How to Choose the Right 3PL Partner for Your Business

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The rise of eCommerce and virtual storefronts has made 3PL a popular buzzword. Is a 3PL the solution to your operational challenges? Here’s a look at what a 3PL can and can’t do and how to make the right choice for your business.

What Is a 3PL?

Simply put, a third-party logistics company, commonly referred to as a 3PL, handles a wide range of services that make up the supply chain. This generally includes operational functions before and after the sale, such as warehousing, transportation and order fulfillment.

A business can outsource their entire operational “department” to a 3PL or engage the 3PL only for specific functions. According to a study by research and consulting firm Armstrong & Associates, Inc., as much as 86 percent of domestic Fortune 500 companies use a 3PL for an average of just under three different services.

Why Use a 3PL for Shipping and Fulfillment

• When you turn operations over to a 3PL, it frees you up to focus on sales, which is the lifeblood of your business.

• Money you don’t spend on warehouse space and staff can be invested in other areas of your company. In addition, 3PLs can negotiate much better rates with freight carriers than you can as a small or mid-size independent retailer.

• With same-day and next-day shipping becoming the norm rather than the exception, a 3PL’s expanded distribution network allows you to meet customer delivery expectations.

• While the 3PL handles shipping, you are still the face of the company and so retain control over your brand.

• You can leverage the locations of the 3PL warehouse to your benefit. For example, Medallion has an East Coast and a West Coast location – allowing for fast shipping nationwide when you store merchandise at both locations.

• Hiring a 3PL can be made easy when using the right partner. Even small businesses can benefit from using a 3PL partner such as Medallion Fulfillment – who has a special program for startups.

Tips for Choosing the Right 3PL Partner

1. How will you find the answer if you don’t know what the question is? Define your needs and expectations and how you will measure them. You’re sure to come across a few 3PLs that are perfectly fine providers, but if you’re not on the same page, a partnership is pointless.

2. Do some due diligence regarding potential 3PL providers. How long have they been in business? Are they financially stable? What does their performance over the last few years look like? If you commit to a 3PL and they suddenly go sideways, the whole bottom could drop out of your own business.

3. What is the 3PL’s reputation in the business community? Social media and online review sites make it easier than ever to get “word of mouth” reports on companies from a customer’s perspective. You can also solicit recommendations from your peers who may have experience with various 3PLs.

4. Does the 3PL demonstrate a willingness to address customer service issues? Some providers feel no responsibility to go outside the bounds of their specific duties. When a 3PL works with you to solve problems, that indicates desire to be a true partner.

5. Technology continues to progress at a rapid pace. Is the 3PL keeping up with current advancements, or are they content to hobble along on an outdated platform?

6. Where do you expect your company to be next year? In five or 10 years? Look for a 3PL provider that can scale along with you.

Coast-to-Coast Warehousing and Fulfillment Services

Medallion Fulfillment and Logistics has what it takes to be the right 3PL partner for your needs.

Whether you’re a small startup or a thriving eCommerce vendor, we have a program that fits your needs, including our innovative Amazon replenishment warehousing service.

Contact Medallion Fulfillment & Logistics to learn more our customized fulfillment options.

Google Ups Its Game in eCommerce with a New Deep Shopify Connection

As Amazon continues its quest to strong-arm eCommerce retailers into submission, another online giant has decided not to roll over. Google, which holds a commanding 90 percent of the search engine market, has joined forces with top eCommerce platform Shopify to challenge Amazon’s dominance.

Google Takes on Amazon

While Google has so far been only peripherally involved in online retailing, Amazon has been encroaching on Google Ads, which was the recipient of more than 50 percent of digital ad revenues in 2020. However, Amazon grew their own advertising market share from 13.3 percent to 19 percent during the same time.

With more than half of online shopping excursions beginning at Amazon, advertising was a logical extension of their other services. Similarly, Google recognized the opportunity to leverage their own robust ad business into providing an alternative for small and mid-sized eCommerce retailers who feel stifled by the lack of options.

The Changing Focus at Google

The new venture is the brainchild of Bill Ready, who joined Google in January 2020 as the company’s President of Commerce and Payments. Ready had previously served as COO of PayPal and CEO of Venmo and Braintree.

