Opportunity
Panacea Skincare is simplifying the Korean skincare regimen and bringing it to the United States. They needed a third-party logistics (3PL) partner to provide order fulfillment services. Panacea independently conducted a 3PL search, but was unsure if the pricing and capabilities of their final choice were sufficient. We reviewed their potential partner and determined we could locate a more ideal fulfillment partner for them.
Challenge
For a new product company, identifying and launching with their ideal fulfillment partner is critical to their success. Understanding the 3PL landscape of partners, capabilities and pricing structures can prove difficult and time-consuming. Adding to that, Panacea's skincare products had two mandatory requirements, lot tracking and temperature control, which significantly narrowed the field of potential candidates.
Solution
After an in-depth review of the requirements for Panacea’s product line, we designed an RFP that would locate the ideal 3PL partner. Using a combination of site visits and our proprietary 3PL Scorecard we were able to narrow the field from 30 down to 3 prime candidates. Once bids were received, we analyzed the myriad of service fees using our custom Costing Calculator to arrive at an all-in cost-per-order based on Panacea's forecasted growth rate.
Results
Based on our exhaustive search and detailed contract negotiations, we were able to decrease Panacea's order processing costs by 54% and overall fulfillment costs by 35%. This has the potential to save $50,000 during their first year of operations.
About Us
We're former startup operators with deep experience in logistics, order fulfillment, warehousing, supply chain and inventory control. We’ve helped multiple high-growth product companies locate capable fulfillment partners, optimize warehouse efficiency, upgrade operations technologies and improve overall operating performance.