Choosing the Right 3PL With Adam McCoy From eHub - Ep. 04
In This Episode
On this episode of Unboxing Logistics, Adam McCoy and Lori Boyer sit down to talk 3PLs: what they are, when to start working with one (or more), and how to manage successful partnerships.
As it turns out, choosing the right 3PL is a little like dating. There are lots of options out there, and you don’t want to make the wrong choice. While Adam doesn’t give any dating advice during this episode, he does share plenty of tips for making sure your 3PL partnership doesn’t end in heartbreak.
Why work with a 3PL?
First things first—what exactly is a 3PL? Adam defines a 3PL as “a partner to the ecommerce business” that focuses on “getting the right product to the right customer on time.” 3PLs handle logistics activities like picking, packing, shipping, kitting, returns, and more.
So how do you know when to turn your order fulfillment over to a 3PL? According to Adam, there are two common signals that it’s time:
- Growth. As fulfillment becomes more time-consuming, ecommerce businesses must decide whether to outsource it to a 3PL or expand their in-house operations.
- Specialization. Many 3PLs specialize in certain types of shipments, including big and bulky products, hazardous materials, and cold storage for food.
Managing the 3PL relationship
Adam believes that the best time to start managing a 3PL relationship is before you sign a contract. “Ensure that you've set expectations. Your contracts are negotiated in a way where SLAs [service level agreements] are defined. And if you've done that properly, it makes other aspects of managing the relationship down the road easier.”
And while a breakup is never ideal, you shouldn’t stick with a 3PL that isn’t working out. “If you have a 3PL partner that's not meeting those needs and those SLAs … if you can't address that, that's probably a good indication that you should look for an alternative partner.”
Why technology is key
Technology helps bridge the gap between you and the 3PL. Adam explains how: “We're working with a customer [who is] using a technology where the merchant and the 3PL are effectively in the exact same instance of the technology. So they can [both] see who's ordering, who's fulfilling what, and it's almost like they're working side by side.”
The takeaway? You can maintain visibility and control even when the 3PL physically stores inventory and ships packages. “The ecommerce business isn't blind to what's happening with the 3PL … [the] technology that strengthens that partnership is key.”
Links
- Connect with Adam on LinkedIn: https://www.linkedin.com/in/aadammccoy/
- Visit eHub’s site: https://ehub.com/
Transcript
Lori Boyer 00:00
Welcome back to Unboxing Logistics. Big shout out to our logistics community. We really love you and are super glad you're here. I'm Lori Boyer and I am the host of this awesome, fun podcast from EasyPost. I'm really excited today because we're diving into a topic that I think is very prevalent in the industry, but that we don't always know so deeply about.
So we're gonna talk about 3PLs when we finish today. You should know all kinds of information from, you know, when do I need a 3PL? Maybe should I switch 3PLs? What kind of 3PL options are out there? When do I need a specialty 3PL? All of those kind of topics today. Anything you need to know.
And so for this topic, I invited Adam McCoy. He is the chief operating officer at eHub, and they are kind of 3PL experts to me, know everything about 3PL. So welcome, Adam.
Adam McCoy 01:01
Yes. Thank you Lori. Happy to be here. Excited to talk about 3PLs today.
Lori Boyer 01:05
Awesome. Can you tell us, tell our audience, our community a little bit more about you, your background and maybe a little bit about eHub?
Adam McCoy 01:13
Sure, yeah, a little bit about me. So I have been in product development most of my career. I came to eHub as the VP of product and then moved into the COO role. So I still am responsible for all of our product development initiatives at eHub and a lot of our products that are focused on assisting 3PLs and optimizing 3PLs and helping merchants find the right fit for 3PLs.
So we have a product that we really have 3PLs and merchants that we bring together and help them align so that we can ensure that the merchant has the right 3PL and really kind of find a win-win for merchants and 3PLs. It's, it's a great product that we have and, and it gives me a really good opportunity to learn a lot about 3PLs and, and what merchants need with 3PLs.
Lori Boyer 01:58
I love it. I've heard it described before as kind of like a dating service almost. For companies looking for a 3PL and that's absolutely why I wanted you on today, because you know about matching up companies with the right 3PLs, so that's...
Adam McCoy 02:12
Yeah, no, that's exactly right. Yeah. We joked around when we were thinking about the name there was a lot of people that wanted to key off some of the dating service names, so we, we joke about that quite a bit.
Lori Boyer 02:22
Oh, that's awesome. Okay, so with all of my guests, before we get started, I like to just kind of get to know you better. I think it's fun for those of us in the logistics community to get to know the experts a little bit more. So we're gonna do this or that.
Adam McCoy 02:35
Okay. I'm ready.
Lori Boyer 02:36
Quick fire round and I'll probably throw in a few little shipping this or that as well, but, okay, Adam. Pizza or pasta?
Adam McCoy 02:45
Pizza for sure.
Lori Boyer 02:46
Twins. Love it. Steak or chicken?
Adam McCoy 02:50
I'll, I'm gonna go steak.
