June 20, 2012, 4:52 PM

When selecting a fulfillment provider, ask tough questions

Don’t be afraid to ask prospective vendors if they’ve lost customers—and why.

No matter how attractive an e-commerce site is, an inability to quickly fulfill orders can leave a retailer without much repeat business. So if an outside fulfillment provider is part of the game plan, choose wisely, fulfillment experts say.

If there’s one lesson to learn when choosing a fulfillment services provider, covering warehousing and pick-pack-ship operations, it’s not to make any assumptions regarding a vendor’s capabilities and its record in serving other retailers, Bill Shea, general manager, Wine Country Gift Baskets, and Mike Murray, senior vice president, operations, ShopNBC, said at the Internet Retailer 2012 Conference & Exhibition in a session titled “10 questions to ask you fulfillment provider.”

Retailers should ask to see evidence of such things as the accuracy of order fulfillment forecasts, and to view warehousing details such as the storage capacity, depth of SKUs that can be stored, and the operating efficiency of item picking and packing systems. “Do the math, and ask the operational folks, not the marketing folks,” at the prospective provider, Murray urged.

It’s also important to understand where the provider may have fallen short in services, and why, Shea said. Don’t hesitate to ask a vendor, “Have you lost any customers—why?” Shea suggested. And get the answer from someone directly involved with the former customer, if not the former customer itself.

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