3PL Center’s Guide to Switching 3PL Providers

Switching 3PL providers is a big task for online businesses. Changing providers will most likely affect large parts of your supply chain management, so it is important to identify when change is needed and make the choice swiftly.

You should not let this fear hold you back from improving your business long term. We will highlight when it is time to switch providers, how to make your change seamless, and how 3PL Center can help.

What is a 3PL provider?

A 3PL provider is a company that offers outsourced logistics and supply chain management services to businesses. These providers specialize in various aspects of logistics, including transportation, warehousing, distribution, order fulfillment, inventory management, freight forwarding, and more. 

The main focus of a 3PL provider is to assist businesses in efficiently managing their supply chain operations, often enabling them to focus on their core competencies and leaving the complexities of logistics to the experts.

3PL Center offers all the services of the average provider. However, we actively look for ways to improve the efficiency of your supply chain, which many outdated providers lack.

Switching 3PL providers: how will I know when it is time?

Whilst growing businesses should definitely look to outsource to a 3PL provider, you may need to change if your current one is falling behind. Here are five clear signs that it may be time to switch 3PL provider:

1. They are constantly making mistakes

Mistakes happen and you would be hard pressed to find a company that is completely mistake-free. However, there is a difference between making a mistake once and remedying it, and consistently making the same mistakes over and over.

For example, if your 3PL provider is constantly losing or damaging your products, then it is best to start looking elsewhere for ecommerce fulfillment.

2. Lack of support

With any ecommerce business comes refunds and returns. 3PL providers that cannot handle the logistics of sending products back and forth are not worth your time and money.

Think – if you had an emergency and needed quick and expert support, would your current 3PL be able to assist? If the answer is no, an issue could arise at any time that may have a detrimental impact on your business.

3. Insufficient scalability

The market is always evolving, meaning big changes to ecommerce are always just around the corner. Whilst you may be ready to scale up with your competition, is your current 3PL provider? 

If their technology integration and processes have not seen any updates or improvements for a long time, you may need to question if they can fulfill all your business requirements.

4. Bad customer reviews

If you are being bombarded with negative reviews and are unsure why, the fault may be with your 3PL provider. This is so important as reviews are incredibly likely to influence potential future sales, so you need to fix whatever is causing your customers to have a bad experience.

5. Increasing costs with no changes

Your 3PL provider may be increasing their costs yet you have seen no change in the way they work or to the quality of your service. If you find that they are charging more than competitors for little or no extra benefits, you should start considering your other options.

Seamlessly switching your 3PL provider

If you decide that switching 3PL provider is the best option for your business, you will need to assess what exactly you are missing. This may include rising costs, scalability, or any of the other reasons listed above.

To begin the process of switching 3PL provider, you should following these steps to ensure a smooth transition:

1. Start a full inventory count

The first step is to ask your current 3PL provider for a full inventory count and audit. You want the most accurate figure for your inventory so that your new provider is aware of the amount they will be taking on. This will also help to iron out any discrepancies.

Once this is complete, you can begin a plan on how best to move your inventory.

2. Check the current packing situation

Alongside a full audit, you will need to check how your product is currently packed. That way, your new provider will know exactly what to expect and how best to deal with it.

For example, your product may already be on pallets ready to go. Alternatively, it could be on pick racks and require packing.

3. Confirm with your new provider

Once you know how your product is packed, you will need to inform your new provider. They should then give you feedback on the best way for them to receive it. 

Your new provider may struggle with the current packing situation, so you will need to discuss how your old provider can adapt and help smooth the transition.

4. Discuss an exit strategy

Based on your conversation with the new 3PL provider, you will need to discuss any changes that need to be made for packing with your current provider.

On top of this, you will need to start thinking about how you want to allocate inventory.

5. Allocate your inventory and develop a strategy

You will next need to decide the best way to move your inventory and how to allocate it. The best way to do this depends entirely on the way your business works and which products have priority.

For example, one method is to prioritize items that take up a majority of the inventory. Alternatively, you may want to move the items with the slowest turnover as this will have the lowest impact on your sales during the initial transition.

Another method is to move some of your inventory while keeping the rest with your current provider so that shipping remains unaffected. Once the new provider is fully set up, you can then move the rest of your products over. Once you turn off your old provider, they can pack the rest of your inventory and transport it over.

Importantly, the optimal method of moving your inventory depends on your business needs. Consult with both your new and old providers to gauge their opinion too. They may offer some helpful insights on how to best move your inventory swiftly and effectively.

6. Set up preliminary tests and integrations

It is important for you to run preliminary tests and set up all the new software before making the move over to your new provider. This will give your team the chance to see how the process will run on a day to day basis. It is also a good time to teach your team how to use the new software during these tests so they can familiarize themselves with it.

Moreover, tests should highlight any issues that you didn’t originally predict. If you identify certain issues during testing, this allows you to come up with solutions before fulling switching

7. Meet the new team

Introducing yourselves to the new provider’s team is a great way to start building a relationship before switching 3pl providers. They need to understand how your business works so that they can provide the best quality service.

8. Discuss specialty requests

After meeting the team you will be working with, you should let them know of any specialty requests that you or your clients may have. That way, they can plan ahead of time to cater to these needs. For example, one of your clients may want their product packaged a certain way, which the new provider can adhere to when necessary.

9. Review future forecasts

One of the most important things to tell your new provider’s team is your forecast for the next six months. This number gives the new team ample time to prepare and allows them to allocate higher numbers of workers to help out in months that have higher forecasted volume. 

Transparency is always important when switching 3pl providers. Being honest with your figures and keeping the new provider in the loop can allow for a seamless transition and a good experience for all sides.

10. Ensure old bills are up to date

Before cutting ties with your old provider, make sure you pay all your old bills and leave on a positive note. You should conduct your exit in a polite and professional manner so that they can assist with your transition in the best way possible.

Switching 3PL providers: make the change with 3PL Center

At 3PL Center, we offer an unmatched suite of services that can propel your business to new heights of success. With a proven track record of excellence, 3PL Center is the optimal choice for all your fulfillment and supply chain management needs. 

Our team of experts oversees a comprehensive range of services, including order processing, inventory management, pick and pack, and shipping, all tailored to meet your business’s unique requirements.

What truly sets 3PL Center apart is our unwavering commitment to transparency and customization. We understand that each business operates differently, meaning we craft personalized solutions that align with your specific goals. By entrusting your fulfillment and supply chain management to 3PL Center, we can offer expert scalability and technological solutions to your ever-growing business.

If you are thinking about switching 3PL provider, call or email us now and we can get your transition started.

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