Over the past six months, I’ve been transitioning the fulfillment processes at my e-commerce business to a third-party logistics (3PL) vendor.

I didn’t know anything about 3PLs before starting this process, so there were a lot of things I didn’t know to ask about. Here are the list of questions that I recommend e-commerce merchants ask a 3PL if they’re considering working with them for fulfillment.

Customer profile

• Do you have other clients whose order volumes are similar to mine?
  • What’s the minimum and maximum order volume you can support?
• Do you have other clients whose products are similar to mine in price?
• Do you have other clients whose products are similar to mine in weight and volume?

Integration with e-commerce platforms

• What’s the process of connecting to my e-commerce platform?
  • Do I install an app?
  • Do I have to make you admin in my Shopify store?
• How quickly does your order management system sync with my e-commerce platform?
  • i.e., when you print a shipping label, how quickly do I see that reflected in Shopify?
• How do I present your shipping rates to my customers?
  • Can I present real-time shipping rates from your couriers or do we need to use flat shipping fees?

Recordkeeping / auditing

• How often do you do stocktakes?
• Do I have access to your inventory tracking system?
  • If not, how frequently do you share reports of inventory counts and changes?
• How will you share records of inventory changes with me?
  • i.e., When did products arrive at your warehouse? When did they go out for customer orders? When did stocktakes happen?

Schedule

• Which days of the week do you fulfill orders?
• What holidays do you observe?
• What’s the typical turnaround time for fulfilling an order?

Shipping

• Do you pass through postage costs directly from couriers or do you add a surcharge?
• Which shipping couriers and services do you support for domestic orders?
• Which shipping couriers and services do you support for international orders?
  • Can you ship international orders delivered duty paid (DDP)?
• What’s the cutoff time for same-day shipping?

Payment

• What are your fees?
• How do you accept payment?
  • Do you charge a surcharge for different payment options (e.g., surcharge for credit cards)?

Handling issues and unusual orders

• What’s your error rate?
  • i.e., how often do customers receive the wrong item or wrong quantities?
• Who absorbs costs of a fulfillment error?
  • What if we have to re-ship with expedited shipping to meet a customer deadline?
  • What if you sent a more expensive item and the customer has already opened it or refuses to return it?
• Who absorbs costs for lost inventory at the warehouse?
  • e.g., warehouse confirms receipt of 100 items, ships 75 over the course of the next month, but the next stocktake shows only 23 remaining (100 - 75 - 23 = 2 are missing)
• How do we handle it if a customer places an order and then emails me to make a change?
  • Will changes in my e-commerce platform immediately sync to your order management system?
• How do we handle it when a customer asks us to hold off on fulfilling an order?
  • What’s the process of pausing fulfillment on an order?
  • Will your order management system recognize Shopify’s “pause fulfillment” feature?

Location

• Where are your warehouses located?
  • Note: Depending on your tax situation, fulfilling your orders from a warehouse in a state outside of your headquarters means you’re responsible for collecting and paying sales tax in the warehouse’s state. Keep this in mind, as filing taxes in a new state is a significant administrative burden.

Insurance

• Does your insurance cover the value of our property?
• If not:
  • What year was the warehouse built?
  • How many stories does the warehouse have?
  • Does the warehouse have wood frame construction?
  • Does the warehouse have a sprinkler system?