It’s time for some truth telling about these top 3PL fulfillment companies lists you see around the internet. For the most part, they’re bogus. Just about all of them.
We say that even though we’ve landed on some ourselves.
Being listed as a top fulfillment 3PL can involve one (or more) of the following:
- Pay-to-play. Many 3PLs simply buy their place on top 3PL lists.
- Relationship rewards. Some lists get developed with editorial integrity in mind, but others get used as a reward system. For example, if a 3PL spends a lot on advertising, the publication may consider this when creating its list.
- Affiliate deals. Some people write detailed articles with curated lists in order to rank highly for a term like “top 3PL.” Readers who click through to one of the firms mentioned are counted as “leads” for which the writer has arranged to get compensated.
- Owning the list. You’ll find lists of top 3PL fulfillment companies where the company that published the list is also on the list.
- High revenue. These revenue-based lists actually arent’ so bad since they get formed using an objective criterion: revenue. But calling the largest providers “top providers” may not match your viewpoint. 3PLs that are very large could actually be a liability for brands needing a highly flexible partner.
Finding the right 3PL for your needs is like car buying. You’re not looking for the top cars in the generic sense, you’re looking for the top car for your specific needs and lifestyle.
Finding Your Top 3PL Fulfillment Companies
So, how do you find the top 3PL fulfillment companies for your business? It starts by looking inside, not outside. What characteristics would your perfect fulfillment 3PL have? Here are some hypothetical requirements that may or may not apply to you.
- In your desired location. If you already know you want a partner that operates in your same state, close to your headquarters, then your list of potential partners has already shrunk quite a bit.
- Scalable solution. If you’re a growing company that wants to scale, you might require a 3PL with a nationwide fulfillment center network that you won’t outgrow.
- Experience handling your type of product. Let’s say you sell vitamins or supplements that must comply with strict U.S. Food & Drug Administration (FDA) regulations. In this case, you’ll likely want a logistics provider who understands food-grade warehousing, recalls, lot-level traceability and other operational requirements associated with these types of products.
- Experience in B2C fulfillment. If you are primarily a B2C brand, then it’s wise to seek a specialist in this area. The people, processes and technologies required to get B2C orders out the door vary greatly from those required for wholesale or retail distribution.
- Experience in your industry. For instance, if you are a direct selling company you may want to work with fulfillment providers that specialize in this sector. If you do, the Direct Selling Association (and not some random top 10 list) could be a great resource for finding a partner. The same goes for other niche associations.
- Multi-channel distribution capabilities. If a portion of your sales go through major retailers like Walmart or Target, you’ll want a 3PL with retail compliance experience to avoid chargeback penalties.
- Flexible operating model/culture. If you need a partner that can adapt quickly to changing needs, the largest 3PLs may not be the answer.
Any good dating app starts by getting you to describe the kind of partner you seek. When looking for a long-term fulfillment partner, that’s a good place to start, as well.
Creating your “short list”
Once you create your “ideal partner” description, share it with colleagues or others who know the market well and can steer you toward proven partners that match your criteria. Making the wrong choice of fulfillment partner can severely damage your brand, so direct referrals can help to reduce your risk.
Google can be your friend, as well. Armed with your key criteria, you can begin a series of very well-defined searches for partners that match needed capabilities. Once you’ve identified a list of potential partners, you can start digging into their websites and further vetting the companies in order to arrive at a short list of companies to receive your fulfillment RFP.
Sometimes, though rarely, fulfillment 3PLs will tell you if they’re a good fit
Buyers of fulfillment services are pretty smart. They know how much is at stake and tend to do the research and vetting required to connect with the right partner. So it makes sense for 3PLs to be candid about what they’re good at – and not so good at – because, if they are the wrong fit, they won’t win the business anyway.
In reality, most fulfillment 3PLs cast a very wide net when marketing, seeking to talk to as many prospective customers as possible. Consequently, it’s hard to figure out what they’re great at because they want you to believe they’re great at everything (even though you know, and they know, that’s impossible).
What if 3PLs were less concerned with landing on a generic top 10 list and more concerned with helping brands solve problems and find a great-fit partner? There would be a lot more truth telling.
At Amware, for instance, we fulfill a lot of vitamins, supplements, cosmetics and other health and wellness products that are small in size. We’re not focused on, and hence less efficient with, larger-sized consumer products like bicycles and furniture.
Our customers tend to ship at least 10,000 orders per month. Brands that don’t ship in these kinds of volumes would hit up against our minimum charge threshold and, therefore, pay a higher fulfillment cost per unit.
While our nationwide fulfillment center network allows 1–2 day fulfillment to 95% of the U.S., that network is not global (though we’re heading there), so we’re not yet a good fit for brands that want to maintain inventory globally.
The right match
The point is that generic top 10 lists and overstated 3PL claims about capabilities do little to match brands with best-fit partners.
While consulting a list of the top 3PL fulfillment companies sounds like a promising shortcut to arrive at a short list of potential providers, in reality it can be a time-sucking detour. Start your search process by documenting what an absolutely perfect partner would look like, then use your professional network and the research tools available to find the right match.
For more information, consult our Ultimate Guide to Outsourced Fulfillment Services.