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Date: 2016-08-12

How to Choose the Right 3PL

Many smaller companies with e-commerce ambitions fret about payment and shipping issues, especially when orders arrive from buyers in other countries.

One shipper told us that he and his small staff spend valuable time double-checking credit card transactions, many of which, turn out to be fraudulent.  Another new business killer is shipping rates.  It is expensive to ship around across the world, and if you don't know the tricks, buyers may abandon you at checkout.

Luckily, an array of new logistics providers has arrived, and for a price they will do what you'd rather not.  They are called 3PLs, or Third Party Logistics Providers. Yes, at one time they were for larger companies, but not anymore.  Today, they gladly cater to the smaller exporter, and their online tools are easy to use and to integrate with your website.

Because there are now so many choices at different price points, it's a good idea to rank them with a simple checklist.

1.  Accepts multiple international payment options, including PayPal.  Payment companies will screen each transaction via their fraud filters and are on the hook if they accept payments that they shouldn’t.

How do you say “Buy Now”?

2.  Offer Language Translation.  Many online buyers are most comfortable buying in their own language.  Those comfortable buying in English are a distinct, though still numerous, minority.

3.  Freight consolidation.  Considerable savings can be realized when your goods are sent with someone else's going to the same destination.  Repacking your goods may be another service offered, but it's cheaper for you to learn how to do lean packaging so that your customer is not paying for unnecessary cardboard and air.

4.  Inventory management across platforms.  Chances are that WPG isn't the only marketplace you're selling on, or will be in the future.  Many 3PLs offer inventory management systems that you can run via a dashboard on your PC or wireless device.  As your marketplaces and sales volume grow, you'll have more things or SKUs to keep track of.  A good system will ensure that you minimize back orders and overstocked items, both indicators of poor inventory management.

5.  Handles returns in accordance with your returns policy.  Maybe your policy is to not accept international returns.  Fair enough; but increasingly consumers worldwide expect it and will reward their business to vendors who do.

6.  Ease-of-use of the checkout app.   Make sure the instructions for uploading are clear, and that help is readily available.

7.  The checkout app features a choice of branding (yours or the 3PLs, if advantageous for establishing trust).  Consider a name brand 3PL for the sake of your international customer.  According to a recent study sponsored by FedEx, many international buyers, especially in Asia, are hesitant to purchase from small, unknown websites.  You already have a trusted brand friend in the form of WPG.  Consider adding other trusted brands for your shipping, logistics and payment option needs.

Shop around, and compare 3PL prices.  Then consider the opportunity costs of doing it all yourself.


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