Prioritize scalable pick‑and‑pack throughput, returns processing, kitting, bonded storage if needed, and demonstrated accuracy SLAs. Ensure the provider supports real‑time inventory visibility, established carrier integrations, certified security and compliance, and flexible labor capacity for peak periods.

Location affects trunk‑route access to regional hubs, proximity to ports or inland depots, and the density of local carrier networks. Closer access reduces fuel and linehaul costs, shortens lead times, and increases options for consolidating shipments to lower total delivered cost.

Negotiate transparent rate cards, volume breakpoints, minimums, and surge pricing caps. Define KPIs: order accuracy, on‑time fulfillment, dock-to-stock time, inventory accuracy, and chargeback thresholds. Include audit rights, SLA remedies, and regular performance reviews to manage cost and service.

Confirm support for a modern WMS, API/EDI connectivity, E‑commerce platform integrations, and real‑time inventory feeds. Evaluate reporting dashboards, exception workflows, test environments for integration, and the provider’s ability to support automated order routing and carrier tendering.

Primary cost drivers include storage per pallet/cubic meter, pick‑and‑pack labor, inbound receiving, value‑added services (kitting/labeling), and transportation. Mitigate costs by optimizing SKU velocity and slotting, consolidating inbound shipments, negotiating volume discounts, and leveraging shared services or regional multi‑client space.