There is a lot to think about when considering working with a fulfillment partner. It’s a big step, and outsourcing is not for every company. Below are some questions to ask yourself to help determine if outsourcing your fulfillment needs is the direction to go.

What Would Be My Goals for Outsourcing?

Outsourcing can serve many purposes, and understanding why you're considering it is one of the most important steps in making the decision to outsource or not. Brands often seek outsourcing solutions to reduce costs, which is one of the most common drivers. Others outsource because they want their inventory in one location with a single provider that can handle all sales channels. Some businesses simply don’t want to build a staff to run their own facility, and instead, want to save time and reduce risk by outsourcing.

Once you determine your primary goal for outsourcing, you need to do some detailed research because not all 3PLs are created equal. Some operate under a one-size-fits-all model, which doesn't work for every brand. For example, a growing brand may need support entering major retailers, while also managing website fulfillment and drop shipping capabilities. Each of these functions requires different levels of expertise and infrastructure.

After narrowing down some options, ask yourself if you want a partner who simply handles getting product from point A to point B, or one that is a true strategic partner — one that will collaborate with you regularly to solve problems and support your business growth.

Would Partnering with a Fulfillment Partner Help My Core Business to Support Growth/ Scalability?

Partnering with a fulfillment company can be a powerful way to support and strengthen your strategic initiatives. Rather than spending time and resources managing labor, facilities, or investing in additional equipment, a 3PL absorbs those operational costs by spreading them across their broader customer base. This allows you to leverage expert support without taking on the overhead yourself.

Beyond cost savings, outsourcing fulfillment frees up your time and capital — giving you the space to focus on what matters most: enhancing your product, growing your brand, and expanding your market reach.

The financial benefits and saving you time can be enormously impactful for your business, but only if you are truly committed to using that capital and added extra time to better focus on growth and scalability. For that to happen, you need a clear strategic plan that is supported by other executives and followed diligently. You should map out a five-year plan of goals and meet on a regular basis to review them. In addition, you should have business growth KPIs in place to measure success.

Is My Inventory Data Clean Enough?

Many companies underestimate the importance of having clean, accurate data — especially when preparing to outsource fulfillment. This includes detailed shipping information, clear SKU and quantity records, and accurate financials like P&Ls. Clean data allows a 3PL to provide you with a more accurate and transparent cost structure, helping you better understand your true costs going into the partnership.

This is especially critical for industries like pharmaceuticals, where compliance with FDA and ISO guidelines is non-negotiable. Accurate data ensures lot numbers and expiration dates are properly recorded, and that batches are never mixed within cartons — helping to maintain product integrity and avoid costly errors. Capturing this information correctly also supports traceability and quality control, which are vital in regulated industries.

Even if your data isn’t perfect, that’s okay. A strong 3PL partner will help clean and organize your information during onboarding. In some cases, your partner may advise that certain inventory can’t be transferred to a new facility if it can’t be properly tracked. That’s why it’s essential to begin capturing and maintaining this data now — so that every item, from batch to expiration date, is accounted for.

With this foundation in place, you’ll be better equipped to track true costs per order or per item, reduce risk, and build a more compliant and efficient fulfillment operation.

If you’re data isn’t clean, it’s best to fix it before outsourcing.

What Is My Cost Per Order?

Understanding your true cost per order is essential — regardless of your industry. Whether you're in pharmaceuticals, supplements, retail, pet, or health and beauty, you need to know exactly what it costs to create your product, sell it, and deliver it into your customers’ hands.

By getting that information to your 3PL partner, they can then provide you with detailed insights into the costs associated with every step of the process, from storage and picking to packing and shipping. This includes visibility into what it truly costs to get your product on a shelf at a big box retailer or delivered to a consumer's doorstep. With that level of transparency, you’re empowered to make more informed business decisions.

When you understand your fulfillment costs down to the item level, it opens the door to smarter marketing and pricing strategies. You can explore the impact of coupons, loyalty programs, or free shipping thresholds — like encouraging a “buy three, get free shipping” model — to increase average order value while still protecting your margins. Ultimately, knowing your cost per order helps you drive profitability, optimize promotions, and build a more sustainable business model.

Do I Have the Right Tech Requirements for Automation?

Something that’s super important in today’s world is automation. The goal is to remove as much human error as possible — and that starts with making sure all your systems are connected. That means your website (like Shopify, WooCommerce, or BigCommerce), your ERP system (like NetSuite, Acumatica, or even a custom setup), your accounting software (like QuickBooks or Xero) — all of that needs to be able to talk to the 3PL’s WMS (warehouse management system).

Whether you're working off a basic spreadsheet, a homegrown tool, or a fully integrated ERP, having that infrastructure in place is a game changer. It allows for things like automatic billing, real-time inventory updates, shipping status, and clean reporting — all of which help you stay on top of your operations without needing to manually chase down data.

If you don’t have that infrastructure and tech requirements in place, you may not be ready to outsource your fulfillment needs.

Determining if you want to outsource to a fulfillment partner or not takes time to figure out, and includes a healthy amount of research. It may be time for you to outsource. It may not be.By asking yourself the questions above, you’ll be in the best position to make the right call for your business.

Michelle Keske is president of Diamond Fulfillment Solutions, a scalable fulfillment partner for emerging and established brands in a variety of industries. Diamond’s customizable services, including order fulfillment, kitting and assembly, freight transportation, subscription box fulfillment, and print-on-demand services. Diamond has highest levels of excellence in warehousing standards, including ISO, HIPPA, Rx Licenses, and FDA compliances.

This article originally appeared in the July/August, 2025 issue of PARCEL.