3PL stands for third-party logistics and if you are in the eCommerce market you know how important they can be. There could be a multitude of reasons that you are shopping around to see what else is out there, they may have changed their pricing so they are no longer competitive, or you have just simply outgrown the provider and are looking for bigger and better. It is always hard to switch and to know when so here are some tips that you can look for that may tell you that it is time to start looking for a new 3PL provider.
When first looking to partner with a 3PL provider you are thinking about cost-effectiveness and accuracy, there is not much thought if they will be able to handle your capacity in the coming years. This is something that may become a problem if your eCommerce product becomes extremely popular, if you are working with a company that is not willing to work with you and is not growing with you they may end up holding you back. They may not have the technology or space to be able to handle your business and this will always end poorly. So it is always natural to feel as if you have outgrown a company and stepping away and looking for a new partner is a part of the business.
Lack of accuracy
When customers are constantly returning items or getting the wrong items it reflects poorly on your company and not necessarily the fulfillment provider. Your company is the front-facing company so when there is a problem they are most likely going to blame your company for the mistake. In a world where customer retention is the key to success, if lack of accuracy is a constant occurrence it could heavily affect your company. This could also lead to complaints about your products if they are getting shipped damaged or to the wrong addresses. It is stated that 92 percent of customers are more likely to trust their peers when doing research on a product, so if your fulfillment partner is doing a poor job and that is getting relayed into poor reviews, you will lose out on future customers and revenue
Lastly and most importantly, if the 3PL provider is charging an arm and a leg and there are more and more invisible costs every year. This may be a good hint that it may be time to start shopping around and seeing if you are paying a competitive rate. When first entering the market there may not have been many companies that were willing to work with you, so most likely you were going to pay a premium, but the more business that you bring the better rate that you can get. The best you can do is find a 3PL that works the best for you, sometimes the cheapest isn’t the best. One thing that you should make sure of is that the company that you are talking to has strong relationships with a carrier so that you can reap the benefits of the discounts that they get in shipping.
This may be a stressful time, but if you think about a long-term goal changing your 3PL provider may be one of the best decisions that you can make. The best thing you can do is take your time and chose a 3PL that is willing to grow with your company and has your best interest in mind. Not everyone is going to have the same result with a certain company, so it is important to do your research!
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