The Logistics of Logistics REPOST: Selecting an E-commerce Fulfillment Partner with AJ Khanijow
AJ Khanijow and Joe Lynch discuss selecting an e-commerce fulfillment partner. For e-commerce companies the difference between success and failure is fulfillment. As the founder of an fulfillment company that specializing in e-commerce, AJ knows what companies should look for in an e-commerce fulfillment partner.
About AJ KhanijowAJ Khanijow is the founder of Fulfyld, a warehousing and fulfillment company based in Huntsville, Alabama. AJ and his team at Fulfyld specialize in e-commerce fulfillment. Prior to founding Fulfyld, AJ held business development and leadership positions in the manufacturing, technology, packaging and consulting industries. AJ earned an industrial engineering degree from Auburn University.
About FulfyldBased in Huntsville, Alabama, Fulfyld has offered e-commerce fulfillment services for every step of the supply chain since 2016. Our customers range from local to global companies, each with unique e-commerce fulfillment needs. Fulfyld integrates directly with e-commerce marketplaces and shopping carts to simplify your shipping process. We ship same-day, every day, for one flat-rate.
Key Takeaways - Selecting an E-commerce Fulfillment Partner- First e-commerce companies should conduct a thorough internal assessment of their company to determine what they want from an e-commerce fulfillment partner. Companies should understand all the moving parts internally and what exactly your partner is going to be doing vs what will be managed in-house.
- Next, determine suitable locations for e-commerce fulfillment. Fulfillment locations should be close to carrier transportation hubs, ports, customers, and suppliers.
- Decide if you would like to fulfill externally or internally. Figure out how your ERP and e-commerce platform will integrate with your e-commerce fulfillment partner.
- Cultural Fit: How does your business fit within the culture of your fulfillment partner? I always look to see if I can hang out with potential partners, that way you knows if it will be a good fit.
- Range of Services: Ensure they offer all the services necessary for your supply chain to succeed. If your partner makes a critical mistake, it could be detrimental to your business.
- Third-Party Logistics: Will they be able to accommodate all of your SKUs?
- Technology Integration: Many traditional 3PLs specialize in TL and LTL shipping so their systems may not be suitable for managing small parcel shipments. Booking a dozen TL shipments is very different from processing thousands of small parcel shipments. To manage that volume of customer orders, you must have the right systems (technology) for the job.
- Location: Your partner needs to be in close proximity to the carrier terminals. For instance, Huntsville is great for us because it is close to three of the biggest hubs (terminals) for small parcel carriers: Louisville, Memphis, and Atlanta. Make sure you are in a state that is low cost and good for business. The labor rate in L.A. is almost double what it is in Alabama.
- Dedicated Customer Service: The ability to pick up the phone and talk to someone who is dedicated to your account is something I highly recommend. Essentially, your e-commerce fulfillment partner is running your supply chain so communication is critical. Problems must be identified and solved quickly, which means you can't be directed to a call center - you need an account manager who knows your business.
- E-commerce Experience: Having experience in the e-commerce business is a requirement. E-commerce companies are usually young companies, so they need to select an e-commerce fulfillment partner who is experienced in e-commerce fulfillment, small parcel and B2C shipping. There are large, established 3PLs who have great capabilities but know very little about e-commerce fulfillment.
- Operational Excellence: To be successful, your fulfillment partner must have great operations. Ask questions about how they manage orders. Do they have defined processes? Does their technology and order management system allow you to view things in real time? Do they have relationships with the small parcel carriers?
- Reputation and References: Ask your prospective partner for references and talk to some of their current customers. Check out their LinkedIn company page and look at LinkedIn profiles for some of their employees. LinkedIn can tell you quite a bit about the size and capability of a company.
- Contract: Review their contract and determine if it is fair. Is the contract biased and filled with unnecessary legal jargon? Are you being charged ridiculous fees? If you are picking a strategic partner, the contract shouldn't be transactional. Make sure the contract is transparent and your interests are aligned.
- Engage the Cross-functional Team: Perhaps the most important thing you can do when selecting an e-commerce fulfillment partner is to engage the cross-functional team (accounting, sales, engineering, operations, etc..) in the process. An e-commerce fulfillment partner is an extension of your company and it touches virtually every function, so get input from each functional area. Your e-commerce fulfillment partner is the beating heart of the business because they are ones who convert an order into delivery and hopefully a satisfied customer.
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