willing to negotiate on your behalf. However due to the lower shipping volumes they bring to the negotiating table, their leverage will be limited.


ENABLING YOU TO SCALE?


Yes. While a provider’s facilities may be sufficient to support your sales levels right now, it’s important to consider how much additional capacity there is to support future growth – and where that capacity is located. If the 3PL you choose has a deep bench and a national fulfillment warehouse network, it will be easier for your company to quickly expand to other locations, as needed. By contrast, if your 3PL has limited ability to scale, this lack of fulfillment capacity could become a barrier to growth.



HELPING YOU CONTINUOUSLY IMPROVE YOUR FULFILLMENT?


Not necessarily. While most large, national third-party fulfillment companies have formal continuous improvement programs in place, some small 3PLs have also embraced quality concepts like Perfect Order, 5S and Six Sigma. Make sure you take the time to ask all of your potential providers about this in your RFPs, because at a time when the bar for great customer service is constantly being raised, you can’t afford to be working with a partner that’s not constantly looking for ways to help you take your fulfillment game to the next level.



The best of both worlds


There are clear advantages to partnering with a third-party fulfillment partner that has a national fulfillment network and can offer scale. At the same time, you don’t want to get lost among the hundreds of customers at a mega-3PL. A provider like Amware Fulfillment gives you the best of both worlds – reliable fulfillment service nationally, combined with customized solutions and the easy working style of a smaller, more intimate firm.

Looking for a fulfillment partner? Contact Amware and let’s talk.

New call-to-action



Filed Under: Fulfillment Operations