You know you have the right product. In market testing and in focus groups, everyone loves it. When it launched on your e-commerce site, the orders flooded in. The demand is there.
But in the days since launch, you've noticed that orders are falling off. Curious, you investigate. You log on to your site to check out your customers' feedback and you're astonished to find a lot of 2-star and 3-star reviews. What gives?
Digging further, you find that people do, in fact, love the product. On your competitors' websites, there are plenty of 5-star ratings and glowing reviews. The problem must be on your end. You read the lukewarm reviews on your site and find they are coming from botched deliveries, late deliveries, lack of customer service contact and logistical problems. Something's gone wrong— your fulfillment team isn't living up to its promises.
Now, you have a real problem on your hands.
You just found out the hard way that having all the right products, a gorgeous and easy-to-navigate site, the best designed e-commerce portal in the market, and the sleekest, catchiest branding all for naught.
If your third-party fulfillment (3PF) provider makes a mistake, your business is the one that takes the hit.
Do your homework before choosing a 3PF as a partner.
In journalism, there's a famous mantra (attributed to the old City News Bureau of Chicago, renowned for fast, accurate and gripping reports): "If your mother says she loves you, check it out with independent sources."
That same phrase could be applied to any new B2B relationship. When you go into talks with a potential fulfillment partner, pay attention to its promises then contact current and former clients.
Find out from other businesses it has served whether your potential fulfillment partner has thus far been able to deliver on its guarantees. Have other businesses had difficulties contacting personnel on the floor at its distribution hubs? Have shipments gone out late? Have orders been overlooked? Have order misfills or returns been an issue? Has inventory control been a problem?
Location, location, location.
You'll also want a centrally-located 3PF provider.
If you're a small operation with a storefront in Boston and product geared toward New England tastes and interests (say, Boston University and Boston College-branded athletic apparel), working with a 3PF provider located in northern New Hampshire might make a lot sense. It knows, and can in a timely fashion deliver to, the vast majority of your client base.
But if your product is of interest to people in a more widespread geographic area (let's say you specialize in producing licensed Boston Red Sox and New England Patriots gear, and you get orders from a national fan-base), partnering with a distribution partner in New Hampshire doesn't make sense at all.
That 3PF company isn't going to be able to offer next-day delivery (at least, not cost-effectively) to most areas of the Lower 48. Next-day deliveries from New Hampshire are going to need to go by air— driving up their costs, your costs and ultimately, your customers' costs. So, you're going to lose out every time to competitors who can deliver more quickly and more cheaply—especially during peak seasons.
In this case, it would probably make more sense to partner with a 3PF company that has a hub in the Midwest— where the vast majority of the American population is within a day's truck haul— or that runs multiple hubs across the country.
Not only will your customers be able to save the money they would otherwise have had to shell out for express air delivery, you'll see cost savings on your side, because your 3PF provider won't have to bring in an additional air-delivery middle man to your supply chain.
Does your 3PF provider make customers feel special?
Much of brand loyalty is based on a customer's emotional takeaway. Is your fulfillment provider merely shipping out an item? Or is it kitting, gift-wrapping and including personalized messaging that will make your customer feel important and recognized?
Including those bells and whistles can really set your business apart from the competition.
It's one thing to order that sweatshirt; it's another thing to receive that sweatshirt in a nice, wrapped box with personalized thank-you note, a printed catalog and an invitation to do more business in the future. A pack-and-ship company, as opposed to a baseline third-party fulfillment firm, can help you to achieve this level of personalized service.