In an era where we increasingly do business online, the importance of good logistics services to fulfil virtual orders in the real world is greater than ever.
Both consumers and businesses are buying more and more of the products they need on the Internet. This trend places increased focus on logistics and getting goods to the customer in an efficient and timely manner.
For businesses that sell online this means that fulfilment services are part of the key to success. Increasingly companies are looking to outsource services such as warehousing, fulfilment and returns in order to focus on sales. So what should you look for when selecting a logistics supplier?
Choosing A Logistics Supplier
The decision to use a third-party logistics provider depends on a number of factors. It will depend on your company’s plans and objectives as well as the type of product you are dealing with, seasonal variations and more. There are some key things to set straight before you begin talking to potential suppliers.
- What volume of stock is involved?
- How many deliveries per day? Both incoming and outgoing
- What tasks are to be performed? Warehousing, distribution, returns, etc
- Service standards, do you need to offer next day delivery for example?
- Do you need to make overseas shipments?
Answering these questions will allow you to approach providers to begin the bidding process. You then need to look at how your requirements can be met and what value the fulfilment supplier can add to your business. In particular you need to focus on:
- Do they have the capacity and technology to meet your needs?
- Is the company financially sound?
- Are they conveniently located to cover your delivery areas?
- Can you get references from other customers?
Whilst these are the main things to look at you should also consider whether the business will be a good fit with yours. Will you feel comfortable working together? It is worth looking at online review sites to get an unbiased view of the company from customers too, but do remember that people tend to go online to complain rather than praise.
Of course you need to look at the costs too. You are outsourcing your fulfilment in order to make your business more efficient and more profitable but that isn’t going to work if it ends up costing you more. On the other hand if one bid is significantly cheaper than the others you need to be asking why. Poor service from your logistics supplier reflects badly on your company so going for the lowest cost option may not be the best move.
It is also important to consider the management of the contract in the longer term. Consider how you are going to measure the supplier’s effectiveness for example. You need to take account of how the contract will respond to change too, to be effective a logistics service needs continuous tweaks and improvements. Only by a process of ongoing refinement can you be sure the service will meet the needs of your business into the future.
Anna Mathews writes regularly on business matters, she believes that many organisations can make savings and improve their service delivery by outsourcing their fulfilment to a company like Sku Logistics.