Lori Boyer 02:51
Steak. Yeah. I love it. Would you do it yourself or do you like to get it out?
Adam McCoy 02:55
So, I'm not a great cook to be honest, so I'd probably go somewhere else. Yeah.
Lori Boyer 02:59
Perfect.
Adam McCoy 03:00
I mean, I do throw some things on the grill, but yeah, it's it's, it's a best effort kind of situation, so, you know, I have to deal with the gifts I have. And cooking's not one of 'em.
Lori Boyer 03:10
I'm with you there. Ice cream or cake?
Adam McCoy 03:13
Oh gosh. Both is both an option there?
Lori Boyer 03:16
I think we may have to go both.
Adam McCoy 03:17
Okay. Yeah, I'll go both.
Lori Boyer 03:19
Do you like to have 'em together?
Adam McCoy 03:20
Yeah, I do. You know, if you're going at a birthday party, you kind of want the ice cream and cake together.
Lori Boyer 03:24
Football or basketball?
Adam McCoy 03:26
Football.
Lori Boyer 03:26
I know he is a skier. But football over basketball.
Adam McCoy 03:28
Yeah. I'll probably go football over basketball.
Lori Boyer 03:30
Do you your favorite team?
Adam McCoy 03:31
I used to be a, a Denver Bronco fan growing up. Yeah. So, I mean, once they won the Super Bowl, I was kind of satiated, but yeah, Denver Broncos was probably...
Lori Boyer 03:38
You won the Super Bowl.
Adam McCoy 03:39
Yeah. I mean, yeah, exactly. We won the Super Bowl.
Lori Boyer 03:41
Awesome. Let's talk workouts. Would you go to the gym or do you know something outdoors or, or you know, organic?
Adam McCoy 03:48
Yeah, I mean, probably both. I love... you mentioned skiing, so I love to ski. So a ski day is number one. But you know, working out to ski is, is number two probably.
Lori Boyer 04:00
How many vertical miles do you get in a year? Do you track that in a season?
Adam McCoy 04:03
You know, that's a good question. So I do have an app that tracks it. Uhhuh I'll be honest with you, like a lot of times, like I forget to turn it on or things, so I actually don't know. It's a good question. I probably should do better at tracking.
Lori Boyer 04:14
Someday in retirement you'll have to set some major goals. Like, I want a hundred thousand.
Adam McCoy 04:18
I know. I'll find out sometimes I'll be like, oh, shoot, I didn't have it on, and you know, then I'll put it on at the end of the day or something.
Lori Boyer 04:24
Yeah, I'm disappointed. Okay. Are you a reader or a writer?
Adam McCoy 04:29
More of a reader. Yeah.
Lori Boyer 04:30
More of a reader, yep. Do you love actual books or eBooks?
Adam McCoy 04:34
Well, I used to really enjoy just kind of a hard copy and you know, kind of sitting down, but with limited time, you know, I try to, I try to throw in an ebook now is probably where I resort. But if I could get some time, I'd love to. Sit down.
Lori Boyer 04:49
That smell and feel kind of of the right book.
Adam McCoy 04:52
Yeah. I love just kind of, you know, sitting down on the couch too and just kind of laying down and reading. It's it's kind of relaxing. Yeah.
Lori Boyer 04:58
Was always my favorite thing growing up. After Christmas, I'd always get a book and be so excited to have it and read and eat all my Christmas treats.
Adam McCoy 05:05
Yeah, exactly.
Lori Boyer 05:06
I, I think I have a guess what vacation would you be an adventure vacationer or a relaxation vacationer?
Adam McCoy 05:11
Yeah, definitely adventurer. Like, I mean we, a lot of people that know me joke that they're like, hey, you know, you should do a, some vacation other than a ski trip. And my wife usually agrees with them.
She's like can we do something other than a ski trip? So we, we primarily do adventure stuff.
Lori Boyer 05:27
Oh, I love. You were just mentioning to me earlier that you're going on a heliskiing tour.
Adam McCoy 05:32
Yeah, yeah. Next year, March.
Lori Boyer 05:33
Tell me a little bit about that. Everybody knows what heliskiing is. I didn't even know.
Adam McCoy 05:36
Yeah. Taking a helicopter up to top of a mountain. So we've got three days where we're just, you know, going as many times as we can on the helicopter. Super excited. It's up, kind of in Canada, outside of Banff a little bit.
Lori Boyer 05:48
So cool.
Adam McCoy 05:49
Yeah, so super excited about that.
Lori Boyer 05:51
So cool. Would you say that you are a realist or an idealist?
Adam McCoy 05:56
Oh gosh. I would say idealist. I mean, yeah.
Lori Boyer 06:00
I think that's good for a product guy. Gotta dream a little.
Adam McCoy 06:03
Yeah, you gotta dream. Yeah. I mean, we, you know, you still have to be grounded in reality to make things, you know, idea to delivery. We really have to make things work, and from an operations perspective, we have to make sure it's sound.
But at the end of the day, like you wanna keep delivering greatness for our customers. And so you have to have that idealistic view.
