Years ago, a fast-food chain ran a campaign that started with the words, “Same, same, same, same.”
It’s an expression that frequently comes to mind when I’m responding to RPFs for eFulfillment services, because even though these documents were created by diverse companies with different needs, you wouldn’t know it based on the remarkably similar questions they ask. The generic nature of many fulfillment RFPs is why some eTailers end up with either the wrong fulfillment partner or one that’s not the best fit for their needs.
To help prevent this from happening to you, here are several suggested questions you might want to consider tossing into your 3PL fulfillment RFP – or into the follow-up conversations you’ll have with your short list of finalists.
Some are just variations on familiar themes. Others are a bit more….”direct.” But all should inspire your prospective 3PLs to provide answers that go beyond the typical canned responses – and get you closer to the outsourced fulfillment relationship that will truly take your growing business to the next level.
DON’T ASK: Do you have 10,000 square feet available at your facility?
INSTEAD, ASK: How much room for additional business do you have in your facility?
Let’s say you’re looking for Atlanta eFulfillment services. While you may feel like you’ve already accounted for the precise amount of space, labor and throughput you’ll need at an Atlanta fulfillment center, it’s always wise to consider what might happen if your company has a huge Black Swan-like sales spike or grows more quickly than expected. You want a 3PL partner that can scale fulfillment operations to meet your needs today, and well into the future.
DON’T ASK: How large is your distribution network?
INSTEAD, ASK: How much additional capacity does your entire fulfillment center network have? Where is it located? And what kind of value can that add to my supply chain?
As customer expectations for fast delivery accelerate, chances are good that you will eventually need a national fulfillment warehouse network. So even though you may only be looking for eFulfillment services in a single market right now, it’s smart to carefully consider where each of your potential 3PL candidates might be able to serve you farther down the road – and whether or not they have the bandwidth to do so.
DON’T ASK: Do you have B2C fulfillment experience?
INSTEAD, ASK: What percentage of your operation – and network – is dedicated to eFulfillment?
If you were trying to find the right physician to help you deal with a specific medical condition, which would you choose: a specialist who addresses many such cases every day, or an internist who treats your condition only occasionally?
While eFulfillment isn’t brain or heart surgery, it’s also not simple or as similar to B2B distribution as some service providers would have you believe. It helps to work with an eFulfillment specialist. So make sure every 3PL you’re looking at is either a) treating fulfillment as its core business or b) has a fair amount of focused fulfillment experience.
DON’T ASK: Will we have the attention of your company’s key executives if needed?
INSTEAD, ASK: Can we have your CEO’s mobile phone number?
Most 3PLs will claim that you’ll have full access to their company leadership after the contract is signed. However, that doesn’t mean that you actually will, which is why it’s good to test the veracity of this promise with a very direct question like this.
If your prospective 3PL’s answer is no, that should be a red flag. If you’re not important enough to warrant a little bit of the boss’s attention, what does that say about the overall importance of your account to the provider? If the answer is yes, then follow through by getting the number and giving the CEO a call. There’s a lot to be said for knowing that you can actually pick up the phone, dial a 3PL’s top executive and either get an answer or have your call quickly returned.
DON’T ASK: How many employees does your facility have?
INSTEAD, ASK: What’s your associate retention rate, and how does that compare to the industry average?
When it comes to outsourcing eFulfillment services, few companies think to ask about how a potential 3PL manages and motivates its people – which is ironic when you consider how people-intensive most order picking operations are and how important good warehouse staffing continuity is.
Before you sign on the dotted line, take a closer look at how well each of your potential 3PL candidates supports and interacts with its associates. An excellent rate of retention suggests that a shipping and fulfillment 3PL is probably treating its people right. By contrast, a higher-than-average rate of turnover might be cause for concern, especially during peak season.
DON’T ASK: What kinds of fulfillment systems does your facility use?
INSTEAD, ASK: How many transactions or orders are your fulfillment systems currently supporting, and how much more volume can they handle?
In this IT-intensive age, most providers will have some sort of WMS, not to mention myriad other technologies. The important question for you is, are those systems scalable enough to support the addition of your company’s business? And are they robust and diverse enough to keep up with your future sales growth and system requirements?
While a company’s limited IT infrastructure needn’t automatically put it out of the running for your business, it should at least inspire subsequent conversations about how – or if – it’s planning to improve its systems in the future. Because as your orders grow, you will eventually arrive at a time when an absence of IT bandwidth will come back to haunt you.
How to vet eFulfillment services partners
When choosing a fulfillment provider, remember you are not signing up for a date, but a long-term relationship. The wrong decision can severely damage your business. So take your time, and get beyond the surface-level questions for which all providers will have pre-written answers. Ask questions that test their knowledge and commitment, and that explore the limits of their capabilities.