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12 tips for a successful 3PL exit

illustration of an excited person next to a warehouse with an arrow to a different warehouse

[Updated post from March 15, 2021]

So, you’re moving to a new 3PL. Good on you for taking that step to ensure ongoing business growth! 

While starting a new 3PL partnership is exciting, you don’t want to get too far ahead of yourself; you need to make sure that you’re prepared to make a smooth exit from your current fulfillment provider first.

Ending a partnership can feel a little awkward, especially if your reasons for leaving are to do with poor service. Following the tips below will ensure that your exit from your current 3PL is as painless as possible.

1. Maintain your professionalism

Exiting a 3PL can elicit some strong emotions – and not all of them will be positive. Depending on how your relationship has ended, there might be a lot of water under the bridge in the form of broken SLAs and the like. But expressing negative emotions will likely make things worse, and could jeopardize the remainder of your time with the 3PL.  Instead, it’s best to stay as professional as possible so you can exit quickly and efficiently.

2. Understand your rights

You will have signed a contract when you partnered with your current 3PL. These contracts often usually contain strict clauses about giving notice of your exit and the conditions under which an exit is approved. Before you initiate your move, review your contract thoroughly to understand your rights and confidently negotiate your exit. The more customized your SLA is, the longer the notice period is likely to be.

3. Put it in writing

When first discussing your exit, it’s a good idea to meet with your 3PL in person. Or if this isn’t possible, to speak with them over the phone. Giving them the heads up that your business is planning on exiting is a common courtesy before you provide them with the formal paperwork. But be sure to put all important details in writing, as there are legal components to a 3PL exit. 

4. Plan the logistics of your move

No matter the size of your SKU count or storage footprint, exiting a 3PL is a complex process. Make sure to map out the following specifics before you make a move:

  • Clear timelines for when different systems will be deactivated/moved
  • The setup process/timeline at your new 3PL
  • Tasks/paperwork required for exiting your current 3PL
  • Plans for communicating with customers and suppliers
  • Blackout periods i.e. where no orders will be processed/shipped
  • Impacts of limited product availability, promotions, and campaigns
  • Transporting your inventory to your new 3PL

5. Create strategies for moving inventory

Moving inventory to a new 3PL is a time-consuming and stressful process. By making sure you get it right the first time around, you can avoid needing to reshuffle inventory or retrieve it earlier than you anticipated:

  • Identify which SKUs need to be prioritized, and how you can transport them first
  • Split up high-quantity items to shorten product receiving and staging
  • Conduct an ABC analysis
  • Determine the best transportation options and schedule freight forwarders
  • Identify how many trucks can be moved daily and schedule them according to your new 3PL’s receiving requirements

6. Discard what you don’t need

Moving inventory is an expensive process. You’ll need to pay your current 3PL to pack and load your inventory, as well as shipping and receiving costs. 

This makes moving 3PLs a great time to take stock of your inventory and whether there is any dead stock or excess inventory that your business should consider destroying, rather than dragging them with you to your new fulfillment provider. This helps to minimize transfer costs and rationalize your SKU base at the same time.

7. Set clear expectations

Set expectations for how your SKUs should be packaged, labeled, and shipped to your new provider. If you don’t, your current 3PL will do it how they see fit, rather than to the specifications of your new 3PL. This could lead to a slow receiving process, order delays, and inventory inaccuracies.

8. Separate your SKUs

It’s a good idea to avoid mixing your SKUs in containers, even if this does save on freight fees or space. All this achieves is putting off the work of sorting SKUs until they arrive at your new 3PL when you’ll already have a to-do list a mile long. Mixing SKUs can also lead to lost or misplaced inventory, which can result in difficulty fulfilling fresh orders.

9. Oversee the exit in-person

They say if you want it done right, you should do it yourself. When it comes to exiting a 3PL, that’s partially true. Although it requires additional labor on your end, there are clear benefits to overseeing your exit in person. The most obvious is the ability to supervise hired temp labor crews and enforce clear job instructions. This will keep you confident that your inventory is managed correctly.

10. Set cost expectations

Have a conversation early on about exit costs from your current 3PL and what you are willing to pay for. This may be covered in your contract. Be sure to set expectations around your exit schedule, and evaluate how much over-time the move and its associated tasks might cost you.

11. Streamline your start-up

When receiving process begins at your new 3PL, it’s important to check that they are ready and able to execute this workflow seamlessly. Instead of sending all of your inventory at the same time, try sending them one box of each product. They’ll get the chance to enter relevant information like product weight, descriptions, and packing rules. This will speed up the receiving process when the rest of your products arrive.

12. Replace existing boxes and re-label SKUs

Old inventory often lives in old, tattered boxes. Consider reboxing these items so they arrive at your new 3PL in one piece and are less likely to get damaged in transit. Before your exit, set clear standards about which items need reboxing, and which don’t. Also be sure to replace inventory labels, which can become faded or scratched out over time. This will make it easier for your new 3PL to receive and organize inventory.

Partner with a 3PL who offers a smooth transition

Looking to exit your current 3PL? Ryder E-commerce By Whiplash can help. Our experienced onboarding and Customer Success teams work closely with our new clients to ensure seamless transitions from their old partner. Contact us today to find out how we can assist your business with better growth opportunities and easy scaling.

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