Pick and Pack Services

Pick and Pack Services: 9 steps to find the right vendor

The e commerce industry is booming and shows no signs of slowing down. This has led to a corresponding increase in demand for pick and pack services. Warehouses need to be able to cope with this demand and provide quick, cost-effective, and accurate services in order to ensure timely ecommerce fulfilment. There are many factors which you must consider before zeroing in on a service provider. This blog post will help you understand how to find the right pick and pack services in Toronto, Mississauga or Brampton for your business by outlining 9 key considerations:

1. Type of Products You Sell

The first consideration is understanding what types of products you sell. This will determine the size, weight, fragility, and other characteristics of the kind of warehousing you need along with the expertise you seek from the pick and pack services company to help optimize material handling time without drastically increasing cost of operations.

For instance, a fashion Jewellery Brand may require services entailing delicate material handling, discreet and durable packaging in small boxes or tubes along with different kind of insurance coverage as compared to a Baking Supplies company which may require a different set of warehousing service entirely.

Another key factor affecting your decision would be Frequency of pick and pack services being used. This essentially translates into a direct cost benefit analysis partially which comprises of how much is your cost to sell and transport a product thereby impacting your profitability. Frequency is seldom determined by the size of the operations i.e. a smaller company may not require the high capacity of a large warehouse whereas a large company with several orders per hour or per day, would not find it feasible to work with a pick and pack services provider below certain benchmarks.

2. Warehouse Location & Customer Density

Another reason to pick a good location for your warehouse is the density of your customer base. If you have a lot of customers in one area, it may be beneficial to be closer to them so you can make deliveries more quickly and efficiently. This also cuts down on shipping costs, which can add up if you’re constantly sending packages long distances. Of course, this all depends on the size and scope of your business – if you only sell locally, then a central location may not be as important. But if you have customers all over the country or even internationally, it’s worth considering how close they are to your warehouse when making a decision about where to set up shop.

At the end of the day, there’s no perfect formula for choosing the perfect warehouse location. It all depends on your specific business and what will work best for you. But if you keep these factors in mind, you’ll be well on your way to finding a spot that’s just right for your needs.
The other aspect of Location is cost of warehouse operations. For instance, if you look for Warehousing in Toronto, Warehousing Mississauga, Warehousing Brampton, Warehousing Milton, Warehousing Scarborough, Warehousing Cornwall, Warehousing Montreal or Warehousing Windsor – the prices for pick and pack services would vary from anywhere 10% to 50% depending on various factors like leasing costs, cost of utilities, area classification, proximity to the airport, rail terminal, port and highways.
So unless any of the above factors especially proximity play a vital role in the efficiency of your operation, you should consider a warehouse location which serves the biggest density of your customers.

3. Transparency of Operations

Pick and Pack Services is relatively a new sector for the warehousing & logistics industry which is 100 or more years old and because of which certain costs or estimates may not be accurately shared, preset or even calculated by an ecommerce fulfilment warehouse not necessarily because of transparency but may be due to lack of experience and expertise in the pick and pack services offering as a whole.
It’s best to have absolute figures set in rate cards for regular tasks that you expect your pick and pack services provider to perform and if there are out of the ordinary tasks then the labour rate per hour should be preset along with a reasonable effort description shared with the client in order to avoid surprise invoices with huge numbers.

4. Service Quality

E Commerce Logistics Providers generally work with and aspire to improve operational efficiency since they need to make sure multiple utilization of space, labour, capital and time so as to increase their revenue without increasing costs. Pick and Pack Services is essentially a wing of Warehousing which focusses on, on-demand and accurate execution of material handling assignments and the service provider charges the client a premium for making sure that orders are executed as expected.
Although it is not possible to expect to know the service quality of a prospective pick and pack services company but there are indirect ways of assessing their commitment to quality and proven track record:

  • a. Ask for Client References – You may need to sign an Non-Disclosure Agreement and/or Privacy Protection Agreement depending on your local and federal regulations .
  • b. Ask for Specific Proposal and Contract – Professionalism comes from experience and experience is the foundation of a good warehousing company.
  • c. Browse Online Client Reviews on Google Reviews, G2, Clutch, Yelp, etc to get a direct representation of how the warehousing company conducts business however do consider the authenticity of such reviews.
  • d. Browse Online Employee Reviews on Glassdoor, Vault, Blind, Comparably, etc to get an indirect stand point on how the warehousing company manages their internal working with employees however do consider the authenticity of such reviews.
  • e.Request a Trial Period – If the company is confident of their management skills in Pick and Pack Services, they should be comfortable in offering you a 30 day or 90 day short term contract without locking you in a long term arrangement. This proves fruitful to both parties as it gives the necessary confidence to the client as well as allows the warehousing company to fine-tune their operations team to better suit the client’s requirement and usage patterns.

