Practical Ecommerce

My search for a third-party fulfillment company

I can’t help but reflect on this time last year as one of my greatest ecommerce successes. The Stupid Cancer store had rounded a corner of success that there was apparently no coming back from. But we needed help keeping up with an increasing flow of orders.

My search for a third-party fulfillment company — 3PL — started months earlier, after I attended the eTail West conference. I met staff from a larger 3PL at the event, who determined our sales volume was too small for their company. They referred me to several other options across the country.

I’ve learned that there are many factors to consider when selecting a fulfillment company. Location is most important consideration. As I tried to make an informed decision, I found that we ship most frequently to California. However, the Stupid Cancer headquarters is in lower Manhattan. Ultimately, I opted for a warehouse in the northeast U.S.

Once I selected the region, I began to drill down on the minutiae. First and foremost, the entire fulfillment process had to be automated. I received several proposals from 3PLs that described a manual CSV export with order information from Bigcommerce, our shopping cart, and a manual import to the 3PL — every day. Those 3PLs were the first to go.

Throughout the selection process, I had to keep revisiting the fact that I was outsourcing fulfillment to save time. Ultimately, Stupid Cancer is a nonprofit with a mission, not an apparel company. While the store exists for several reasons, it shouldn’t take away valuable internal resources.

Our bread-and-butter products in the store are t-shirts and hooded sweatshirts. Both items are sent to us in bulk.

After a few phone calls, I began to reconsider the idea of outsourced fulfillment. There was one constant throughout each sales pitch that left me puzzled: For 3PLs to come in at the price we wanted, we would need to bag and bar code our items. This would add to the cost of each item, which would shrink profit margins.

By this point in my search, I had made two key decisions. First, the 3PL needed to integrate with my store for an automated send and receive each day. Second, the 3PL warehouse needed to figure out by itself how to receive my merchandise.

Luckily, I found Karol Fulfillment Services in Wilkes-Barre, Pennsylvania. After some discussion and brainstorming, we jointly figured out how to make the Stupid Cancer inventory and order flow work for both parties. Karol met all of Stupid Cancer’s needs — location, automation, and accommodation.

As soon as the details were ironed out and contracts were signed, we put a transition plan together. Next month I’ll address our migration to Karol Fulfillment, as well as how we were able to begin shipping orders from the new location within 24 hours.

Kenny Kane

Kenny Kane

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  1. Adam Robinson July 22, 2015 Reply

    This was an enlightening post for me as a marketer for a 3PL. To hear a customer show how they selected a company is compelling. I love how you had your needs and looked for a 3PL who could match those needs. Thank you for sharing.

    For your e-commerce shipping thru BigCommerce, did you use a plugin and was this mostly small package/parcel shipping? I ask as we are actually working on extending our LTL application we have with Magento to more carts, and was curious how you liked BigCommerce or had a comparison to Magento. Thanks!

    • Kenny Kane July 22, 2015 Reply

      Hey Adam,

      Thanks for taking the time to read it! Our 3PL is using the DropStream plugin to connect Bigcommerce to Veracore, their fulfillment software.

      Happy to chat further. Feel free to reach out on Twitter or LinkedIn.

      Kenny

  2. Steve Bulger July 22, 2015 Reply

    Hey Kenny,

    Good post. You summed it up nicely when you mentioned you were looking for location, automation, and accommodation. I work for a 3PL and I find those same things mentioned repeatedly from merchants.

    You also bring up a great point regarding the automation with Bigcommerce. After all, when sellers outsource order fulfillment, generally they’re doing so, at least in part, to save themselves time. I also liked that you brought up the accommodation aspect, as it’s definitely important, and something I deal with all the time. Another goal merchants generally have when they outsource order fulfillment is to not have to touch the merchandise…they want it sent directly from their suppliers to their fulfillment center. And since many suppliers can’t conform to such labeling requirements, flexibility with the receiving process is often crucial.

    You mentioned Veracore. I’m curious, as a merchant, what has been your experience with that system? It’s a system I’ve been hearing more about, and wondering what kind of transparency and automation it allows for from a seller’s standpoint.

    Happy to chat further via Twitter, LinkedIn or email.

    Thanks,
    Steve Bulger

    • Gary Nickless July 23, 2015 Reply

      Hi Steve,

      We have recently setup a 3PL system with our bigcommerce store and are using a company called Shipwire. We use an app called Orderdesk in the middle to connect the two together and also have our ebay store sending orders directly into Shipwire to.

      Im just loving the whole “hands off” side of operations with dealing with a 3PL setup and we find efficiencies in shipping costs and delivery times using this setup for our store at http://www.lifestyleclotheslines.com.au

      Happy to chat further to but if you are in the market for a 3PL shipwire should be on your list to checkout.

      The other bonus with these guys is that they have this network of warehouese around the world, so Im already thinking how I can use this to my advantage and expand our operations further than just Australia.

      Hope this helps.

      • Kenny Kane July 25, 2015 Reply

        Thanks for reading, Gary!

        I just went through a product demo of SKUbana. Looks like an interesting new product. Might be worth taking a look at.

    • Kenny Kane July 25, 2015 Reply

      Sent you a LinkedIn message, Steve.

  3. Elizabeth Hollingsworth July 27, 2015 Reply

    As most of my wedding products are personalised, I cannot outsource to a 3PL company for fulfilment like Stupid Cancer can.
    However I am intrigued by your post, Kenny. Did you ever consider Amazon as a channel and a 3PL company in your shortlist?

    • Kenny Kane July 27, 2015 Reply

      Hey Elizabeth,

      I don’t currently sell on Amazon. While it could be advantageous, our market is very specific, and our customers know where to find the products.

      My 3PL used to refurbish wigs for a company. You may find that you could outsource some of the personalization to a warehouse depending on their core competencies and the intricacy of your personalization.

      Happy to chat further via Twitter or LinkedIn.

  4. Aley Raza July 29, 2015 Reply

    Hey Kenny,
    Interesting post. I am the owner of a 3PL. I am curious to know how did you work around the need to bag and bar code the t-shirts and sweatshirts.

    We do such projects for our clients all the time. While it costs money yet it is essential to do this before induction of inventory.
    Thanks
    Aley Raza

    • Kenny Kane July 30, 2015 Reply

      Hey Aley,

      Thanks for reading it!

      I’m not entirely sure what tactical steps my 3PL took to circumvent the barcoding other than helping me streamline my SKUs as well as clearly marking things on shelves and in bins.

      Happy to chat further about it!

      Kenny