I wrote a post recently about how a Third Party Logistics provider (3PL) can help a business grow, and I received some comments by other Skout members who said they were in that position themselves, i.e. their business was booming after the Kids InStyle trade fair and taking orders almost to the point of bust and had they known about logistics service providers they could have really capitalized on the success of the trade fair. This got me thinking that many business owners looking to outsource would not really know what to look for and expect in a 3PL. Therefore this post should cover all the things you should look for in a 3PL to make sure you get an arrangement that is right for you.

Size. This is the most important one and there are many things to considern when it comes to the size of business you are partnering with. If you are a wholesaler selling to a relatively small number of stores then you want to find a 3PL that will be able to give you their full attention and ensure your business is prioritised. Many of the major 3PLs deal with some of the largest wholesalers and distributors in the country and as a smaller boutique company, if you enter into an arrangement with them you may find yourself simply falling to the bottom of their priority list.

Growth. You need to select your 3PL with a view for the future in mind. As a designer wholesaler you may start out only needing someone who can manage your small number of shipments but what happens when your business start to expand and or you release a new product that is wildly successful? Is your 3PL going to be able to handle that variation in size. Look for a 3PL who has a system in place to give you their full attention and service whilst allowing your business to grow over time and retain the same service.

Relationship. The relationship between your business and your chosen 3PL is very important to making it work. It should be an alliance between two businesses who want the same thing: the success of your business. It should not be a situation of two opposing forces contantly battling to get the results you want. When you are shopping around for a 3PL make sure you go meet the company directors and get a feel for the way they treat your business. You want to go for a provider shows that the focus is YOU. Someone who is interested in making your life easier and making sure that you are satisfied at every step of the way. Be sure that when you are looking for a 3PL, you avoid someone who just treats you as another faceless client instead of a valuable business partner.

Technology. When you are looking for a 3PL, many companies trying to get your business will throw lots of techno-babble at you in the hope that you be impressed. But really there are only a few things in your 3PLs tech systems that you need to look for to make sure your service is going to be hassle free. Firstly a good 3PL needs to have a system with open flow of information so that you are not left in the dark about what happen to your orders. You should have constant access to the data so you can track them from the time you pass them on to the 3PL until the time they reach the shops. Look for an energy and time efficient 3PL that uses radio-frequency scanning devices in their picking instead of ticking off a traditional paper pickslip. It means far less mistakes are made for one, but also it dramatically reduces the amount of paper wastage in the picking process. It is only a little thing but it separates the good from the best.

Experience. This is something that is hard to determine but generally you can see what you are going to get from a 3PL by looking at the experience in dealing with other companies like yours. Look for a 3PL that services other businessess that are roughly the same size as yours. Or even better a company that is familiar with businesses in your industry whether that’s kids clothing, toys, wine or whatever it may be. Find out who their current clients are and give them a call. They will let you know if the service they are getting is as good as they expected.