Have you been thinking about changing your 3PL? You already know the benefits, costs and processes involved in outsourcing eCommerce fulfilment, but your current operation doesn’t feel quite right. Whether it’s a gut feeling, falling KPIs or negative customer feedback, your 3PL isn’t doing it for you – but does that mean you should switch?
Why change your third-party logistics provider?
We’re not going to lie, changing your third-party logistics provider isn’t ideal. You’ve spent time, budget and reputation implementing an outsourced fulfilment strategy, and it’s going to cost time, budget and reputation changing that strategy.
However, switching 3PL is crucial if they’re not providing you or your customers with best-in-class service. Why? Because a poor 3PL can:
- Negatively restrict your customer reach;
- Negatively affect your reputation; and
- Negatively impact your profits.
Terrible for sales, growth and, potentially, your career.
When to change 3PL?
If you have a bad feeling about your 3PL logistics provider, chances are your intuition is spot-on. In our experience, the following eight situations are warning signs that you should consider a new logistics partner.
You’re outgrowing them
The fulfilment provider that suited your needs at the beginning of your eCommerce journey may simply be unable to accommodate your store’s success.
If you’re being restricted on storage space, order volume, shipping speeds or geographical reach, or you need additional services such as returns or quality control, it’s time to choose between your 3PL or your store’s continued growth.
They’re not delivering the service your customers expect
Whether you have an SLA or you’re operating on eCommerce best practice, there’s a certain level of service you expect on behalf of your customers when it comes to product delivery.
Errors occur, but if your provider is regularly damaging stock, sending incorrect orders or missing delivery deadlines, and they’re not doing anything about it, they’re not up for your job.
They’re not keeping up with eCommerce trends
eCommerce moves fast. In the blink of an eye, we’ve gone from Amazon delivering orders in six days to under 15 minutes, and customer expectations are following.
If your 3PL has become complacent and isn’t updating its technology, resources or processes to keep up with the future trends of eCommerce, switch before you get left behind with them.
They’re not utilising technology
Speaking of technology, if your 3PL isn’t using the latest technology to improve you or your customer’s experience, then something’s amiss.
It’s essential to use a technologically advanced 3PL who uses tech to increase efficiency, accuracy and experience. Warehouse management systems, inventory software, integration with your eCommerce platform, sales channels and ERP system, and other emerging logistics technology all contribute to making your business bigger and better.
Their cut off times are cutting your delivery options
Fast shipping is getting faster. If you want to keep up, you must expand your delivery options to offer quick shipping late into the day. Early order cut-off times prevent you from doing so.
Early cut-off times are usually a result of inadequate technology and capacity, and they can significantly impact your ability to attract and retain customers who value fast shipping.
They’re not generating an ROI
Outsourcing your fulfilment costs money, but that doesn’t mean you shouldn’t see an ROI. Technology, storage space, warehouse management, customer support, economies of scale and fast shipping speeds should boost efficiencies and sales while cutting shipping costs and errors.
If your 3PL is costing more time and money than it’s delivering, you need to start the search for a 3PL that delivers value, not problems.
They can’t handle peak sales
Christmas, summer sales, Valentine’s Day, coronavirus – peaks in order volume can expectedly and unexpectedly occur throughout the year. Can your current 3PL cope?
It’s crucial that your 3PL can scale as and when you need them to. If they’re struggling to cope during the peaks, you will struggle to retain customers for the troughs.
They’re a provider, not a partner
A logistics service is handling one of the most critical aspects of the business – one that is the key to success, growth and profits. Therefore you need a partner, not a provider.
If you feel that your 3PL is restricting your business through a lack of ambition, an outdated outlook, an aversion to problem-solving or an overall uninterest in your business’ success – fulfilment is never going to be your competitive advantage. Let that sink in.
How to change 3PL
If one of those reasons struck a chord and you think you need to switch logistics providers, where do you start?
Changing 3PL doesn’t have to be painful. In fact, with a proper plan in place and an experienced fulfilment partner, you can change seamlessly. The key steps to follow are:
Review your current contract
Check your current 3PL contract to find out when you can leave and weight up any costs involved. For example, it may be more cost-effective to run your current inventory levels dry instead of paying excessive removal fees.
Research and connect with a new 3PL
It’s never too early to begin researching your new 3PL. Once you’ve found the ideal replacement, speak to them about their fulfilment switching process. This should cover tech integrations, inventory shipments, order routing and everything required to prevent stockouts.
Further reading: what to look for in a 3PL
Update your supply chain
Don’t forget to keep your entire supply chain in the loop with new addresses, contacts, transit times, and inbound processes.
Update your customers
With the best will in the world, there may be a couple of errors along the way. Make customers aware of your migration and be quick to apologise for and rectify any problems.
A third-party logistics provider should benefit your eCommerce business through increased efficiency, scalability and sales. If they’re not, and they’re not willing to do anything about it, it’s time to change your provider and find a logistics partner.
Synergy Retail Support is a trusted 3PL and fulfilment partner. We invest in your brand to deliver a personal service that elevates your business, helps you stand out from the competition and makes your role easier.
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One of the most important aspects of growing online retail successfully is finding a courier service that ensures a positive shipping experience (for all parties) and protects against negative feedback. Get it right, and you’re likely to enjoy repeat sales and build a positive reputation influencing, first-time buyers without you paying any cost per acquisition.