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With logistics related costs projected to grow over 2.31 trillion by 2028, it goes without saying that selecting the right 3PL partner is a critical business move for all retailers. 3PL inadequacies can’t always be uncovered before the contract is signed, but here are some key questions to ask to help uncover a bad relationship before one begins:
What’s the timeline for receiving and processing?
How do you optimize shipping costs to maximize savings?
Does your tech integrate with our tech stack?
How is inventory managed and tracked?
Is real-time order visibility provided?
Is your customer success team reactive or proactive?
How are returns handled?
While these are great questions to help identify a bad 3PL partner before the deal is inked, red flags aren’t always apparent. A well-functioning 3PL provider will enhance many parts of your business operation and brand experience. However, if you’re experiencing stockouts, mismanaged inventory, or disappointed customers, it may be time to consider upgrading your 3PL.
If you’ve been wondering if it’s time to break up with your current provider, here are five telltale signs that will help provide some clarity to that wonder:
Scalability
As your brand grows, your supply chain strategy should grow alongside it. Outdated 3PL warehouse and order management systems struggle to accommodate increasing demand, offering limited upward mobility for merchants. As brands evolve, so do their distribution channels, customer base, customer geography, and customer expectations.
Modern 3PL warehouse management systems and order management systems should be adaptable to accommodate growing volumes, channels, and demands. In this light, ensuring that your supply chain can keep up with the growth of your brand is a “must have”.
Real-time visibility and tracking
We’d all like to be in the warehouse for every order that flies out the shipping bay doors but that’s just not realistic. Healthy visibility and tracking are essential parts of a well-functioning supply chain and without real-time data and insights into your inventory, orders, and shipments, it becomes challenging to make informed decisions and provide top-notch customer service.
When examining your existing 3PL relationship consider their ability to provide comprehensive visibility and tracking options – you shouldn’t need to be at the fulfillment center to peer into your operations.
Modern, tech-first, fulfillment partners will offer real-time updates, traceability, and data analytics that empower you to keep a close eye on your supply chain's performance without ever stepping foot in the facility.
High costs and hidden fees
Cost-effectiveness is a primary concern for any business, especially in the current economic climate. There’s no surprise that your brand has experienced increased fulfillment costs but if you’re experiencing skyrocketing 3PL costs, or facing unexpected hidden fees, your 3PL provider may be to blame.
Shipping carrier relationships, labor management, logistical expertise, and warehouse technology and automation are key to keeping costs down by minimizing waste and maximizing operational performance. It’s important to consider your 3PL experience in the industry, carefully examine their external and internal relationships, and understand how labor and/or automation is put to work for your brand.
Modern, tech-forward, 3PL providers utilize AI and data analytics to allocate resources in the most efficient way for your specific company. The goal: to drive your costs down, not up.
Customer support
Customers are the lifeblood of your business and the support your 3PL partner provides in ensuring those customers are happy is gold! Look for a fulfillment provider that provides a dedicated human to support your needs. These dedicated resources should be proactive, not reactive in the solutions they put forth. Their feedback and ideation should stretch beyond the four walls of the warehouse as other business operations have a symbiotic relationship with your supply chain that should never be ignored.
Poor communication, unresponsive support, and lackluster service can erode trust, while open communication and dialogue, with the right stakeholders, can open new roads to save money and increase profits.
A superior 3PL logistics provider should prioritize the client/customer relationship, ensuring your clients' needs are met promptly and professionally. If your 3PL provider is falling short in this department, it may be time to find better humans.
Limited geographic reach
As your customer base grows, the locations of your customers will also likely expand. If you’re currently partnered with a regional or local 3PL, this could end up significantly increasing your distribution costs. A national 3PL, with multiple strategic locations across the United States, helps keep these unnecessary costs down by offering a central location to reach customers quicker, or a multi-node solution for decreased transit times and cost savings.
If your current 3PL is restricted to a limited geographic area, you may face challenges when trying to reach new customers or expand your distribution network. Upgrading to a 3PL with a broader geographic reach can open doors to new opportunities, helping you tap into new markets and customer bases while keeping costs at bay.
Don’t settle for less, select the best
Don’t wait until your business is in the red, be proactive in your effort to find the right 3PL partner to run along your side. Fulfillment processes impact so much of the customer experience and can truly make or break the success of a brand. Why leave them in the hands of a logistics provider that just isn’t cutting the cake anymore?
While exploring alternative 3PL solutions, consider partnering with true fulfillment experts like Cart.com. Our network of 14 strategically located fulfillment centers, with over 8M sq. ft. of warehouse space, provides the comprehensive logistics solutions brands need to succeed.
By investing in an adaptable 3P with the right relationships, expertise, technology, and automation, you can position your brand for the long-term growth you expect, with every order.