Lori Boyer 06:21
I think so. Okay. I think that's perfect 'cause it's gonna bring me into some of my questions. I want to know some of your predictions. So in the future, do you think shipping is gonna be done more by rail?
Less by trucks or vice versa, or more air, sea. What's your predictions? These are looking into the Crystal Ball by Adam.
Adam McCoy 06:44
Sure. Yeah. You know, the drone delivery thing has always been fascinating to me a little bit, you know, and I understand all the complications, but like I, I think of, we see this trend consistently in multi-location fulfillment and really reducing that last mile delivery cost. And so drones have always kind of been appealing for me. So like, I don't know, I, if, if I were to guess into the future, I'd say more air, probably more drones, something like that.
Lori Boyer 07:11
I can just picture, it's like the Jetsons, like little drones like flying all over on their route. That'd be super cool. Awesome. Well, I'm glad we got to know you a little bit better, and we're gonna just dive right into our topic today.
Adam McCoy 07:22
Great.
Lori Boyer 07:22
Just for a brief overview, let's say that we've got somebody who's kind of new to the industry out there, maybe they're, you know, been selling, they've had, they've had a shop and starting to get big.
They haven't used a 3PL so just what is a 3PL? Yep. Kind of give us just the basic, most of you guys out there know, but for those who don't, what is a 3PL? How would you explain it to someone who doesn't know that concept?
Adam McCoy 07:46
Sure. So, I, you know, I like to think if of a 3PL is really kind of an extension, a partner to an ecommerce business.
And that partner's really a 3PL is focused on a lot of the logistic activities. And if I were to sum it up, I'd say the 3PL, when they're, you know, doing their job right, you're focused on getting the right product to the right customer on time. And so all of the activities that are all associated with, you know, making sure that you're getting the right product.
So the order fulfillment, the pick, pack, you know, getting it in the package, getting the right label and address and everything out the door. Having the carrier contracts so that they can ensure that that end customer gets the product on time.
Lori Boyer 08:28
Okay, so let's say that I had a jewelry store. And I've got tons of inventory.
But I've been doing it like maybe in my garage or something. Even bigger. Right? What, how does that work? Do I take the inventory to you? Not you, because you don't do a 3PL. But you know, to the 3PL.
Adam McCoy 08:45
Yeah, absolutely. So when you think of the 3PL services and if, if you're responsible for fulfillment, getting the product to the end consumer, you have to have some function of inventory there.
And, and typically those services include inventory management or at least a kind of a participation with the merchant on ensuring that you have enough inventory. So typically, yes, there's, depending on the situation and how you've negotiated between the ecommerce business and the 3PL, there's going to be some form of inventory that is managed at the warehouse of the 3PL.
And how that comes in. Sometimes it can come in direct, sometimes it can come from a merchant, if that's where it's being created. And so it, it really depends on the product and how it's coming in.
Lori Boyer 09:28
But once it's created, it's then sent to a 3PLs warehouse. Where they then do all the picking, packing, kitting, everything that needs to be done.
Adam McCoy 09:36
Yep, exactly. Yep.
Lori Boyer 09:37
And then is sent out and and they just take a portion, a fee or something.
Adam McCoy 09:41
Yeah. So yeah, I mean, there's sometimes a term that, you know, there's a cost for every touch and that's sometimes what, you know, when we discuss things and the 3PL world, it's you know, when I pick an order, I pack an order, I ship an order. All of those different touchpoints result in a a, a fee.
Lori Boyer 09:59
A fee for each. And so can you choose then? How many touches you want when you sign up with 3PL?
Adam McCoy 10:06
Sure. Yeah, absolutely. So there's a lot of services that a 3PL can offer.
And so that's definitely part of kind of the, when you think of the ecommerce business, working with a 3PL, that partnership, they determine, hey, what are the services that we want? So for example you may have one way logistics where they're doing the pick and the pack and the ship, but they're not handling returns.
Returns may actually come back to the ecommerce business themselves. Or the 3PL could a, handle the returns. And so that could differentiate, you know, the services and therefore the price. Kitting. You brought up kitting. You know, that's a good example of something where you know, the, it's an option an option and additional fee. For kitting.
Lori Boyer 10:44
Okay. All right. So it kind of sounds like they can do sort of maybe get their toes wet a little bit.
Adam McCoy 10:48
Yeah, absolutely.
Lori Boyer 10:49
So how would somebody know, so let's say now we're gonna take it to the next step. Or maybe you have an example of a story or, or someone, you know, how, how does a company know that like, okay, maybe it's time to look for a 3PL. When should, when should they start? You know, when is a good signal that you should move from in-house to that 3PL kind of model?
Adam McCoy 11:07
Sure. Yeah. So I, I have a ton of good examples. So with, with my current role, I have the opportunity to meet with merchants and 3PLs all the time.
And so it's really one of the more enjoyable parts of my job because I love hearing stories about ecommerce businesses, how they start up, how they grow.
Lori Boyer 11:23
So fun. I think it's so inspirational. I want to be an ecommerce business some day. When I grow up.
