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How to Choose the Best Fulfillment House (For Your Project)

By Veronika Noize, the Marketing Coach


You have a marketing program to execute.  Maybe you're running a sweepstakes promotion, warranty registration, literature fulfillment, or you might even be selling products online.  In order to bring this program in on time and within budget, you'll need access to some highly sophisticated software and equipment, plenty of warehouse and production space, plus a few additional helping hands to get the project out the door. And oh yeah, you only need these resources for the length of the program. But you need them now! So how do you maximize results while minimizing costs (not to mention the impact on internal resources)?  You use third-party fulfillment (3PF), of course.


There are dozens of options available in 3PF, some with a full range of resources, and some that focus on a few related services.  But which is best for you?  If you're not going to use the fulfillment house's call center, for example, are you better off choosing a vendor that has a smaller, more focused menu of services and no call center?  Or is the full-service provider the best option? What about software compatibility?  Is the sales person the same as your customer service person?  Does it matter?  So many details! You're probably wondering why you can't just choose the vendor with the biggest ad or best web site and hope for the best.


Believe it or not, that is one strategy used by many marketers.  But is it the right strategy for you?  Probably not, and here's why: Poor service, cost over-runs, delays and customer frustration are the inevitable results if you don't make the right choice in your 3PF selection process.  And at the end of the day, what's most important in your choice of a 3PF vendor is that you get what you want, need and expect.


So how do you choose which is best for you?  Here is an insider's quick five-step guide to making an informed decision when making your 3PF choice.


1. Document your program requirements.  You will probably need to prepare an RFP (Request for Proposal) if your project is large or complex.  Smaller, simpler programs can make do with an outline of the program. Remember that the success of your program actually rests with you, starting your understanding of and ability to communicate all the elements of your program to your vendor.


It has been said that it is impossible to provide your vendors with too much information, but poorly organized information is often worse than too little.  Keep in mind that assumptions can seriously complicate the process, too, so don't assume anything is included or understood.  Since 3PF houses are paid by the service or action, nothing can be left to chance.  What may seem like common sense to you is not really a consideration for the fulfillment house; they usually work with limited information and perform tasks and services for which they may not know the intended results.  The more information they have, the better decisions they can make in creating functional, cost-effective programs that achieve the results you want.


2. Request bids from vendors.  Now that you've got an RFP or an outline, request bids from at least six vendors, and be specific about how you want the information presented.  Ask for references, and specify that the references relate to programs similar in size or complexity to yours.  Many fulfillment houses also do mailings, but a reference from a satisfied mailing customer when your project is all about sweepstakes is really no reference.


3. Review and compare the bids.  If all bidders have complied with your requests, you should be able to compare "apples to apples." Once you have determined which vendors meet your basic needs in terms of capabilities, then you can compare costs.  Look for complete responses to your questions, and projected monthly or per project costs.  Any fulfillment house that just gives you per unit pricing and then expects you to figure out the details is not customer-service oriented.  That's a red flag right there.


Pricing is fairly standard in the industry, so beware of very low bids.  Either they misunderstood your specifications (not a good sign) or you may be in for an unpleasant surprise when the invoices start rolling in.  Very high bids may also have misunderstood the specifications, or they may have bid on the full program when others did not.  Look closely at the unit costs and billable services to be sure that they didn't catch something that others missed (hey, it happens!).


4. Check references.  Call at least three references for each vendor under consideration.  Naturally you'll want to ask how satisfied they were with overall service levels.  Also ask if there were any surprises in the project, particularly from a cost or delivery perspective. And ask if the reference-giver were to take a job with another company, would he or she automatically call this vendor again, or be interested in trying another fulfillment vendor.  This last issue is very telling, and indicates the overall satisfaction level that other questions might not.


5. Visit the finalists. Once you've identified the top three vendors, request site tours.  Depending on your familiarity with 3PF providers, site visits can take from one to six hours.  At the very least, you'll want to walk through the facility, meet with operations and client services staff, view an electronic systems presentation, and discuss any issues not covered in your RFP.  As you walk through the building, pay attention to how organized the place seems.  Is it tidy?  Are there overflowing boxes in corridors? Are people screaming for assistance or supplies?  Observe the morale of the staff as they go about their duties.  Are they happy?  Sad?  Are they moving quickly, or dragging their sorry selves around at a snail's pace?  Watch how the assembly or packing lines work. Are they adequately staffed?  Is the line moving quickly and smoothly?  All of these should give you a general impression of how business is done at the company, and only you can decide if this is an appropriate alliance for your business.


Spending the effort to complete this selection process will pay off in time, effort and cost savings.  But even with all bases covered, the potential for misinterpretation and error still exists, so be sure that both you and your 3PF vendor share an understanding of the expectations, critical elements, and timelines for your program. 


A final word of advice:  Be scrupulous in your documentation, and insist that your vendor do so as well.  Be sure that all instructions are issued and acknowledged in writing. You'll both appreciate the clarity, not to mention the paper trail.  


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HOW TO CHOOSE THE BEST FULFILLMENT HOUSE copyright 2002 Veronika Noize.  All rights reserved.   

"I help small businesses attract more clients."
~Veronika Noize, the Virtual Marketing Coach

Veronika Noize LLC
The Virtual Marketing Coach

2643 Beaver Ave · PMB 338 · Des Moines IA 50310  · USA

360-882-1298 voice