[.blue]Switching 3PLs:[.blue] What to ask a potential fulfilment provider & the key steps for a seamless transition
April 14, 2023
The decision to partner with a third-party logistics (3PL) company – let alone change fulfilment providers – is an important one for any eCommerce business.
It means handing over the reigns to a vital cog in the running of your business, something you are likely to be cautious of if you’ve already been burned by poor fulfilment. You may have realised that a 3PL can make or break your supply chain operations, directly impacting customer satisfaction, brand reputation, sales, and revenue. That’s why it’s vital to ask the right questions of a 3PL you’re looking to partner with to ensure they can meet your business needs and can seamlessly transition your brand over to their service.
We have previously covered the major signs that it’s time to outsource fulfilment or change 3PL providers. In this blog, we will discuss 5 questions that eCommerce businesses should be asking potential 3PLs, as well as some of the important steps to take as part of switching from one fulfilment provider to another.
5 questions to ask a potential 3PL
1. What makes you different from other 3PLs?
The very least that most 3PLs can do as part of their fulfilment service is pick, pack and ship orders on your behalf, so when it comes to finding the right fulfilment partner, you’ll want to consider what else a 3PL offers that sets them apart from the rest. Perhaps they have unique storage solutions or technology that could help you better manage your orders and inventory. Maybe they provide niche services such as custom kitting or gift basket building, where they collaborate with you to create the best unboxing experience for your customers.
Think about who they are as a company. Are they continuously investing in new technology? What initiatives do they have in place to reduce their environmental impact and potentially help the businesses they work with do the same? Do they donate to charity or participate in any fundraising events? Have they won any awards and if so, what for? It’s important to understand what makes each 3PL tick so you are better positioned to partner with a provider that ultimately aligns with your business goals, ethos and values.
2. What industries or businesses do you typically serve?
This question centres around experience and whether the 3PL has a proven track record of successfully supporting online businesses of a similar size and scope as yours. eCommerce is a fast-paced, fast-changing world, which means what could be trending one day flops the next, so you need to be confident that a potential 3PL can cope with the peaks and dips in demand – not to mention your customers’ expectations. Ask the 3PL what brands they currently work with and check out any case studies they signpost you to, paying close attention to feedback on communication, reliability, and customer support.
Understanding the industries that a 3PL serves is also important because it indicates whether they have the experience to handle different products with varying storage and shipping requirements. A 3PL that specialises in fulfilling orders for food and drinks, for example, may lack the expertise and facilities to support a brand looking for fashion fulfilment. Ultimately, you want peace-of-mind knowing your chosen 3PL can take care of your products at every stage of the fulfilment journey.
3. How will your technology work with ours?
The very nature of eCommerce means your business cannot exist nor succeed without technology, which lies at the heart of a reliable fulfilment solution. There are two elements to consider when comparing 3PLs in this area: how their software integrates with your online store – particularly if you sell on multiple platforms – and how it will help you better understand and improve your business. The right 3PL will live and breathe this technology, using it to support your business in managing orders, inventory, returns and everything in between, ensuring a constant flow of information between all relevant platforms.
If you’re ever in doubt over the capabilities of a provider’s software, don’t be afraid to request a demonstration – you’ll know very quickly whether their technology meets your needs. Many eCommerce businesses have onboarded with a 3PL, only to find that they can’t use the 3PL’s software because it’s antiquated, doesn’t quite do what it says on the tin, or comes with a steep learning curve.
4. What does the onboarding process involve?
Much like moving house, moving your fulfilment operation to a 3PL can be stressful without the right plan or support – perhaps even more so when you’re transitioning from a failing 3PL. That’s why it’s important to have a clear understanding of what it takes to make the switch, from the moment you agree to partner with your chosen provider, to what happens once your service is launched. Ask a potential 3PL how they will handle the transfer of your goods, who will be overseeing your onboarding, and how long the process will take so that all parties involved can plan accordingly.
Ideally, the onboarding process should be undertaken in a matter of days with minimal downtime or disruption, so your business and customers aren’t affected. There should also be a clear point of contact for any queries or concerns you might have, and to eliminate the risk of any wires being crossed. How a 3PL onboards your business dictates how quick and seamless the transition is, but also sets the bar for how your partnership will work post-service launch.
5. What is your customer service approach?
When you decide to work with a 3PL, you are entering into a partnership. That means they should be there to support you in both your triumphs and failures as a business. Your success should be their success. But when things do go wrong (because – let’s face it – nothing is perfect), you want your fulfilment provider to have your back. Therefore, make sure to ask your potential 3PL about their customer service approach, including their communication channels, response times, and resolution processes.
You should be looking for a provider that offers a dedicated account manager who will take the time to understand your business and what you need from a support perspective. Ultimately, you don’t want to be waiting several days or chasing your 3PL for a response, especially if it’s regarding delivery issues. As such, check with the fulfilment provider what their escalation process is for urgent matters and how they handle customer complaints. This could tell you a lot about how effective they are at resolving issues, or even providing solutions to problems you didn’t know you had!
3 steps to a seamless switch from your current 3PL to a new one
1. Evaluate your current operations & identify pain points
The first step to ensure a smooth transition to your new 3PL is to evaluate your current supply chain operations and identify any pain points. This will help you understand what is working well and what needs improvement. Look at your current processes and see if there are any areas where you are currently experiencing bottlenecks or inefficiencies, accounting for factors such as volume, inventory management, shipping times, and customer satisfaction. Once you have identified the pain points, you can work with your new 3PL to develop a plan for how to address them.
2. Develop a transition plan & communicate with stakeholders
When you have agreed on the ideal switch date with your new 3PL – ensuring it is the right time for your business to make the move in the first place – the next step is to plan the transition. This plan should outline the steps required to transition your fulfilment operations to the new provider, including timelines, resources, and responsibilities. It should also include a communication strategy for staff, suppliers, customers, and other key stakeholders who need to be informed of the transition progress and any potential impacts. Effective communication is critical at this stage to manage expectations.
3. Steadily phase out the incumbent fulfilment provider
The final step for a seamless switch is to start phasing out the incumbent fulfilment provider by transferring your inventory. In the early stages of the transition, it might be worthwhile having your old 3PL hold some of your inventory to minimise the risk of stockouts and back orders while you get set up with the new provider. It’s important to remember that although the relationship with your old 3PL may have soured, maintaining contact with them is essential during the transition period to ensure nothing gets missed and that the new fulfilment service is successfully launched.
Switch to a service backed by experience
Choosing a 3PL provider for your eCommerce fulfilment is no quick or easy decision, but the move can have an immediate positive impact on your business. The key to finding the right partner is to research your options carefully and ask the right questions of the 3PLs you shortlist. Doing this can save you from the cost, time and stress of partnering with a 3PL provider that isn’t right for your business. Having moved hundreds of brands over to their award-winning service, the team at Zendbox have fine-tuned the process to make it quick, easy and painless.
So if you’re looking to switch 3PLs, we’d love to connect! Simply fill out our form and a member of our friendly team will be in touch to discuss your unique business requirements and share more information.
Resilient and forward-thinking, Gilson is responsible for leading the strategy, planning and execution of our customer experience (CX) goals, liaising with department heads to ensure every team at Zendbox works cohesively to provide our clients a positive and seamless experience across all touchpoints.