Choosing a fulfillment company is going to be one of the most important decisions you make regarding your company. Choose the wrong company, and it can spell disaster for your bottom line. There are many factors that need to be considered, when evaluating these companies.
- Where are they located? Are they centrally located to your customers? This can translate to savings in shipping and transportation.
- How long have they been in business? You want a company with experience. You also need to be able to check out references.
- Do they require a long commitment? If you cancel are there large fees?
If the relationship does not fit, you need to be able to make adjustments.
- How do they handle mistakes and returns? How they handle your customer sis very important. If they don’t have good policies to deal with you, can you expect them to handle your customer adequately? These are your customers. Your reputation is at stake.
- How is their facility for handling? Can they protect your products? What kind of space do they have? If you have special needs, can they meet those needs now and in the future? Will they have room to accommodate growth?
- And how about their technology? Are they willing to spend money to have the best systems available? This can protect you against errors and cut cost because of better efficiency.
- Do they have enough staff to properly run their service? If they have put together a great workforce, this will help improve your bottom line, satisfy your customers with timely deliveries, and help cut down on errors.
- What is their cost compared to other fulfillment companies? Cheaper isn’t always better, but getting the most for your money is always a good idea.
These are some very basic, but needed questions to answer when choosing a Fulfillment Company. I would like to challenge you to consider another option when making your decision. Take a look at the impact of Sales Taxes.
Sales Tax is charged on the sale of any product or service, according to the rate the state has set, upon the products selling price. Throughout the United States, sales tax rates vary. Some states charge high rates, some charge low rates, but may vary at the city ad county levels with additional rates added to the state rate. There are however, five states that do not charge sales tax:
- New Hampshire
Choosing a fulfillment company in one of these areas can benefit your bottom line. Keeping up with the different Sales Tax rates can present a myriad of problems. Having the fulfillment company located in one of the five states that do not have a Sales Tax can eliminate collecting tax on all but those within your own state. Those living in the same state as your physical address will still have to pay the rate imposed by your state. Less time spent with bookkeeping, can save employee cost, time, and money. And we are all about trying to find ways to save money in our overhead.
But don’t stop here – you need to be careful in performing this analysis. Do your homework. Just because the state doesn’t charge a sales tax doesn’t mean it will be the lowest cost alternative. States charge a number of different types of taxes and fees outside of sales tax, and these may be passed on to you through your fulfillment company. Also, if the state isn’t strategically located for minimizing shipping, you may only be hurting your company by incurring larger shipping fees overall – more than offsetting any sales tax savings earned.
You must always make your decisions on which Fulfillment Company best fits your needs based on asking a few questions, weighing the values each bring to the table, and on good sound business practices. Remember, it’s important to choose a company that will make a good partner, in protecting and growing your business.