What to Ask When Evaluating 3PL Fulfillment Companies

by | May 2, 2016 | Articles, Technology

Shopping for any business service is a high-stakes evaluation, especially one that affects the value delivered to your customers. For e-commerce businesses, one of the critical arteries supplying the lifeblood to your businesses is the choice of fulfillment provider. After all, the chosen fulfillment company will be responsible for receiving, storing, picking, packing, and shipping your product to customers. Essentially, your fulfillment company is responsible for ensuring that the value created by your marketing team, web developers, product engineers or procurement team, and customer service representatives, is actually delivered to your consumers in the expected condition, as fast as possible, without any flaws.

Red Stag Fulfillment an ecommerce fulfillment company that was born out of this exact situation. When the ownership of an e-commerce company spent years unable to find a high-quality fulfillment provider that cared as much about delivering value to customers as they did, the decision was made to attempt to build the fulfillment provider they could not find.

One of the tools used to guide the development of Red Stag was a checklist that had been developed by their e-commerce sister company, which served as a set of “interview questions” used to evaluate potential fulfillment providers. Having outgrown two e-fulfillment providers, the owners of the e-commerce company had become all too aware of terms such as “shrinkage allowance,” which are often hidden in the fine print of fulfillment company contracts. They had also experienced firsthand the repercussions of a lackadaisical workforce, long-term contacts, hidden fees, and security issues.

The Fulfillment Checklist is divided into two sections: The first section delves into questions related to “Reliability”, while the second section explores questions around warehouse “Security”.

There is no question about it – you must find a fulfillment provider that can consistently deliver high quality service, meeting the ever-increasing needs of your customers. In their fulfillment provider questionnaire, reliability is addressed by asking some critical questions:

  1. Do you offer an Order Accuracy Guarantee? – Are your orders guaranteed to be accurately picked 100% of the time?
  2. If you make an error on an order, will you pay an error penalty fee on top of correcting the mistake?
  3. Do you have a “no hidden fees” policy?
  4. Do you offer free account setup?
  5. Do you have a Technology Team available to resolve any system or technology issues?
  6. Do you have a policy on inventory shrinkage or damage?
  7. If any of my inventory is lost or damaged, will you reimburse me for the cost of that inventory?
  8. Do you offer an Inventory Accuracy Guarantee? – Is your inventory guaranteed to be 100% accurate 100% of the time?
  9. Do you offer an Order Processing Guarantee? – Is it guaranteed that 100% of your orders will ship on time? Even if there is a surge of orders?
  10. Do you have a backup generator so the facility and systems are always online?
  11. Do you have a no long-term contract agreement? – Your fulfillment provider is far too important to be tied to contractually if their performance declines.
  12. Is inventory received within one business day? – It does your business no good to strategically buy products that take days to make it into the live inventory shelves.
  13. Is Your Warehouse Operation Secure? – How often are issues of employee or external theft dealt with?

The second section of the fulfillment provider questionnaire is devoted to the security of their warehouse operations. Critical questions are explored in this section, such as:

  1.  Does your facility have a 24-hour monitored security camera system?
  2. Does your facility security system have multiple power source backups?
  3. Do you have website security with 100% uptime?
  4. Does your facility have 24-hour camera coverage of every square foot of operation?
  5. Does your facility have an individualized access control system with on-site management?
  6. Do you do full background checks on your employees?

These are just a sample of the many questions that you can ask your potential provider before making what could be one of the most critical decisions for your logistics operations. The fulfillment provider questionnaire is conveniently crafted in a PDF document so that you can easily download and fill out. To view and download the entire PDF, click here.







Jake Rheude is the Director of Business Development for Red Stag Fulfillment, an efulfillment company born out of ecommerce, and designed for ecommerce. When the owners of e-retail businesses could not find a high-quality fulfillment partner, the decision was made to build the ideal fulfillment partner themselves. The result was Red Stag Fulfillment, a company taking a new approach to the fulfillment industry and sweating the small stuff so that you don’t have to.