Ten things to look for when choosing a fulfilment house

By Chris Dawson October 4, 2017 - 11:00 am

Jan Strassen runs, a multichannel solution for marketplace sellers, as well as Integrated Labels who supply integrated label sheets for combined invoice and postage label printing.

Jan has been using a fulfilment house to send parcels for many years now, here are her top 10 things to look out for when you are choosing fulfilment house for your business:

1) Pricing

Some or all of the following charges will apply:

Picking Charge

The amount charged for collecting each item in the order from the warehouse ready to be packed, some couriers will charge a single amount per order, some on order value and some on total items in the order. If you sell low cost items this charge can become significant.

Packing Charge

The amount charged for putting the items into a box and getting it ready for delivery.

Packaging Charge

The cost of the materials used to send the items out in.

Delivery Charge

The cost of the actual delivery, this can be either on a consignment basis where you are charged for the weight of the parcel no matter how many parcels you send out or on a per parcel charge where you are charged by the weight of each box in an order.

Admin charge

A general amount added to each parcel sent to cover general admin costs

Storage charge

The cost to store your products in the warehouse, usually based on a pallet per month basis.

Run some scenarios based on your products and volume to make sure that you are getting a good deal, if the prices seem very very good, check for hidden costs such as the admin costs.

2) Couriers

Relationship with the courier is important, you will either continue to run with your own account or move over to use the warehouses courier; there are benefits to both approaches

Using your own courier

  • You can keep your rates, if you have negotiated a great rate you can continue to use it.
  • You are in control of the delivery, you can track it, you can contact the courier about to resolve issues, this isn’t always the case if you use the fulfilment house’s courier.
  • Your details are used on any automated emails send out to your customers.

Using the fulfilment house’s couriers

  • You may be access to better rates because the warehouse will have a bigger throughput of parcels than you do.
  • You may have access to more couriers than you currently do.
  • You may not be able to directly contact the courier to deal with tracking issues and so will have to go through the fulfilment house to chase problems.
  • Courier emails may not have your branding on them which could confuse your customers or even result in your not being able to send them to your customers.

3) Appearance of fulfilment house’s warehouse

Always visit the premises, does it look organised, it is clean, does it have enough spare space for your products.

4) Picking Validation

Ideally they will use a double scan barcode system, so they have a barcode on the shelf (or on the item) and a barcode on the picking list and they scan both when they pick the item. This can greatly reduce picking errors.

5) Guarantee

Some companies will offer you a service level guarantee, so for example they might guarantee to send the correct goods out 95% of the time, any issues within this percentage you will be responsible for, any outside they will be responsible for. Pay particular attention to what happens if they send the incorrect items out, ideally they will arrange to collect the wrong items and send the right ones at their own expense but not everyone does this, some will charge you.

6) Returns

What happens if a parcel is returned, do you have to pay restocking fees, will it be repackaged and sent out again.

7) Packing

Can they send your goods out in branded packaging, are you happy with the materials they use and the methods they use to pack out boxes that are not completely filled.

8) Holiday cover

Check what happens during holiday periods, they are often the busiest times, can they still get your parcels out or do they close.

9) Staff

If the company has a high staff turnover, you may see repeated degradation in the quality of the service you receive. Check what happens in the busiest time, if they bring a lot of temporary staff in over the Christmas period for example you might also find that you have problems with delivery at that time.

10) Technology

How will you get your orders to the warehouse, how will they get details of deliveries, tracking numbers etc back to you. Ideally this will be automated, your order processing software will connect to their systems. Avoid anything that involves re-keying order information because this may cause errors to occur, potentially causing your deliveries to fail or the wrong items to be sent. Our order processing software, One Stop Order Processing can easily be configured to work with most drop ship systems, use it to streamline your business and move towards full automation.

Jan’s Story

We sell Integrated Label Paper and use Dalepak to send out our parcels. We found them through the Tamebay Guide and have been working with them for several years now. We use their courier rates because they are much lower than ours. We use our software One Stop Order Processing to automatically send orders over twice a day and we track using the courier’s online tracking systems with our own references. It works really well for us, very few mistakes are made, we do see a few issues around Christmas but the volume of parcels at that time of year is much greater.

As a small business, using a third party to ship our parcels really helps us, we are no longer limited on warehouse space, we can grow without having to be concerned about bringing more staff onboard, we have more courier options available to us and we spend less money.

  • 4 years ago

    Scalability is key – choose a provider that has the infrastructure and systems in place to support your medium to long term growth plans – not just your current profile.

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