3PL RFPs: Best Practices for Supply Chain Success

Requests for proposals (RFPs) have become a necessity when searching for the right 3PL. However, RFPs are often seen as time-consuming, difficult-to-craft endeavors that don't prove to be worth their while in the end.

This is likely because of a poor RFP process in place. But RFPs shouldn't be looked down on because of the negative reputation they carry in the industry. In reality, they can be useful for your vendors and your organization if conducted correctly.  

For example, sending out an RFP is ideal for:

• Businesses that need to find a new partner because their current vendor isn't performing at the rate they should
• Businesses with a vendor that doesn't have the capabilities needed to grow with your business
• Businesses with an internal company policy that requires a new RFP once a contract ends

We can't quite avoid RFPs forever. But in order to make the most out of the experience, it's important to keep these best practices in mind. 

Research vendors before engaging

Your first step to creating an engaging RFP is research. While it may seem like a simple Google of 3PLs in your area will suffice, proper vendor research should be conducted more thoroughly than that. For example, there may be a significant amount of 3PL options available to you, but some may not be a good fit for your operation.

Every 3PL has specific pros and cons to their services; for example, one may feature services primarily for subscription boxes, while another may not have an FDA-approved warehouse storage facility. If your products hinge on one of these features, doing research ahead of time and seeing what these vendors have to offer can help you predetermine which ones will be worth your time. 

RFPs take time

Rome wasn't built in a day, and neither are great RFPs.

To create compelling proposals, you need to convey the values of your operation accurately through a solid RFP process. This means reaching out to multiple areas of your organization to gather accurate and updated data. This can often be time-consuming, and cutting corners to save time can seem like a good idea in the moment, but can lead to poor proposal results.

If you rush the data-gathering process, you can end up with inaccurate information on your proposal, which oftentimes leads to a bad representation of your business. The point of an RFP is to showcase an accurate representation of who you are. If you don't have the proper data to back up what exactly your organization needs and illustrate what working with your company will do for the seller, then you may waste time chasing down vendors that aren't right for you, or worse — signing a contract that won't yield good results. 

The best thing for you to do in these situations is to take the time you need to create a compelling proposal. Once it's completed, you can reuse the statistics you gather in any following RFPs you send out, making sure to update data when necessary.

Include the necessary data

While each vendor may request specific information depending on their services, we've found that the ideal RFP should include your organization's basic fulfillment requirements, such as:

• Shipping frequency
• Projected order volume
• Warehousing needs
• Retailer handling requirements
• Cutoff times for shipping
• Returns management expectations

Including these requirements will make it easy for vendors to find the data they need and prepare an accurate response.

Don't send out mass requests

When you need a solution to a problem, you need results fast. To get the most results, you need to send out as many requests as possible at once to get the most responses, right? Not necessarily. 

Consider this: comparing proposals to one another is a challenge. It takes a lot of time and re-reading of fine print to ensure that the vendors you requested have the right criteria that match what you're looking for. Doing this with five vendors at once can be a challenge. Doing this with five hundred? Nearly impossible.

Not only does sending out hundreds of RFPs overwhelm you with responses, but it also overwhelms your vendors. You may unintentionally discourage the best vendors from taking the time to tailor their response because they feel that they are one in a million. They may not even respond at all. This is such a common practice that most times, when 3PLs hear the term "RFP", they roll their eyes.

Instead, focus on quality over quantity. Do your research ahead of time and single out the vendors you feel would be the best for you, and send them proposals in batches. Once you have a response and determine whether or not they are a good fit, move on to the next batch. 

Add your terms and conditions upfront

If you're buying a car and the vehicle doesn't come with air conditioning, isn't that something you'd like to know before you make the purchase? Of course it is. In the same vein, you'd want to know if your future 3PL partner has any conditions that you need to know about beforehand. Similarly, you should inform them of any conditions of yours.

Whether it's a conflict of interest policies, safety standards, or delivery requirements, these terms and conditions must be outlined in the proposal ahead of time. Additionally, ask for their non-negotiable terms and conditions. It's best to understand supplier limitations as soon as possible so you don't end up wasting time chasing down a failed partnership before it's begun.

Find a Partner in Materialogic

The goal of an RFP is to find a partner that can support your business. With nearly 50 years of experience under our belts, Materialogic has seen an RFP or two. We understand the challenge of compiling all the necessary data, and have worked to make it as easy as possible for you.

If you need an RFP template to get you started, feel free to download ours here. Don't forget to submit one to us, too!

Please don't hesitate to contact our team with any questions you may have or if you need assistance completing the form. Our success is your success, and we look forward to helping you create long-lasting partnerships.