Adam McCoy 11:29
Yeah, it's awesome. And so when I think about like. What are the signs or what are the kind of indicators that a ecommerce business, you know, should look for a 3PL? There's a lot and, and I'll share maybe a few and some examples. A, a very common one is growth. And so when you have an ecommerce business, let's say they're doing fulfillment, just for example, they're already doing fulfillment.
But they have grown and they've surpassed their capacity for their existing fulfillment. Functions within the business. I mean, that's a very common example that comes to us and they say, hey, we're growing. You know, we need some help on the fulfillment side. And so, you know, they have to evaluate, well, do we want to continue, you know, growing our existing fulfillment side of business?
Taking on more warehouse space. The cost of that staffing. Or do we want to. You know, look for a 3PL a partner in fulfillment. And so that's probably one of the more common examples that comes to us.
Specialization is another, so Gabb Wireless is a, a customer of ours. And Tommy Merrill, who's the director of logistics, I have the opportunity to meet with him on a pretty regular basis. And Tommy's just great. He's very you know, data-driven. Make sure his processes are very well kind of thought out and that they're well executed. And so I really enjoy meeting with Tommy and, you know, learning about what he's doing from kind of a efficiency perspective.
And so I was meeting with Tommy. I was trying to work on this project about building a cost calculator that would help merchants understand, you know, the cost of 3PL services. And I know that. Gabb was using a 3PL and I was like, man, if anybody's dialed on assessing the cost of using a 3PL, Tommy's gone through it.
So I reached out to Tommy. I was like, Hey Tommy, you guys are using a 3PL. Tell me a little bit about kind of what you went through in evaluating the cost of using a 3PL. And as we were kind of having that conversation, he said, you know, the driving force was the specialization on the 3PL in fulfilling a, you know, serialization of their product.
And so, you know, they have kind of what I'd consider like, you know, safe digital devices for kids like watches and smartphones. So one of their products required serialization. And they said, Hey, ultimately that was something that the 3PL was you know, specialized in. And so they said it makes sense for us to use this 3PL for that specialization.
Lori Boyer 13:58
It was more complex. So what other specializations do we see?
Adam McCoy 14:01
Yeah, I mean, a, a really common one is like big and bulky. So you may have a product portfolio where you have some products that are smaller and then others that are big, and so they can be able ...
Lori Boyer 14:12
Like a mattress versus a pillow or even a little blanket or something.
Adam McCoy 14:15
Yeah, big grill. Something, you know, Christmas tree, and so it's like, on that fulfillment, there's a lot of functions that are geared towards big and bulky and carrier contracts that can specialize on the big and bulky, and so that's an a common specialization. Hazardous materials.
Lori Boyer 14:31
Hazardous materials. Lots of regulations around it. Specialized packaging.
Adam McCoy 14:34
Right, exactly. And so understanding, you know, that function of how do you handle and ship and deliver hazardous product really is a specialization.
Lori Boyer 14:43
Would you put like food and beverage into that category?
Adam McCoy 14:46
Yeah. I mean, so cold storage, cold you know, foods are a very common specialization that we see. And sometimes it may not be just a defined specialization per se. Sometimes it's an experience like where, you know, we'll work with a group and they'll say, hey, example medical devices. We, we placed a merchant with a 3PL, they've been doing medical device fulfillment for over 30 years.
So you know, they do other fulfillment, but that's something that they have a lot of experience in. So you'll see that pretty common where you know, someone has done something, you know, even if it's not a specific specialty, like big and bulky or hazardous material, but they've handled a particular product type for a long time period.
Lori Boyer 15:29
Okay. So if they have a specialty, do you recommend, I mean, are there, like, for instance, 3PLs, should they be looking for something that specializes in that area, you know, are there just big and bulky specialized 3PLs versus you know, you said medical devices, but any pharmaceutical, for instance, pharmaceutical based, 3PLs.
Adam McCoy 15:48
Sure, yeah, absolutely. I mean, you know, it depends on the product portfolio and what they need assistance with. So, I mean, it's a pretty big it, it's a pretty big task kind of going through and assessing, you know, what's the right 3PL? Yeah. And specialty. How much of my product do I wanna move over there?
We see a lot of hybrid fulfillment models, and so it's ...
Lori Boyer 16:07
Oh, okay. Wait, wait, wait. So hybrid fulfillment. So what does that mean?
Adam McCoy 16:10
Yeah, so hybrid fulfillment is really kind of a fulfillment model where you can be doing some of the fulfillment, the ecommerce business, doing it on their own and utilizing one or more 3PLs.
There's a lot of reasons for doing that.
Lori Boyer 16:23
One or more 3PLs. So you can sign up with multiple 3PLs.
Adam McCoy 16:27
Yeah, exactly.
Lori Boyer 16:27
So you may be sending like, okay, I've got this pharmaceutical piece that I really want somebody else to ship and I don't wanna mess with the medication. I've also got big and bulky, so I'm gonna maybe send them somewhere else, but then myself, I, I can do these inhouse.
