Shopify 3PL (3rd Party Logistics)

Ensuring that your logistics are meeting customer experience and satisfaction levels with a successful online store can become challenging. The more products you carry, relying on the inventory management system to fuel the re-supply in order fulfillment with supply chain challenges can be a nightmare. Ranging from small businesses and larger, your Shopify Store could use some help - here are some tips when it comes to engaging a Shopify 3PL partner.

Common Challenges

Basic Logistics: Anywhere between not having the time, the warehousing, and inventory stock-take to verify that your Shopify Store is in sync with reality, this part of doing business can be challenging, especially when you are growing your volume. Moving facility when you have little to transport between warehousing facilities is manageable, but when you are in a growth mode, knowing where you are scaling from takes some strategy to ensure that you don't get stuck in a location where you can't scale. This applies to the pick/scan-pack-and-ship system which tracks your inventory - if you can't process and keep in sync with your Shopify store, inventory becomes a liability of out-of-stock orders requiring refunds.

International Expansion: While it may seem easy to send a package internationally as an individual, as a business cross-border custom forms and tax is part of the routine, making International orders more cumbersome to process. Tracking the forms and what or how to fill them out as each country varies in its requirements, to make your life easier, you might consider a 3PL to perform this end of the business.

3PL terms: Various 3rd Party Logistics companies will have their own terms when it comes to minimum shipments, maximum inventory capacity, and limits on how many orders they can process. 3PLs need to fit your business model, so shopping around for the right one will take a time investment - asking the right questions and getting the right answers will point you in the right direction.

Finding the right Shopify 3PL

Finding a responsive 3PL partner with the right business model that will fit your Online store's volume, product set and will work with you isn't an easy step - as it takes to research and patience to reach the right agreement for your needs today and in the future. Much depends on how you currently operate your logistics, and if you are considering doing this earlier and are seeing growth, you might save yourself some growing pains in doing so.

Business type and model: If you are a B2B business or B2C, shipping products that have restrictions (volume/size, weight, chemical, explosives, etc.) warehousing becomes the primary concern of storage - temperature/humidity control is a key factor to keeping your items stored. If you have a subscription model, inventory planning is a lot easier. If you are offering businesses products and services, freight/palletizing might be a requirement. Having your process mapped in your logistics will highlight all your dependencies to ensure a great customer experience.

3PL's common questions: When engaging a 3PL business, they will most likely ask the following questions, so have these ready for them.

• Dimensions and product weight for every product you carry.

• The monthly order volume and which are the more popular products.

• The average basket size and what common bundles/combinations do you see in your orders.

• Shipping destinations, and most common locations you ship to.

• Do you have bulk orders or large orders, if so how often?

• Do you track with SKU barcodes, if so how many SKUs are you looking to store in the warehouse?

• The technology for them to track, pick, pack, and the ship will connect to your Shopify Store?

Questions you will have for them: With customer service in mind, for your peace of mind and ensuring that both costs will be in check, dispatching times being within expectations, you might have these questions at hand.

• How will you track your shipments?

• Boxes and Labels - can they be provided, or will you need to supply them?

• Does the system track all packages?

• Can you have a single quick visit to see the operation on how easy, fast and accurate their procedures are?

• Testing the system: Can you have an out-of-process request to ship a customer a product and simply enter the shipment tracking number to receive up-to-date status and delivery confirmation for your valuable and time-sensitive letters and packages?

• Do they have a map of the order fulfillment process?

• What are the shipping services? Domestic or anywhere in the world?

• Which carriers do you carry that would be the lowest cost for a free shipping offer?

• Do you vary your cost per item pick based on size/weight?

Given that you are expected to be dealing with a team of dedicated professionally trained logistics staff, knowing that their success relies on your success in customer satisfaction, they will usually have metrics (KPIs) which they will share on a monthly basis on their efforts in fulfilling your orders.

Conclusion

You will cover future needs, payment arrangements, the average cost per box, and many different aspects of doing business. A lot can be uncovered with a physical visit. Creating a matrix of top key 3PLs to narrow the right partner down helps reach the best candidate, and then comparing your costs to theirs is the last step. You will hopefully find that it will cost you less and you will also get your time back to focus on other parts of the business. Connecting a 3PL is the easy part - getting the right 3PL is the tough part. If you got any questions about your store's ability to interconnect with a 3PL - feel free to reach out to us at wish@thegenielab.com