An Outsourcing Checklist
Criteria to consider when selecting a fulfillment and customer service center
October 2006 By Larry Moulton And Shari Altman
Whether you go through a formal RFP process or not, careful consideration of your requirements and the prospective fulfillment center’s capabilities to meet those requirements is necessary to making a decision that works for you and your customers in the long run. To end up with a fulfillment partner with which you are truly satisfied, please don’t short shrift this decision—spend the time necessary to make the right choice. If you don’t have the time or expertise internally to evaluate your options, consider hiring a consultant or other outsource selection professional to do this for you. The time to discover a fulfillment center cannot handle your business or is mismatched to what you do is before you sign a contract with the vendor—not after.
The following is a checklist to help you determine your needs during this evaluation process:
I. Document Business Requirements
Identify all your requirements. Include those that must be performed, as well as those that would make your life easier but may not be mandatory:
Types of distribution
• Single order
• Distribution to QVC, HSN or retail
• Continuity
• Catalog
Volume expectations for each program—customer orders, calls, e-mails, returns, inventory volume, etc. Is the size of the fulfillment center you are considering matched to the volume of your business? Does it serve other clients with similar size to your current business, and is it scalable for when your firm reaches the next level of growth? These are important considerations:
• Start-up/launch
• Rollout
• Wind down
Service needs
• Warehousing and inventory management
- Pre-pack versus regular stock
- Document any special needs such as lot tracking, climate control, etc.
- Consider proximity to ports if importing merchandise is a significant part of your plans
• Fulfillment and data management
- Order processing requirement
- Order fulfillment and shipping requirements; this includes existing or planned replenishment, continuity or club programs as well as electronic data interchange requirements for retail distribution
• Customer service and contact management requirements
- Phone and e-mail response needs
- Include a non-English language or other specialized skill needs
• Integration of offline functions with e-commerce site and online functions
• Integration with your internal IT department and other service vendors (media, call center, etc.)
Tax and Legal Requirements
• State sales tax implications, if any
• Impact on state income tax fulfillment location, if any
• Capabilities to comply with 30-day rule requirements
• Capabilities to comply with privacy requirements (telemarketing, e-mail and the Children’s Online Privacy Protection Act regulations, as applicable)
The following is a checklist to help you determine your needs during this evaluation process:
I. Document Business Requirements
Identify all your requirements. Include those that must be performed, as well as those that would make your life easier but may not be mandatory:
Types of distribution
• Single order
• Distribution to QVC, HSN or retail
• Continuity
• Catalog
Volume expectations for each program—customer orders, calls, e-mails, returns, inventory volume, etc. Is the size of the fulfillment center you are considering matched to the volume of your business? Does it serve other clients with similar size to your current business, and is it scalable for when your firm reaches the next level of growth? These are important considerations:
• Start-up/launch
• Rollout
• Wind down
Service needs
• Warehousing and inventory management
- Pre-pack versus regular stock
- Document any special needs such as lot tracking, climate control, etc.
- Consider proximity to ports if importing merchandise is a significant part of your plans
• Fulfillment and data management
- Order processing requirement
- Order fulfillment and shipping requirements; this includes existing or planned replenishment, continuity or club programs as well as electronic data interchange requirements for retail distribution
• Customer service and contact management requirements
- Phone and e-mail response needs
- Include a non-English language or other specialized skill needs
• Integration of offline functions with e-commerce site and online functions
• Integration with your internal IT department and other service vendors (media, call center, etc.)
Tax and Legal Requirements
• State sales tax implications, if any
• Impact on state income tax fulfillment location, if any
• Capabilities to comply with 30-day rule requirements
• Capabilities to comply with privacy requirements (telemarketing, e-mail and the Children’s Online Privacy Protection Act regulations, as applicable)




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