Adam McCoy 16:42
Yeah, exactly. And there's a lot of reasons. I mean, a common one is like multi-location fulfillment. And so, you know, as you're working to improve your delivery time, right? We wanna make sure our ...
Lori Boyer 16:52
Huge in the industry. Huge.
Adam McCoy 16:54
Yeah. Customers want their product and they want it as soon as they can get it.
And so a really good strategy around that is multi-location fulfillment. So let's just say for example, you had a West Coast facility. And so you're headquartered West Coast, your fulfillment centers, you know, connected to your operations part of your business, and so you're handling west coast fulfillment.
You would seek then potentially a partner on the east or northeast or southeast, somewhere in the Midwest, perhaps depending on how much you wanted to really try to use a multi-location fulfillment model.
Lori Boyer 17:29
So the, so what I'm understanding is the hybrid locate, the hybrid usage is most often you're gonna be shipping all of your stuff from, you know, most of your, your goods are gonna be shipped.
You know, maybe you do your own, but then another location does all of that and then, you know, you want something up in the Midwest or something, but it's not as often where you're splitting up your inventory.
Adam McCoy 17:54
Yeah. I mean, it, it, it depends. I mean, so I mean, we mentioned Gabb, right?
Gabb, it, that's a hybrid model. They're doing fulfillment. But one of their products that's specializing in serialization or that needs a serialization, they're using a a 3PL for that, so, that would be ...
Lori Boyer 18:09
So that is an inventory.
Adam McCoy 18:10
Yep, exactly. And so they're definitely kind of splitting, hey, some of this specific product. Big and bulky is another one where, I mean, that's more, you know, product specific and so you're taking some of your product portfolio. And you're saying you're doing that and, and in that model you may not even be doing multi-location with your big and bulky, you may have one 3PL that's focused on just big and bulky. And then perhaps another 3PL that's helping you on small parcel with multi-location fulfillment.
Lori Boyer 18:38
It's way more flexible than I realized.
Adam McCoy 18:39
Yeah, it, it, it really is. And I think, you know, the 3PLs have continued to really innovate. Not just from kind of warehousing and positioning and figuring out where to be located to support multi-location. Yeah. And reducing that last mile cost, but the technology has, you know, significantly enhanced to support that as well.
Lori Boyer 19:00
Okay. That's awesome. So let's say somebody already has a 3PL, they've been working with a 3PL. Maybe what are some signals that they should either get another one or that they should switch? Like I don't know. I all you 3PLs I love you too, but you know, there may be times that it's just not a perfect fit.
So how do they know that maybe it's time to make a swap?
Adam McCoy 19:19
Yeah, and I mean, that's a scenario that we see quite a bit. And I think I mentioned before you think of a partner. That 3PL is a partner. And so the ecommerce business, you know, they're looking at metrics that they say, hey these are the metrics that matter to us because we want great customer satisfaction.
And so if you have a 3PL partner that's not meeting those needs and those SLAs, so let's say for example, you had a two to three day delivery timeline and, and that was what you were kind of guaranteeing to your customers, and that's not happening with your 3PL. You know, if you can't address that, that's probably a good indication that you should, you know, look for an alternative partner.
Lori Boyer 19:57
Do you have a benchmark of, you know, it, should it be 99% of the time they're meeting their SLAs? Is it, you know, what's kind of the average?
Adam McCoy 20:06
Yeah. And that's a really good question. And there's a lot of metrics, right? So there's on-time delivery. There's order accuracy. Did we get the right order to the right person?
There's leakage, you know, if you have you know, inventory leakage, that could be an issue. So I don't know if there's any one particular number that you're looking at with one metric. I think you really need to evaluate it kind of comprehensively, hey, are we meeting the metrics that matter to us as an ecommerce business?
And so, you know, it could be just one metric. It could be like, hey, our on-time delivery is just not happening. And that's enough. Like, yeah, order accuracy's great leakage numbers are great. But on time delivery is not and we have to fix that. So it could be one metric that is, is really the driving force.
So I, I look at that partnership and say, hey, if the partnership is not working as the ecommerce business needs them to there's a lot of great 3PLs, you know there's a right fit 3PL there for you.
Lori Boyer 21:02
Okay. Awesome. So it kind of makes me think about managing the 3PL relationship as well.
Would you say, let's say you are having some challenges. Do you work with them? What, how do you manage, I guess that whole, there's a relationship aspect is huge. So any tips I guess, on managing that 3PL relationship?
Adam McCoy 21:22
Yeah, I mean, my first tip would be, When you, before you start really and, and making sure that you've set expectations, contracting. So I think the best place for that to start is before you start. Right. Ensuring that you've set expectations. Your contracts are, you know, negotiated in a way where SLAs are defined and if you've done that properly, it makes these other aspects of managing the relationship down the road easier.
And so I, I would say as much as you can prepare in advance and making sure that you've done that through the contracting process, it will make some of it easier. And then again, I mean, it's, it's business. And so, you know, we're working with partners in business and you know, there's always that personal relationship part, and you know, having quarterly business reviews or some kind of regular ...