Ready’s arrival at Google coincided with the onset of the unprecedented global pandemic, which in turn triggered a seismic leap in the already robust eCommerce industry. Shortly thereafter, Ready took the first step in shifting Google’s strategy by offering online retailers free listings in Google Shopping.

So, what exactly is the new Google Shopping? What it’s not, according to Ready, is an eCommerce retailer or marketplace. In a blog post sent to Forbes in early May, Ready referred to it as a platform for consumers to discover a wide range of products across a spectrum of sellers, from national big-box stores to small independent retailers.

Days later came Google’s I/O Developer conference, during which Ready officially announced the company’s partnership with Shopify. He expounded on his vision of the venture as part of an overall plan to “democratize” eCommerce with a “free and open” system for consumers and retailers alike.

Why Google Shopping?

Here’s a look at what to expect from Google Shopping now and in the future:

• With just a few clicks, merchants in Shopify’s network of 1.7 million+ retailers can install the platform’s Google channel to auto sync their inventory. They can also link a new or existing Google Ads account, and the free listings policy will continue.

• Shopify sellers can feature their products on heavily trafficked Google platforms, including Maps, Images, Search, Lens and YouTube. More than 1 billion “shopping journeys” occur on these platforms daily, making them fertile sites for new customers.

• Google’s powerful access to comprehensive sets of data will power Shopping Graph, an AI-generated model that makes connections between products, sellers and brands. In an example of this synergy, when a shopper views images of products in Photos, it will trigger a suggestion to search for places to buy the items via Lens.

• Amazon isn’t the only online presence in Google’s crosshairs. The company is testing a program that allows YouTube users to shop for products they discover through their favorite content creators. This is in response to the growing presence of TikTok and Facebook in the eCommerce arena.

Coast-to-Coast Fulfillment Services to Fit Your Needs

How do you set yourself apart in the competitive eCommerce field? Sophisticated shoppers insist on exceptional service, rapid delivery, and complete responsiveness. Let Medallion Fulfillment & Logistics handle your storage and shipping needs while you focus on growing your business.

Our scalable, cost-effective solutions include our Amazon replenishment program. Contact us today to learn more.

Amazon is Drawing Increased Attention as Antitrust Chatter Grows

In the world of online retailing, Amazon is the proverbial 800-pound gorilla. The one-time bookseller has become a global juggernaut, allowing consumers to shop for everything under the sun from the comfort of their own home.

With annual revenue approaching $400 billion, it may seem as though it’s Amazon’s world and we’re just living in it. Earlier this year, a group of independent-business organizations joined forces to take aim at monopolies, with Amazon at the dead center of their target.

Small Businesses Feel the Squeeze

Over the years, Congress has enacted various antitrust laws designed to maintain a level playing field. The purported goal of such legislation is to prevent monopolies and promote a competitive marketplace.

In reality, these laws are only as strong as their enforcement. Larger companies have the means to play Goliath to the smaller companies’ David. In 2020, Amazon alone spent approximately $18 million to lobby against stricter antitrust measures.

It may seem as though fighting the retail giants would be a tall enough order. Adding insult to injury, many small businesses feel that industry organizations such as National Retail Federation (NRF) pay lip service to the idea of equal representation while quietly favoring their largest members.

Standing Up for Market Equality

In a proactive effort to regain some equitable conditions, more than 20 trade and business groups formed a coalition under the name, “Small Business Rising.” Members include organizations such as the National Grocers Association (NGA), the American Booksellers Association (ABA) and Institute for Local Self-Reliance (ILSR), a vocal critic of Amazon’s dominance.

Small Business Rising announced their formation and goals in an April 2021 press release. Amazon was specifically cited by name several times, making it clear what the organization sees as one of their biggest obstacles. As Stacy Mitchell, ILSR co-director stated, “concentrated market power” is the toughest challenge facing today’s small business owner.

The organization’s objectives call on policymakers to do the following:

*Break up tech monopolies, such as Amazon, to prevent them from cornering the online market.

* Add teeth to antitrust laws by making them stronger and more enforceable.

* Put a stop to mega-mergers and set higher criteria for regular mergers.

In addition, Small Business Rising is leveraging the relationships local business owners have with power players in their respective hometowns. Members are organizing meetings, seeking out media coverage and waging letter-writing campaigns.

