14 Considerations When Looking at Pick and Pack Services

Cardboard BoxThere are a plethora of pick and pack services available. Some of have produced their offering from the position of being the operators of a warehouse and then added on technology solutions, whilst others initially created shopping carts and then added warehouse integrations, whilst we have, as a group, have a history of focusing on the delivery aspect of the fulfilment process.

When it comes to choosing a pick and pack service it may be important to some degree to consider which side of the equation the initial expertise lies, however, there are more important factors to consider which directly affects their suitability to  your needs. We’ve established fourteen questions that you should be asking yourself:

  1. Fundamentally, does the pick and pack system seamlessly process inbound orders and turn them into delivered orders?
    If a solution doesn’t take orders from your ecommerce platform, process them according to user-set rules and despatch them on time and at a reasonable price then you shouldn’t look any further. It is absolutely vital that you go through the flow of order processing with any potential provider. Ask them how ecommerce integrations take place, what human interactions are required and how the courier is chosen and at what rates the items will be shipped at?
  2. How do I get my products into the warehouse and get the ball rolling on automatic despatch?
    Another crucial aspect is that you understand the process of transferring stock into a new facility. All systems will have their own characteristics when it comes to barcoding, labelling and goods inbound. Discuss with your potential supplier how you will move your current stock into the warehouse, but also how you will process goods inbound from your suppliers. Ensure that you are happy with the process and the price of this. Also ensure you are aware of the specific requirements when it comes to labelling products inbound.
  3. Work through costing scenarios.
    Pick three or four months throughout the year and gauge how much stock you will have and how many items you ship and then ask for indicative costs based on that data. Give as much detail as you can as this will allow for greater accuracy. The notion of handing over the fulfilment headache to a third party may be attractive, however, you do need to make sure you are aware of the costs (as well as the savings).
  4. Which shipping options do you have?
    Customers love flexibility. The flip-side of flexibility is The Paradox of Choice. Giving your customers just the right amount of choice when it comes to delivery doesn’t have to match the variety of choice you have as a retailer. Given automated systems and algorithms that lay behind the scenes you may want to give your customer, say, four delivery options, but the pick, pack and fulfilment solution may take the chosen delivery service level and optimise it against a range of couriers. The customer will still get their order when they choose, however, the actual courier used may depend on the size, weight and the contents of the order – all with the aim of reducing the incremental shipping costs. Ensure you ask about how the potential service provider optimises shipping.
  5. What are those shipping prices?
    You would have received a quote based on the storage capacity and items despatched on the past. But what about projections? If you currently only have customers in the UK, what would the shipping costs be to the rest of Europe? What would they be like to Japan, Brazil etc? Similarly if you only retail small items such as HDMI cables, what would your costs be like if you started selling larger items such as DAB Radios? What would the per unit picking costs be and what would the per order despatch rates look like?
  6. How are items packed?
    Every retailer has their own views on how items will be packed. However, when you outsource the fulfilment process then you will need to make sure you ask how items are packed – what sort of filler they use, do they use single or double-walled boxes, do they use over-sized boxes, etc.
  7. Find out which carriers the service provider offers and what tracking is available.
    Some retailers have a preference of courier so ensure that those available meet your approval and check what sort of tracking is available and how you present that information to your customers.
  8. What oversight do you have?
    Knowing where your stock is, what stock is inbound to the warehouse, downloading your current stock levels is absolutely key. Ensure you ask what reporting features you have and who, within your company has access to them.
  9. How are you billed?
    Are you required to pay up front and draw down a balance, can you purchase ad-hoc top-ups, can you set up automatic billing, what notifications are issued and who gets them? Also make sure what sort of financial reporting is available to keep the accounts department happy?
  10. How do you handle cancelled and returned orders?
    If the despatch process is automatic, can you turn it into a semi-automatic approval process so that you can run your own checks before despatch. Also ask what options you have if a customer cancels an order before and after it has been despatched. And when it comes to returned items – what are the processes and costs for managing this.
  11. What marketing channels, if any, does the software solution integrate with?
    There are seemingly new channels, such as eBay, Amazon, Play.com etc., appearing all the time. If you plan to use these it is essential to establish what sort of integrations are possible or come as standard. You should also ask about how you can customise your integrations.
  12. How do you connect your store to the system?
    Every retailer will have differing technical resources. If your available resource is limited then ask the potential supplier how difficult it is to integrate, what documentation they have available and if they can help provide some guidance. You may also want to ask them to check the integration from your own side to highlight any potential issues and pitfalls.
  13. What is the customer service like?
    Do you have a dedicated account manager, can they answer technical problems, can they help with integration issues, and can they help you with the process of adding new stock to the warehouse. Are they there for you, do you get on with them?
  14. If it does go wrong, how can you back out?
    Make sure that you do read the terms and conditions thoroughly. If you outgrow the service or it doesn’t work as you would like, how do you exit from the service and at what cost?

Many of the questions above you may have thought of, but what you may not have considered is documenting each of the answers, and the new questions that arise as a result of your discussions. Set out a spreadsheet featuring all of the potential providers and gauge them against all of your essential requirements, as well as those ‘would likes’. This matrix will become crucial when you have to justify your decision.

Image © Ian Farrell