Lori Boyer 22:13
That's what I was, I was gonna ask you, when do you, how often do you recommend that they're reviewing it, quarterly?
Adam McCoy 22:17
You know, that's a pretty common pretty common frequency.
I would say a minimum. It should be probably, you know, quarterly. Okay. I mean, there's ...
Lori Boyer 22:25
Minimum quarterly everybody.
Adam McCoy 22:26
I would say, yeah, I would, you know, keeping in touch and keeping good communications and making sure that things are, you know, even if it's just a small communication touchpoint is important with a 3PL. And so I, I would also say, you know, the industry for ecommerce, you see peaks around Q4. And you have Black Friday all the way through Christmas. And so ensuring that you've had meetings preparing for that.
Lori Boyer 22:50
Starting when?
Adam McCoy 22:51
You know, I, I would say, you know I would say we see a lot of people kind of starting in that Q3 timeframe, like making sure that ...
Lori Boyer 22:59
Right now you guys!
Adam McCoy 22:59
Right now, kind of making sure that, hey, we're prepared for Q4, the peak. And things are kind of ready to go.
Lori Boyer 23:07
So do you ask them what, like what are your contingency plans if there's, you know, last year we saw major storms or are those the kind of questions they should be asking?
Adam McCoy 23:15
Yeah, I mean, absolutely. I mean, if you've been working with them for a while, right? You can do a retrospective on, you know, things that happen last year that maybe you want to correct. . And, and then you could also just say, Hey, we're coming into Q4 again, here's our expectations. Kind of realigning on those expectations and saying, Hey, here's our expectations.
You know, are we set to prepare to meet those expectations? What can we do to, you know, ensure that we're being a good partner as well? To, to help you as a 3PL meet these timelines. You could also look at metrics like for example, cycle time. If you've noticed any trends where it's like, hey, we're getting a little bit slower on cycle time.
Is there reasons for that? Because as we go into Q4 and we have, you know, this increase demand, right? You know, if we're not meeting cycle times now in Q3, maybe that's a warning sign going into Q4.
Lori Boyer 24:06
But is it too late, in your opinion, Adam, to switch?
So let's say at what point before peak season, if you're thinking, whew, you know, my cycle times are looking bad. I've been having some hiccups. People aren't, they're not meeting their SLAs. How long is the process, I guess, of switching switching 3PLs? What, what does that whole transition even look like?
Adam McCoy 24:25
Sure. And, and the short answer is, it depends. Right. And I know that's not the answer that people want.
Lori Boyer 24:31
It's a political answer I get from everybody, right?
Adam McCoy 24:32
Yeah, exactly. But I mean, how big is your current footprint in a 3PL. Like, you know, how much are they fulfilling? What's the complexity like if we're dealing with you know, specialization?
You know, that could be a little bit harder. And so it depends. I would say, you know, a lot of times, it can be months to, you know, realign with the new 3PL and that's once you've actually made the decision, getting the inventory over, everything over and getting all of those processes set up, it can be months.
And so it, it just depends on the complexity. I'd say the ecommerce business probably has a pretty good idea if they've already worked with the 3PL. What it took with their products to get going. And so yeah, I would, I would give yourself time.
Lori Boyer 25:16
Okay. So it sounds like if it were me anyway, I would probably look at it after peak if I'd had concerns. But right now really dive into that communication. Get, make sure that you're figuring out any challenges you're having right now to try to avoid those during peak.
Adam McCoy 25:30
Yeah, exactly. And I when, when my reference to kind of Q3 and having these meetings, it's just ensuring that, hey, we're preparing for peak.
That would probably not be like, hey, I'm looking for a new 3PL. It's just kind of refining and improving my existing partnership to you know, perform and make sure we're ready to perform in Q4. I would say in the scenario where you just finished a peak season, like last year and you were really unsatisfied.
Q3 isn't the time to switch. You probably should have done that earlier already.
Lori Boyer 26:00
What if you've never had a 3PL? Are you okay to jump in still right now?
Adam McCoy 26:04
Sure. Absolutely. Yeah. Yeah. And, and you know, as you work through with a 3PL, you know, they're gonna give you a good sense of kind of, you know, their processes and their timelines and kind of getting you set up.
Okay. So yeah, it's still not too late for someone to get into a 3PL.
Lori Boyer 26:18
And I would think, especially if they are starting to see orders getting a little difficult for them to handle right now, peak season could be a disaster if they don't go to 3PL right now.
Adam McCoy 26:27
And they could be launching new products gearing up for Q4.
There could be functions where. You know, maybe they're looking at their existing staffing model and saying, Hey, you know what, last, last Q4 was pretty tight. Maybe we wanna put a little slack into the system. It could be, you know, you mentioned earlier about storms. I was, I was meeting with a merchant recently and I, again, it's just so fascinating to see the drivers for merchants moving to 3PLs and this merchant was particularly focused on like risk and they were saying, Hey, I need to ensure that I've got a multi-location model to help me reduce my risk.