The Rich Get Richer

The unprecedented conditions of 2020 served to magnify the gap between Amazon and other e-commerce businesses. While COVID restrictions created a surge in online shopping, small online retailers faced corresponding supply chain and distribution difficulties, making it hard for them to accommodate demand.

On the other hand, Amazon was able to draw on its significant resources to weather the storm and emerge stronger than ever. The company spent a reported $4 billion on “incremental COVID-19-related costs,” enabling it to successfully adjust its processes and policies.

In the face of mounting criticism during the last few years, Amazon has tried to brand itself as a valuable ally to small businesses, especially with Amazon Marketplace, its third-party online sales platform. Companies have responded by pointing out how Amazon uses prohibitive fees and data access for competitive advantage.

Grow Your Online Business with Medallion Fulfillment & Logistics

Are Amazon’s arbitrary and restrictive fees and policies helping or hurting your e-commerce business? Medallion Fulfillment & Logistics works with you by offering a full assortment of services tailored to fit your needs.

Contact us to learn more about our flexible and cost-effective fulfillment solutions, including our innovative Amazon replenishment warehousing service.

The Technology Behind Successful Ecommerce Fulfillment

Online sales in the United States have more than surpassed expectations. In 2012, online sales hit a record $226 billion, and accounted for 7% of all total retail sales. Experts projected $327 billion by 2016, but they were wrong… Total online sales in 2016 were $394 billion! If your fulfillment company isn’t participating in the ecommerce segment, no doubt you know that you’re missing out on an exceptional opportunity!

In this article, I’ll focus on the technological capabilities a warehouse needs in order to implement an ecommerce fulfillment service. The article isn’t going to be about listing the pros and cons of the Top 10 software programs on the market, because I don’t know your current capabilities or strategic goals. Instead, I believe that the most productive approach is to breakdown the process to help you identify where you can improve your systems.

Let’s talk about process integration. Ecommerce clients will typically approach a fulfillment company with an established business infrastructure. Integration means adapting your systems to plug into those of your customer. The processes that are frequently affected are:

  • Order Capture & Management
  • Picking/Packing & Shipping
  • Synchronizing Order and Inventory Status
  • Visibility
  • Client & Customer Service

Order Capture & Management

There are more than 300 ecommerce shopping cart companies on the market. Your company needs to be technically capable of adapting to the wide variety of methodologies for communicating with those carts. Orders from carts need to be harvested on a regular basis, controlled to insure none are dropped or duplicated, and converted into a form that is compatible with your system.

I believe this area represents the greatest technical challenge for fulfillment companies in the ecommerce space. Your tool bag for interfacing with a client’s systems must include a wide array of technologies, including the ability to interact with flat files, Application Program Interfaces, Web Services, File Transfer Protocol, call center systems, and the occasional manual-order entry. IT resources to plan the implementation and support this process need to be broadly skilled and creative. Administrative resources that perform the daily-order harvesting routines need to be highly attentive to detail.

Picking/Packing & Shipping

This process is probably the most straightforward. Picking slips are generated, product is picked and boxed, and shipping labels are applied using traditional fulfillment methods. Although there may be special requirements for packing slip and box branding, those requirements don’t vary much from conventional fulfillment. It is essential to operate at a very fast past as ecommerce performance is measured in hours and the volume of orders is measured in thousands per day.

Synchronizing Order and Inventory Status

Ecommerce fulfillment requires that the client’s shopping cart has the most recent inventory and order status information. Your systems need to regularly communicate inventory availability to the cart to ensure that a client’s customer is made aware of out-of-stock situations before placing an order. Customers also need to be able to reference the shopping cart to find the status of their order. Process synchronization between your operation and that of your client is an absolute necessity.

Visibility

Ecommerce fulfillment is very fast moving! We used to joke that customers would press the “buy” button and run to the front door looking for the UPS truck! With Amazon’s latest experiments in same-day delivery, this joke is almost a reality. Given the speed of ecommerce, it’s important for your clients to be able to have a real-time window into your process and inventory. At a minimum, clients should be able to see orders and inventory in near real time. The leading-edge, ecommerce fulfillment companies have taken a more pro-active stance by publishing “alerts” when important events are happening in the fulfillment process. Alert examples might include: Product X is running low on inventory; a new shipment of stock has arrived; or a customer has returned an order.

