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Fulfillment 3PLs: Why Use a Fulfillment Partner?

Updated: Nov 16, 2023

You’ve identified a product you think could change people’s lives and done all the work to produce and market that product but you still have one hurdle left: what’s the best way to get it into your customers hands? There are a wide range of options from printing labels yourself to outsourcing to a third party provider. Choosing the option that’s best for you and your business can have a serious impact on your customer retention and ultimately, your bottom line.

So, how do you decide? In this post we’ll walk through the deciding factors for fulfilling orders and breakdown the best practices for both outsourcing to a fulfillment warehouse and self-fulfillment.


Why Outsource?

There are many reasons you may be considering outsourcing your order fulfillment and shipping. Outgrowing your original space, a large increase in orders or complicated inventory are all factors that lead a lot of businesses to look for support from a fulfillment warehouse. Fulfillment warehouses or 3PLs (third party logistics) exist to handle your warehousing and outbound order processing, freeing your business up from staffing your own warehouse space. The best of these will also act as a supply chain partner for your business, providing solutions that will help you grow.

For some business models, outsourcing fulfillment from the beginning is the best way to go. The more complicated your supply chain the more likely it is you will benefit from a fulfillment 3PLs support. Below are some specific situations where a 3PL may be your best bet.

  • Hazardous Materials – By definition shipments containing hazardous materials require additional paperwork and labeling, as well as specific ship method restrictions. Finding a 3PL with a strong compliance team can help you prevent fines from carriers and make sure your shipments arrive safely.

  • High Number of SKUs – At a certain point managing inventory can become overwhelming without a robust WMS. The space required alone can be difficult, not to mention the different number of order combinations as your SKU count grows. This is a great time to consider outsourcing.

  • High Volume International Orders – Shipments leaving the US also require additional labeling, as well as well-prepared commercial invoices for Customs clearance. For occasional international shipments this is easy enough to process yourself but if you’re spending hours a week processing additional paperwork it may be time to consider outsourcing instead.

  • Opening a New Market – Fulfillment warehouses can also help you grow into a new market. Ecommerce companies from outside the US can utilize a fulfillment 3PL as their American shipping hub, avoiding individual duties and taxes charges that can cause issues for customers. For domestic brands, there’s also the opportunity to use a 3PL on the other side of the country for cheaper and faster shipping to your customers.

  • Cutting Shipping Costs – This is one of the most common reasons companies begin looking for a fulfillment partner. Depending on their size, most fulfillment 3PLs should have negotiated much better rates with all carriers than most independent brands are able to do by themselves. Many also have rate shopping ability, meaning they are looking for the lowest cost shipping option for the time frame you requested, which can have an immediate impact on your shipping spend.


How do I find the best partner?

You’ve decided a fulfillment partner is the next step for your business but when you search the internet for fulfillment 3PLs there are thousands and thousands of options, how do you choose? Here are 4 factors to consider while narrowing down your options:

  1. Location – Finding a new fulfillment warehouse is also a great opportunity to move closer to your customers. If 75% of your orders are going to southern California but you’re located in Michigan this is your chance to find a fulfillment partner in the Southwest. Alternatively, if your customer base is well spread, you may want to consider a central shipping location that helps you reach everywhere quickly. For example, the Ohio River Valley is home to UPS’ Worldport and offers ground delivery to 75% of the US population within 2 days.

  2. Technology – Implementing a new warehouse into your processes can be a significant lift depending on your business model. It’s important to start by looking for 3PLs with experience integrating into your current platforms. A well prepared implementation team should be able to provide you an example timeline for bringing you online, as well as be able to provide references of other clients they’ve integrated previously.

  3. Costs – Fulfillment warehouses also vary widely in costs for services provided. You should expect to see fees for receiving, storing inventory, picking and packing orders as well as shipping fees themselves. Just like with any service, you will get what you pay for in fulfillment. Newer 3PLs may throw out low prices to interest you but don’t have the experience to perform the way a more expensive warehouse might.

  4. Experience – Understanding your fulfillment partner’s breadth of experience is also key. While a 3PL may have been around for many years, do they have specific experience in your market? It is always good practice to request client references with similar business models to yours. This is also the time to ask questions about any nuance in your business. Is this 3PL able to manage your wholesale orders? Are they capable of supporting orders with complicated processing for customers like Walmart and Costco? Don’t forget to take your own experience into account as well, is this provider bringing valuable insights to you or is it the other way around?

You can use this framework to narrow down the thousands of options online to a manageable amount. Then start reaching out to them. You may find quickly that you aren’t a good fit for some warehouses or stumble on one that surprises you. Moving your goods and orders to a new facility is a big undertaking and one that requires thoughtful planning and teamwork but finding the right Fulfillment 3PL can improve your bottom line and your customer’s experience.


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I'm Jackie.

I've been working in supply chain and logistics for over a decade and I'm ready to share that expertise with you. 

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