And so it could be the fact that you're not even saying, well, I can't handle my current volume. It could be that like, hey, I want to, you know, prepare for a risk. Where if this part of the country is shut down from ice storms or whatever it is, that my product can still get to my end consumers.
At least as best as possible. And so, again, I think, you know, that's all part of strategically and determining and evaluating when a 3PL is right. And, and so, you know, it could be like you're sitting here now saying, well, we can do our current fulfillment, but we wanna plan for risk mitigation.
Lori Boyer 27:36
Yeah, that totally makes sense. Does technology play a role here in 3PLs? I know there's a lot going on in the in the facilities. I just say a minute ago you mentioned like, you know, it's so interesting to watch when they jump on and just since I've joined the shipping industry, I've been shocked at how super fascinating everything is, and technology is a piece of that, you know, how does technology play a role?
Adam McCoy 28:00
Sure, absolutely. I mean, we're a technology company so technology is a huge part of this industry, but it really is fundamentally, I mean and we're seeing a, a dramatic innovation in the industry.
We talked about hybrid fulfillment a little bit. This to me is really kind of fascinating in terms of seeing technology that really facilitates the partner relationship with the merchant or the ecommerce business and the 3PL. And so for example you know, we're working with a customer where they're using a technology where the merchant and the 3PL are effectively in the exact same instance, of the technology. So they can see who's ordering, who's fulfilling what, and it's almost like they're working side by side.
They're in two completely different facilities. The, the ecommerce business is doing their fulfillment. They have part of that with a 3PL, but from a technology perspective, they have a holistic view of what's happening, and it's almost as if, from a technology perspective, they're working side by side. Yeah. And so that's just a, a, a really cool story. I love about how technology is facilitating that partnership.
So the, the ecommerce business isn't blind to what's happening with the 3PL. They can say, oh, I mean real time data. This package was just picked, packed, and shipped by our partner. And so I think looking for technology that strengthens that partnership, is key.
Lori Boyer 29:31
So I love that, that with technology, you know, all the ecommerce companies then get access to the technology that the 3PL is using as well.
And that's just, you know, another piece of that partnership. That's so cool.
Adam McCoy 29:43
Yeah, absolutely. And I would recommend for any ecommerce business that is really looking for 3PL services, they should evaluate the technology with respect to the partnership. How is the technology strengthening the partnership?
How is it improving communication? How is it improving transparency and visibility into what each part of the partnership is providing. And I think that's just a critical part of evaluating a 3PL, which is understanding not just the technology stack that may be part of the fulfillment but understanding the technology stack that strengthens the partnership.
Lori Boyer 30:19
Okay, that makes a lot of sense. Would that also include the element of like integration with their current systems?
Adam McCoy 30:24
It absolutely would. Yeah. I mean, and, and so part of that assessment could be, hey, you know, these are some of the ecommerce platforms and stores that we use.
You know, do you have integrations with them? What integrations do you have? How long does it take to get those integrations set up? All of that can be part of things the technology stack that effectively enhances the partnership.
Lori Boyer 30:46
Yeah. That makes sense. So since we're talking about the partnership and kind of that relationship, you know, what are best practices for maybe negotiating contracts or just getting the most out of that relationship.
Adam McCoy 31:00
Sure. Yeah. I mean, I would, I think there's an element of utilizing resources that are available to you. So other ecommerce businesses that are working with 3PLs, you know, work within your network to understand and get it, I would say get a better sense of what are some pitfalls and what are some challenges that our other ecommerce businesses are facing with 3PLs.
And then it's, it's really setting expectations in that contract negotiation process really, you know, indicating to the 3PL, hey, Here's our expectation. Here's what we're looking for, working in that contract negotiation process to get SLAs around those key metrics that that matter to you.
Lori Boyer 31:42
So how long would you know, best practices or, or industry standards or something, how long might a contract be?
Three months, six months, a year, five years?
Adam McCoy 31:50
Sure. Absolutely. I, I mean ultimately it kind of depends. Right? And there's a lot of aspects to, you know, if you are putting yourself in a longer contract, something that maybe guarantees more business to the 3PL, they may be able to and may be willing to provide additional discounts.
At the same time too, you know, if you're going into this brand new, you may not want a very long contract that doesn't, you know ...
Lori Boyer 32:14
87 years and my grandmother's pearls.
Adam McCoy 32:17
Exactly. Yeah. So you may want to be able to provide, you know, appropriate out if SLAs aren't being met. So you may be comfortable with a longer contract duration, so long as that you have appropriate provisions around if these SLAs aren't met.
Here's how we're going to address the, the non-performance on these SLAs.
Lori Boyer 32:37
So you mentioned going to your network to kind of find out what other people are doing. Is that similar with like kind of, so with eHub, my understanding is that, as we said, you're kind of like a dating service. So you'll connect the, they could give you all these parameters.
