Online retailers may count the cost of buying logistics services on price

This article is brought to you by Retail Technology Review: Online retailers may count the cost of buying logistics services on price.

A recent survey of online retailers undertaken by DK Fulfilment Ltd (DKF) suggests that, when it comes to awarding a contract to a logistics partner to manage their order fulfilment processes, the overwhelming majority of UK-based internet retailers consider price to be the most significant influence on their decision.

Perhaps surprisingly, other potential levers such as the 3PL's track record and the satisfaction of its existing client base, where deemed of secondary importance to cost issues by the respondents.

"It seems that, as an industry, the third party logistics sector still has a lot of work to do if it is to persuade large sections of the online retail community that budgetary considerations should never be the overriding concern when vetting potential 3PL partners," says Mark Elward, managing director of DKF.

He continues: "It is important that online retailers understand that, as with most things in life, when it comes to logistics solutions providers, you get what you pay for.

"The growth in internet shopping has led many logistics companies to play up their 'fulfilment' credentials in an attempt grab their share of this lucrative market. But, in my experience, many of these companies do not really have the expertise or infrastructure to undertake the services they claim to offer and the reputation of their clients suffers as a result.

"Of course, price will always be an important consideration in any fulfilment contract discussion, any online retailer must consider all aspects of the potential fulfilment partner's service proposition."

With a number of shared user facilities across the UK and Germany, DK Fulfilment is a specialist provider of fulfilment, reverse logistics and bonded warehousing services to a broad range of global online businesses.