How to Choose the Right 3PL Partner for Your Business

Handshake to do business with Medallion Fulfillment & Logistics

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.

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.

Website Chatbots: What to Know to Embrace This Emerging Technology

In the United States, more than 50 percent of millennials and Gen Xers have interacted with chatbots, making these conversational programs one of today’s hottest eCommerce trends. But in reality, Siri’s and Alexa’s “parents,” Eliza and Parry, actually date back to the mid-60s and early 70s.

Simulated human conversation may not be new, but thanks to modern advancements in technology, these programs can now be integral parts of your marketing and branding strategies. Our fulfillment warehouse experts share what you need to know to successfully incorporate website chatbots in 2019.

Chatbots: Personalizing the Online Experience

Real-time interaction is a major advantage brick-and-mortar stores still have over virtual storefronts. Nearly one-third of online shoppers cite difficulty in getting answers to simple questions as their biggest frustration with eCommerce.

Chatbots are uniquely equipped to handle common customer service inquiries. Once you import your company’s FAQs, chat history and other relevant information, a chatbot uses the data to “train” itself. As the chatbot interacts with visitors to your website, the experiences serve to further refine its performance.

Need more reasons why you should be using chatbots?

• More than 50 percent of the participants in a Facebook survey said they’re more likely to shop with a business that provides chat services.

• Global research and advisory firm Gartner predicts that by 2020, 85 percent of engagement with eCommerce sites will be conducted via self-service options and chatbots.

• Surveys by Oracle, one of the leading multinational computer technology companies, indicate 80 percent of businesses currently use chatbots or are making plans to by 2020.

Value Add-On for Improving Productivity

Customer service is a natural application for chatbots, but their usefulness doesn’t end there. In addition to providing information, chatbots have the ability to gather data more fluidly than human agents.

• Chatbots can be programmed to ask targeted questions in order to qualify potential leads.

• Hard-to-navigate websites are another top source of frustration for online customers. Chatbots direct shoppers to the proper area of your website simply by asking what they’re looking for and posing other leading questions.

• Use of chatbots frees your staff to work on more urgent tasks, reducing operational costs while maximizing effectiveness. Chatbots are also available 24/7 without being subject to down time or attrition.

Chatbot Guidelines

1. No matter how sophisticated a chatbot program may be it’s meant to supplement human interaction, not replace it. Proper use of chatbots includes programming them to “know” when a customer should be directed to a human customer service agent.

2. While consistency is one of the advantages of chatbots, the programs are not one-size-fits-all. Chatbots are designed to be fit the needs of a specific industry, so a chatbot used by a healthcare organization will not be the same one you would want for your eCommerce business.

3. Start simple. Create a chatbot to handle basic customer requests that form the bulk of your customers’ interactions. Once the chatbot has been operational for a while, review the chat logs to detect patterns and trends, and then decide if you want to add further refinements or develop new chatbots to handle other tasks.

4. Don’t reinvent the wheel. Think of chatbots as a way to streamline basic business interactions, not add complicated and unnecessary bells and whistles.

Personalized Fulfillment Warehouse Services for a High-Tech World

Are you tired of fulfillment warehouse companies that treat you like nothing more than a number? At Medallion Fulfillment & Logistics, we consider ourselves a partner in your success, so your specific needs are our first priority.

Contact us to learn more about our cost-effective, flexible and scalable fulfillment warehouse services.

4 More Signs it’s Time to Outsource Fulfillment

Questions on Amazon

There are many reasons your business may consider outsourcing to a fulfillment service. The most important, although difficult to monetize, is time. Once your business has grown beyond the startup phase and begun to sustain itself, prioritizing your time, and that of your employees or partners, is crucial to continued success.

In addition to needing time to concentrate on business growth, here are four more signs that it is time to outsource your fulfillment.

Too Many Questions

You are an expert in your field. Your business knows its target markets and has a plan in place to increase sales. As your product offering widens and your customer base grows, your orders become less homogeneous. Soon you intend to pursue wholesale customers, increasing the variety even further. All of these changes bring questions.

What is the best shipping method for wholesale orders? Is it the same as retail orders? Should we use the same carrier for all packages to increase volume discounts, or can we save money in other ways? Do we need to stock more shipping box sizes? And, above all, are we paying too much for shipping?

A reliable fulfillment service already has the answers to your questions and will allow you time to market your business and develop your assets.

The Sea of Rising Costs

Shipping costs have risen over 60% in less than a decade. Many companies spend 10-12% of their revenue on shipping costs alone. Utilizing different carriers for different shipping scenarios can save money, but diffuses your volume discounts for a single business.

An established fulfillment service is able to offer discounted freight rates based on the volume they handle for all clients together. Leveraging this power in numbers will save your business more money than it can earn from its own volume discounts for many years, if not indefinitely.

As sales grow, many related costs increase: the staffing costs to pack and ship orders, packaging materials, storage space, shipping costs, returns processing, and more. This is in addition to advertising and marketing costs, manufacturing, freight, web development, legal and other expenses. And time, the most precious and nonrenewable resource. When the fulfillment need begins to drain resources, outsourcing is the decisive action that consolidates and manages these costs into one bill, one concern, one (very important) cog in the wheel.

A Barrier to Growth

Expanding to new markets and marketplaces requires planning and logistics management. The software integrations alone can save valuable time for a growing business. Third-party logistics partners (3PLs) like Sprocket Express have existing software integrations that can take your orders directly from most any shopping cart or marketplace and automatically process the orders through their system.

With expansion, peak season traffic also increases. This is great news for your business, but is your in-house capability ready for the heightened activity? With a professional fulfillment partner, your business can focus on promotions and social media, rather than shipping orders during busy times. They will have seasonal staff on hand to meet the demand and they have regular pickup, plenty of packing materials, and the experience to keep the whole thing running smoothly.

Trying to forge ahead once your business reaches the tipping point can impede your success. It’s like trying to start two businesses- one in your field and one in the fulfillment field. If that idea resonated with you, it is probably time to outsource.

Warehouse Space

Depending on your product line, warehouse space may become a concern early in the game. For businesses that import containers of goods, storage space is key. If your products are small and/or purchased in small quantities, it may not be urgent to find a separate location for storage. For those that deal with large items or quantities, a professional warehouse is immensely helpful. Over time, it will save money to use a warehouse rather than your own business space to house inventory.

Conclusion

Recreating a knowledgeable and experienced shipping department is a deviation of resources, both time and money. Once you have taken hold in your market, diverting your focus to this task may not be the best course of action. Outsourcing fulfillment at this crucial moment can streamline your operations and provide room to scale.

If you are ready to consider outsourcing your order fulfillment, contact us for more information.

Sprocket Express is a division of Medallion Enterprises and owned by Medallion Fulfillment & Logistics.