The demands that customers are placing on their warehouses are increasing daily. Customer demands can range from something simple like a custom SKU (Stock-Keeping Unit) number, specialty packages, or bundles to sourcing and adding RFID (Radio Frequency Identification) tags for Amazon’s walk-out stores that register the sale as the customer walks out with the goods. These demands can bog down the process of any warehouse and turn the focus away from the core business.

This is where a 3PL (Third-Party Logistics) relationship can be utilized to augment or replace the customer’s warehouse. 3PL warehouses, by nature, must adapt daily to multiple customers’ needs, and value-added services are where they can shine. I am providing an overview of adding RFID tags to your goods and then identifying an outsourcing partner.

The good news for your company is that one of your SKUs has just been added to the Amazon retail outlets. All your team must do is apply an RFID tag to each item to secure the sale. A checklist for going live might look something like this.

1. Read and Sign the Amazon Requirement.
2. Select RFID Tags from the Amazon list of approved tags.
3. Select RFID Readers and Infrastructure: Select RFID readers that are compatible with the RFID tags and your warehouse environment. Install RFID antennas and other infrastructure, ensuring sufficient coverage and signal strength.
4. RFID Tag Encoding: Encode each RFID tag with a unique identifier (EPC - Electronic Product Code), which can include information about the item.
5. Tag Placement: Strategically attach RFID tags to your items. The location and attachment method can vary depending on the type of item and the reading requirements.
6. Testing: Evaluate your tags to ensure Amazon can read the data correctly.
7. Calibrate the system if necessary to optimize performance.
8. Train your staff on the process and placement.
9. Regularly inspect and maintain your RFID equipment.

This new revenue opportunity just became much more complex and expensive. There will need to be an investment in people, equipment, and new processes to provide this opportunity. It will also disrupt the normal flow of the warehouse.

An alternative solution would be to outsource this work to a 3PL warehouse. Amazon has approved over 195 providers for this type of work. Your current provider may be able to do this work or will be able to introduce you to someone who can. In selecting a 3PL to do this work, here is a simple checklist of tasks that should provide a framework to move forward.

1. Define Your Needs: Clearly define your requirements, such as the number of SKUs, the type of RFID tags to be used, and the scale of the operation, sharing sales forecasts and time limits.
2. Identify Potential Partners: Research and identify warehouses that can meet your specific needs.
3. Contact Potential Warehouses: Reach out to the selected warehouses and inquire about their services—request information about their capacity, location, security, and experience with RFID tagging.
4. Site Visits: Schedule site visits to the warehouses to assess their facilities and suitability for your RFID tagging operation. Pay attention to the workspace, available technology, and security measures.
5. Negotiate Terms and Service Agreement: Discuss terms and pricing with the warehouse operators. This may include storage fees, RFID tagging fees, and other relevant charges. Draft an SLA (Service-Level Agreement) that outlines service levels and responsibilities.
6. RFID Tag Procurement: Procure the necessary RFID tags for your SKUs. Coordinate with the warehouse to ensure they have the appropriate equipment for encoding and attaching the tags. Document the process and measure it with KPIs (Key Performance Indicators).
7. Ongoing Communication and Monitoring: Maintain open communication with the warehouse and monitor the RFID tagging process regularly to address any issues and ensure it runs smoothly.
8. Scale as Needed: If your business grows, work with the warehouse to scale the RFID tagging operation accordingly.
9. Compliance and Security: Ensure that all processes are compliant with data privacy and security regulations to protect sensitive information.

Effective partnership with a 3PL warehouse can keep your team focused on their core competencies and still allow for growth in vertical and horizontal sales channels without disruption.