What should I check before buying an e-commerce fulfilment business?

A fulfilment business stores goods for online sellers, packs their orders and ships them to shoppers. Its clients may be small merchants who can change providers with little notice, so ask how steady the revenue is. The checks below are about the things that keep clients and the things that could break after you take over. For the wider logistics picture, see the 3PL due diligence guide.

Who the clients are and how long they stay

Ask for a client list with start dates, and for those who left, with the reasons. Online merchants come and go, so a steady core matters more than a long list. Find out whether a few brands make up most of the work, and whether any have their own contract with a notice period. A high rate of leaving among new clients is a warning sign worth asking about.

Systems and integrations

Orders usually arrive through links between the merchant’s online store and the warehouse software, and labels come from shipping software. Ask who built and maintains those links, whose licence they run under and what happens if the seller leaves. A system that only one person understands is a risk. Ask to see an order go through, from the store to the doorstep.

Peak season, returns and carriers

Ask how the site coped with its last busy season, how it hired temporary workers and whether it can do so again. Look at how it handles returns, which take time and space. Ask for its order-accuracy and same-day ship records. Finally, find out whose name the carrier rate arrangements are in, because rates tied to the seller may not follow the business to you.