Choosing A 3PL: The Questions That Matter
Category
Operations
Published by
Tom Emmanuel
Read Time
6 Minutes
Most 3PL selections are decided on pick and pack price. That is the number least likely to determine whether the relationship works, and the one most likely to change once you are live.
Tom Emmanuel
Founder, Furnace Commerce
What to ask before price
What is your accuracy, and how is it measured?
Ask for pick accuracy and on-time dispatch as measured over the last quarter, not a target. We hold partners above 98% fulfilment accuracy, and the ones who cannot produce the number usually cannot hit it either.
Can you meet marketplace cut-offs?
Amazon Seller Fulfilled Prime, TikTok Shop and most marketplace SLAs have dispatch requirements stricter than standard DTC. A warehouse that cannot meet them will cost you the channel, not just the order.
What does your integration actually do?
There is a large gap between a partner with a native, supported integration and one that will build something bespoke. Ask what happens when a marketplace changes its API, and who pays.
How do you handle returns?
Returns processing is where margin quietly disappears. Ask how returned stock is inspected, graded and put back into sellable inventory, and how quickly that shows in the stock feed.
Price matters, but a cheap pick rate with poor accuracy and slow returns processing costs more than a higher rate that works. The expensive failures are operational, not commercial.
Managing the relationship afterwards
Agree the reporting before go-live
Weekly accuracy, on-time dispatch and stock discrepancy reporting should be agreed in the contract. Asking for it later, once there is a problem, rarely produces it.
Reconcile stock monthly, not annually
Discrepancies compound. A monthly reconciliation between your system, the marketplace and the warehouse catches shrinkage and receiving errors while they are still traceable.
Plan the peak conversation in September
Capacity, cut-offs and additional labour for Q4 need agreeing months ahead. Warehouses allocate peak capacity to the clients who asked first.
Keep an exit in mind
Know what it would take to move: notice period, stock transfer cost, integration rebuild. A relationship you cannot leave is one you cannot negotiate.
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