5. Sales Channels

Various sales channels require similar or different kind of warehousing as business requirements and sometimes based on commercial viability. You need to select the right kind of warehousing for e commerce as it depends on the sales channels you work with whether single or multiple. Here’s a quick list of Sales Channels and recommended Warehousing Solutions:

Sales Channel Recommend Warehousing
Amazon FBM (Fulfilment by Merchant) Pick and Pack, Ecommerce Fulfillment Warehouse
Amazon FBA (Fulfilment by Amazon)
Own Website E Commerce E Commerce Fulfilment Warehouse
Wholesale (Offline) Traditional Warehousing Services, Cross Docking, Short Term Storage

6. Security of Product

The nature and value of your product determine how elaborate is the security requirement. Keeping that in mind, if we were to grade general security standards of generic merchandise or something which is not as precious as gemstones or jewellery – you would want to select a pick and pack services company which offers at least the basic grade of security standards including inventory incoming and outgoing protocols and documentation, bi weekly or monthly inventory reports, no entry of unauthorized personnel in the pick and pack section or the ecommerce fulfillment warehouse section. The two primary security concerns should be theft as well as tampering and the storage areas should be covered by CCTV with at least 6 months of footage being recorded and available for reference in the event of any untoward incident.

7. Pricing and Affordability

The best may not the most expensive and vice versa. With a wide variety of warehouses provided pick and pack services and evaluating suppliers available from different Warehouse Classification Tiers, comparing them may get complicated as warehouse companies often have different proposal structures, terminologies and rate cards.

One easy quick solution is to prepare a common RFQ and invite prospective vendors to submit their proposal in a common format following which you can compare prices and deliverables received along with their company credentials and warehouse certifications if any, to decide your top 3 preferences.
Conduct a physical or virtual tour to determine the authenticity of the vendor along with feasibility for warehousing for e commerce inline with your expected pick and pack services that the vendor is expected to perform.
After conducting one or two rounds of this, you should have a relatively informed decision which is the best fit for your pick pack and ship requirements. Conclusively, when comparing prices of the top 3 vendors, you need to consider the overall cost of pick, pack and ship which adds to the overall costing of your product before sales and may be different for different sales channels.

8. Insurance

Insurance can be as generic and specific as the insurer desires. Based on this understanding, warehouses generally have a substantial coverage in the event of a fire, theft or mishap which covers them to the most part of the operational requirements of a pick and pack services warehouse. However, if you require a specific insurance for your specific product, by virtue of it’s value or movement or storage risks, then consider the factors that your insurance company considers as the warehouse facility being low, medium or high risk – thereby calculating your insurance premium. Additionally, location of the warehouse also plays a vital role in the calculation of insurance as certain areas may be prone to theft, reported crime incidents and/or poor weather causing frequent damage claims.

9. Growth Prospects

An important aspect of this decision which is often overlooked by decision makers looking for the rights companies offering pick and pack services, is to evaluate on a growth scale, your company’s current size and dynamics along with that of your prospective vendor.
As your company’s structure and demand grows, it is beneficial to have a warehousing vendor which also grows at a similar pace and size that of yours as it generates a sense of complimentary growth and reduces the pressure of any one side reconsidering their business relationship with the other.
Growing companies have a ‘tick’ like growth structure where the downward slope becomes riskier, capital intensive and requires intelligence and hard work to pull to the other size whether it means getting more clients to increase sales and profitability or finder better vendors to reduce costs. If companies of similar stature align their interests, then the chances of growth for both, the client and the warehouse fulfillment company increase in general perception.

Finding the right pick and pack services company is both an easy and a difficult task because ultimately you need to try out an established and suitable vendor that matches all your requirements and proposes the most cost-efficient pricing structure which matches your costing structure to maintain viability of e commerce order fulfilment without compromising the competitiveness of your final product landed price to the end consumer.

About Raj Anand

The author is an experienced professional with over 30 years experience in the warehousing and logistics industry. He writes about latest trends in warehouse operations including technology, e commerce and fulfilment centers in Canada.

View all posts by Raj Anand

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