Okay, this is my assumption. Tell me if I'm wrong. They come in and say, I want a 3PL with brown hair and, and, and green eyes, and who likes long walks on the beach? You know all their things they want. And then you would find like potential partners. But would you, do you guys help with that negotiation or in telling them like, hey, most people when they work with this person would do a one year contract, like, is that something of what you guys provide as well?
Adam McCoy 33:18
Yeah, really good question. A little context there. Every 3PL that's in our network has been vetted, so we're ensuring we look at it as a representation of us and our services at eHub. And so we are going to work to ensure that the 3PLs that are in our network are the highest caliber. So in the dating example, you know, we're only bringing high caliber dates to the table here.
Lori Boyer 33:40
No, no felons, no sketchy people.
Adam McCoy 33:42
Yeah. So we're, we're bringing high caliber 3PLs to the table. And then to your point, when we sit down, we sit down with the ecommerce business, we get an understanding of, you know, their criteria that they're looking for. Do they need specialties? What's their volume?
You know, different attributes about them that they're looking for. What are the things that they value? Multi-location, et cetera. We learn about the ecommerce business. We have matching software. When we take those data attributes. And then we match that up to 3PLs that are in our network, that are going to be a best fit. And then we can propose that to to the ecommerce business.
Lori Boyer 34:21
It's a really cool service. Really cool service you guys for, if you're getting into the three P world or 3PL world I should say, or if you always have been I love that. Because there's just a lot of data and connection out there. So ...
Adam McCoy 34:35
And I, one of the things that I love about it is for an ecommerce business to really go through and try to understand all, you know, the details about a 3PL and you know, we constantly hear from our ecommerce businesses that how hard it is going through the process of finding the right 3PL.
Lori Boyer 34:53
And scary.
Adam McCoy 34:54
Yeah. I mean, you really are finding, it's when a customer doesn't get their product on time or they don't get the right product. They're not blaming the 3PL. They're not blaming the 3PL, you know, and it's, it's really a representation of your brand and so you wanna make sure that you are working with the right 3PL. And you know, one of the things that I love about that for us is that we make that process easier for the merchant. And we're really focused on, hey, we are going to find you the right 3PL.
Lori Boyer 35:25
That's really, really cool. Well, you know, we're getting towards the end. I. I'm gonna ask how people can reach out to you, 'cause I'm sure people will have questions for you or, or wanna know more about what you guys do at eHub.
But first do you have some takeaways? We've got our, our audience out there. What do you want them to remember from this session? Any hot tips of what they should be doing going into peak season. Can you share just a couple of final thoughts?
Adam McCoy 35:52
Sure. Yeah. So a, a couple thoughts that I think are takeaway.
One hybrid fulfillment models are great and they can really enhance what you're currently doing from your fulfillment. So if you're not engaged with a 3PL today, sit down strategically, work to understand how a 3PL can strengthen your fulfillment processes, whether that's through risk mitigation, lowering cost from a multi-location delivery model.
Whatever that right answer is for you. I would say strongly consider a 3PL and how they can strengthen your fulfillment processes. And ultimately deliver a better customer experience for your customers. And I think the last thing that I would say out there is you know, if you're not a part of a network that is learning about 3PLs and optimizing fulfillment, you know, join some form of a network and, and even if that's not the eHub network.
And, you know, participate in a network where you can continually learn about what is happening in this space because it is continually innovating. And it's getting consistently better. And it's an exciting industry.
Lori Boyer 36:59
So exciting. I just recently, hopefully you guys watched a session on AI and tech, and there is so much going on that you really do need to be connected with other people. Final question that it, your, your tip spurred for me. You mentioned you when we were working with Gabb Wireless of looking at like a cost calculator or something. Did you guys come. Is that a tool or something that you offer?
So if somebody is looking at a hybrid model or something, are there some cost calculators or are there some out there they can use?
Adam McCoy 37:26
Yeah, yeah, there's definitely some out there. We we'll be releasing one soon. We've been kind of dialing one, so yeah. We can help you on that even without the, the formal release of the cost calculator.
But yeah, there's, there's partners out there that we can utilize too to help you dial in the cost. So we definitely have ways that we can help you get a good understanding of the cost.
Lori Boyer 37:46
Okay. Very cool. All right, so. Somebody wants to get ahold of you, can they connect with you on LinkedIn? Should they go, you know, email you? What, what can they do to, to contact you after?
Adam McCoy 37:57
Sure. Absolutely. So yeah, I, I'd love to join people on LinkedIn. We also, you know, coming to our website, we have a lot of great resource and material there.
Lori Boyer 38:05
Perfect. We can include a link in the description. So look down.
Adam McCoy 38:08
And, you know, whether merchant or 3PL, we offer a way for you to kind of go through the process and join and, and work to participate in our network.
So, you know, I'd say come check us out on our website and, you know, join me on LinkedIn or you know, any ways that you can contact our support or resource team. We're happy to help.
Lori Boyer 38:27
Fantastic. Gotta have you back after you do your heliskiing. Can't wait to hear about it. And thanks so much for being here.
Adam McCoy 38:35
Thank you. Appreciate it.
Lori Boyer 38:36
We'll see you guys. See you next time.