Start with your own requirements
Choosing a logistics partner goes better when you know what you need before you speak to any provider. Write down the basics:
- Orders per day or month, now and in a realistic growth scenario, including peaks.
- Number of SKUs, typical order size and any items that are fragile, oversized, regulated or temperature-sensitive.
- Where your customers are and what delivery speeds they expect.
- Which services you want: storage, order picking, kitting, returns, labelling, international shipping.
- The systems you use, such as your online store and inventory tools.
- The service levels you would consider acceptable, for example order accuracy and dispatch times.
Without this list, every proposal looks plausible and comparison becomes guesswork.
Core criteria to compare
Capability and fit
Does the provider already handle products like yours? Experience with similar goods, order profiles and customers matters more than the length of a service list. A provider that mostly ships pallets to retailers may not suit a business sending thousands of small parcels to consumers, and the reverse can also be true.
Locations and network
Where the facilities are affects delivery times and shipping costs. A site close to your customers can shorten transit and reduce the number of zones a parcel crosses, which is why warehouse location matters so much. If you need several locations, ask how stock is split and who decides.
Technology and integration
Check whether the provider’s systems connect with your store and accounting tools, how inventory is reported and how quickly data updates. Ask for a demonstration with real examples. Review what tracking information your customers will see. Good warehouse management systems are common among established providers, but the integration with your own setup is where problems often appear.
Carrier relationships and rates
Ask which carriers the provider uses, whether you can choose among them and whether you can use your own accounts. Find out how its pricing relates to the underlying carrier charges, and whether it offers multi-carrier shipping so that it can match the service to each parcel.
Financial stability and insurance
A provider that fails financially can leave your stock and orders stranded. Ask about its financial standing, its insurance cover for stored goods and what liability it accepts for loss and damage. Read the actual terms, as limits per item or per shipment are common and may be lower than the value of your goods.
Quality and performance
Ask for the figures the provider tracks, such as order accuracy, on-time dispatch, inventory accuracy and damage rates, and how they are measured. Be cautious about figures that arrive without definitions. A rate quoted for the whole company may not reflect the site that would handle your goods.
Security and compliance
Check physical security, access controls, how inventory counts are done and how the provider protects data. If your products are subject to special rules, ask how the provider handles those and what certifications or audits it holds, then verify them rather than accepting a general statement.
Compare the total cost, not the headline rate
Providers present prices differently, so build a comparison on a single basis, such as the full cost per order for a typical month. Components to ask about include:
- Onboarding or setup fees.
- Receiving charges for inbound stock.
- Storage fees, and how they are calculated (per pallet, per bin, per cubic measure).
- Pick and pack fees, including extra items per order.
- Packaging materials and any special handling.
- Shipping charges and any markup on carrier rates.
- Returns processing.
- Minimum monthly fees or volume commitments.
- Charges for reports, integration work or account management.
Run your own order data through each quote. A provider with a low pick fee may be expensive once storage and minimums are added. Over time, a cost savings program can only be judged if you started from an accurate baseline.
Questions worth asking every candidate
- Who will be our day-to-day contact, and how quickly are problems answered?
- What happens during peak periods, and how did you cope last time?
- How do you handle damaged, lost or mis-picked orders, and who pays?
- How is inventory counted and reconciled, and how often?
- What reports will we receive, and can we access live data?
- What notice is required to end the contract, and how do we retrieve our stock?
- What would make you decline our business, and what do you expect from us?
How a provider answers can be as informative as the answers. Specific, candid replies are a better sign than polished generalities.
Verify before you commit
Speak to references
Ask for contact details of current clients of comparable size and product type, and ask what went wrong as well as what went well. Also try to speak with someone who left the provider, if you can find one.
Visit the facility
If possible, tour the site. Look at tidiness, labelling, how staff handle goods, how stock is stored and whether the operation seems calm or chaotic. A visit often reveals more than a presentation.
Read the contract carefully
Pay attention to term length, renewal and termination rights, liability limits, price-change clauses, service-level commitments and the remedies if they are missed. Have someone qualified to review the document before you sign.
Run a pilot
Where possible, begin with a limited trial, such as a subset of products or one region, and measure results against targets you set beforehand. A pilot exposes how the provider behaves when something goes wrong, which is the most useful thing to know before you commit all your volume.
Keep the decision reviewable
Score each candidate against weighted criteria that reflect your priorities, and record the reasoning. After you choose, schedule regular reviews and keep the evidence needed to renegotiate or switch. The goal is not to find a flawless provider, which is unlikely to exist, but to select one whose strengths match your needs and whose weaknesses you understand and can manage.