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7 signs it’s time to fire your 3PL

Woman in a suit sitting at a desk and holding up a handwritten sign on a notepad that says ‘youre fired!’

7 Signs it’s Time to Fire your Fulfillment Provider

It’s the start of a new year, and for many merchants, that means an evaluation of how different areas of their operation are running. As the dust settles after a busy holiday and returns season, it’s also a great time to look at how well your 3PL performed – and whether it’s time to consider switching to a new provider.

In this fast-evolving retail landscape, fulfillment and logistics have taken on a new level of importance. With consumers having a higher reliance on online shopping than ever before due to the COVID-19 pandemic, partnering with a 3PL that is aligned with your needs has never been more crucial to achieving a positive customer experience.

Last year, we released our Top Three Signs That It’s Time to Fire Your Fulfillment Provider for those who are currently outsourcing their order fulfillment. In this post, we explored:

  • Your 3PL provider falling behind during sales peaks
  • Difficulties with your 3PL finding cost-effective shipping strategies
  • A lack of integrations and data automation at your 3PL

Due to the breadth of this topic, we’re continuing this line of inquiry with four further areas that indicate that it’s time to make the switch. Let’s get started!

1. We can’t trust our inventory numbers

Does it take you 60 to 90 days to solve an inventory issue or find missing inventory? The accuracy and integrity of your inventory can make or break your brand’s reputation and your bottom line. But without adequate software automation, meeting order fill rates and order accuracy targets are where many 3PLs fall down fast. The real cost of poor inventory management is spread over inventory carrying costs, lost customers, and lost productivity. Doing inventory counts is time-consuming and costly.

Inventory management takes constant care with real-time numbers at your fingertips to avoid stock-outs and stay ahead of trends. For example, cosmetics is one such product category that requires a lot of advanced control support due to the necessity of First Expired First Out (FEFO) or First In First Out (FIFO) fulfillment strategies — meaning that visibility of your inventory is paramount. 

Real-time, 24/7 visibility into your inventory is the hallmark of a modern fulfillment provider. The ability to view, query, and export data with full reporting capabilities is invaluable to any growing online brand. You have the opportunity to get powerful business insights when you can review and parse inventory and other operational data from your entire account database.

What to ask your provider

  • What are your systems and processes for tracking inventory?
  • Do you offer real-time visibility into on-hand inventory?
  • Do you offer real-time inventory updates?
  • Are item histories transparent? 
  • Do you offer transparent order status reporting? 

2. We have no visibility and control over our operational data

Data trapped in silos is a sure-fire way to slow down your fulfillment and cause problems. Do you have to send an email to change an order? You’ve sent an email to your provider with an address change. Hours later, they write back telling you the order has already shipped.

If your 3PL has to go into their order system to make changes to an order, you and your customers are losing out. 

This is why brands and retailers, especially those selling apparel and footwear, need visibility into real-time inventory data; this allows for robust returns and exchange capabilities, including self-service returns, SKU matching, and custom packing slips. With this in mind, it’s hardly surprising that merchants list the visibility of inventory and supply chain data as top technological capabilities sought in their 3PL – behind only transportation planning and warehouse management.

Your 3PL should be providing transparent, real-time access to your operational data. You should be able to query the system to check current and historical order status and other metrics, 24/7. Open APIs enable seamless end-to-end management of complex digital services. For omnichannel, this means real-time order management and communication between the 3PL’s WMS and your core systems such as an online store and order management system (OMS).

What to ask your provider

  • How can we do analytics on our operations? 
  • Do you have an API?
  • How can I access my data?

3. Our brand gets pummeled on social media because of bad fulfillment

Customer expectations for a satisfying post-click experience are ratcheting up every year as brand interactions become more digital and include numerous touchpoints.

You can’t leave the critical order delivery experience to chance. Missed or late deliveries, the wrong product, or lack of customer communications about delivery timing or back-orders are all fodder for consumer complaints on social media. 

If your 3PL or the parcel carrier is off their game, you may be one of the last to know it – until it’s too late. You may have already lost a customer who is eager to tell everyone about it by word of mouth and social media. According to a 2018 study from Convey, 84% of consumers are unlikely to shop with a brand again after a poor delivery experience.

A good fulfillment provider will provide you with transparent, proactive exception management tools. You should expect your 3PL to make it easy for you to solve your end customer’s issues. System automation is important to stay timely and proactive in customer service. This means systems are in place to automatically inform you of missed or late customer deliveries, inaccurate orders, or other customer service issues – and what the 3PL is doing about it when there is an order problem or shipping issue

What to ask your provider

  • Are you proactive in reporting problems?
  • What are the methods you use to report issues with an order?
  • How do you help us manage customer service issues?

4. Our returns process is a big hassle

Do your customers have a hassle-free returns experience? The consumer is demanding an easy returns process and shouldn’t have to make a phone call to figure out a return. Amid high return rates for online purchases (as high as 30% for some product categories!), you need to keep your return-related costs down and preserve as much of the original revenue of the returned product that you can. If you have to email your 3PL to tell them about a return, you may want to rethink your returns provider.

Why is this so critical? Because according to the 2019 UPS Pulse of the Online Shopper study, 73% of online shoppers said the returns experience affected whether they would continue shopping with a retailer. If the experience is positive, you’ve hit on a strong customer retention strategy – but this all hinges on the capabilities of your 3PL provider.

A number of elements go into hassle-free returns for your end customers, including return forms and ideally the automatic generation of exchange labels with every order. Moreover, consumers want to receive credit for their returns – fast. A modern 3PL will integrate its WMS or other systems with third-party return services such as Returnly or other platforms to trigger a refund by updating the order status, thus getting the product back into inventory in a timely manner so it can be resold.

Merchants should be able to easily configure returns workflow with their 3PL on behalf of their customers, including creating exchange shipments and directing processes such as returning the item to inventory or setting aside, following an inspection. Additional capabilities include the ability to check the status of your customer’s returns in real-time or send your 3PL an alert to expect a return tied to an order.  

What to ask your provider

  • Do you have systems that allow us to access returns and exchanges, and guide returns workflow?
  • What tools you can provide us to generate RMAs (return merchandise authorization) for our customers? 
  • What tools can you provide us to distribute to customers for more information on how to do a return or exchange? 
  • Can you supply return labels to the customer?
    Do you have reconditioning services?

Switching 3PLs might seem like a headache, but it’s well worth it to achieve a more efficient, streamlined fulfillment operation that can actually save you money in the long run. With customer loyalty in eCommerce resting more and more on seamless, end-to-end shopping experiences, it’s never been more important to ensure that your fulfillment strategy embraces the latest technologies and best practices for advanced D2C fulfillment.
Want to learn more? Find all of these recommendations and more within our full ebook “7 Signs it’s Time to Fire your Fulfillment Provider”.

About the Whiplash platform

The Whiplash eCommerce technology platform provides best-in-class integration through an open API, order management tools, and warehouse management system (WMS) capabilities to both emerging and established brands. Whiplash enables the digital, omnichannel supply chain with fulfillment technology that transforms complex retail requirements into fail-safe instructions for warehouse employees.

Ready to make a move?

If you are ready to explore your options for improved fulfillment with a technologically-advanced 3PL who gets ecommerce fulfillment, contact us today.

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