Client & Customer Service

The fulfillment process is heavily impacted by fast-paced marketing and promotional decisions. Ecommerce client support typically requires a designated coordinator to represent the client’s requirements to the fulfillment organization and to coordinate program changes. The volume and minutiae of detail often warrant the implementation of “issue logging” and “project workflow” processes within the organization. Given the pace of the business, these processes are best automated.

Some clients, particularly the Entrepreneur and Offshore segments, may ask the fulfillment organization to manage customer support. This might involve call-center work, authorizing returns, handling the occasional complaint, and so on. These client groups often have too small a volume to outsource their work to large call center. Having an arsenal of exceptional customer-support tools, therefore, positions you to capitalize on a good revenue opportunity.

In summary, successful ecommerce fulfillment relies on solid technical foundations. Warehouses and 3PLs must understand that ecommerce clients have very different needs (and expectations) for the technical aptitude, agility and pace of their fulfillment partners.  To fully capitalize on the ecommerce segment, your fulfillment service must meet–and exceed–these requirements.

How Can You Compete Against Amazon

Yes, when it comes to ecommerce, Amazon is the proverbial elephant in the room. Ignoring the online giant isn’t going to make it disappear, so the only business you have control over is your own. Do you wave the white flag or dig in and fight?

The good news is that, with a little creativity and skillful marketing, you can successfully compete against Amazon. Incorporate these valuable tips to reinvigorate your digital storefront and your ecommerce fulfillment services will be running on all cylinders in 2020.

1. Refine Your Focus

Amazon’s blessing and curse is that it wants to be all things to all people. As a small- or mid-sized online business, you have the flexibility to find your company’s specific niche and learn that segment inside and out. Once you’re established as an authority, you’ll become the go-to source for your product offering.

2. Leverage Content Marketing and Social Media

Amazon is a faceless behemoth and they do nothing to counteract that image. Use content marketing and social media to personalize your company and forge a connection with customers. Start a blog, share interesting stories and articles, run a contest, post pictures and videos. Be sure to track results and fine-tune your strategy based on what’s working and what isn’t.

3. Optimize Customer Experience

Can you even remember the last time Amazon made any changes to their website? Product pages are busy, clunky and boring, regardless of the device. A sleek, streamlined, user-friendly interface that’s consistent across all platforms and devices goes a long way toward making your company stand out. By the way, if you haven’t optimized for mobile traffic yet, what are you waiting for?

4. Don’t Fall Into the Price Trap

Some retailers make the mistake of lowering prices as a knee-jerk response to competition. Almost no one has the same economies of scale found at Amazon, so slashing prices is a losing proposition. Memberships, limited-quantity items and customization are just a few ways you can make shopping your storefront feel exclusive, which is a more effective way of differentiating yourself.

5. Offer Rewards and Loyalty Programs

Did you know that, until Apple Pay finally edged it out in late 2019, Starbucks had the most widely-used mobile payment app? Part of the reason is because users earn points toward free Starbucks food and beverages. Programs that offer discount codes, special offers and similar perks to frequent shoppers or members are a reliable way to build loyalty and encourage repeat sales.

6. Create a Subscription Service

According to a study by top management consulting firm Bain & Company in conjunction with Harvard Business School, just a five percent increase in customer retention can boost profits anywhere from 25 to 95 percent. A subscription service is easy to implement and brings in steady revenue while reducing costs. As a bonus, repeat customers are more likely to make referrals.

7. Provide Top-Level Shipping and Delivery

Thanks to Amazon Prime, online shoppers expect prompt, free shipping and convenient delivery. While it may not be feasible for you to offer 100 percent free shipping, you should provide at least some type of option, such as free delivery for a minimum total purchase. Tracking details and a no-fuss return policy should also be included in your shipping and delivery program.

Medallion: Ecommerce Fulfillment Services for Today and the Future

Are you looking for ecommerce fulfillment services that will grow along with your business? Medallion Fulfillment & Logistics offers a full range of services that are flexible enough to scale according to your needs.

Contact us to learn more, including information about our Amazon replenishment warehousing service. We now have a warehouse in Boston, Massachusetts in addition to our Los Angeles, California location to serve your need for fast delivery nationwide.