When most companies think about changing fulfillment partners, they’ve either had a poor experience with a 3PL or can’t maintain in-house operations as they’ve scaled. There’s a pain or frustration that the company wants to address, but practical operations managers know that this reflex should give them pause. So, they internally step back and ask, “Is now a bad time to change fulfillment partners?”
That’s one of the best questions to ask when you’re starting the process because it gets to the heart of your needs, existing preparations, and the impact on your business. From our perspective as a strategic growth partner, we’d like to help you frame this question and answer it in a way that supports your business.
Spoiler: There’s no such thing as a “bad” time to change 3PLs. But some options and elements can improve your decision and help you find the perfect time to make a change.
Why the short answer is no
When you need to change, especially if your business is at risk, there’s no truly bad time to change fulfillment partners. It can happen on multiple timetables, even during peak or the year-end holidays. But if the current arrangement is no longer working, it’s important to make the switch as soon as possible. Waiting too long can jeopardize the business and lead to even more problems.
Current threats or risks to operations might be most important here. The bigger the danger that something irreparable will happen, the sooner you want to establish a new partnership. Immediate threats can push up your timetable as needed.
That’s part of the origin story of Red Stag Fulfillment. One holiday season, our founders went to their 3PL and found it in such a poor state that they promised to do it better. Now, we offer expert advice and support to companies who want to improve fulfillment and customer satisfaction.
So, why do certain times seem more challenging?
While there’s no bad time to change fulfillment partners, some times of the year or points in your business will make it more difficult and require more due diligence. When you’re facing those times, it’s good to hit pause, master your situation, and prepare. Let’s dive a little more into that preparation and why the switch can feel like an uphill battle — plus some ways to minimize that.
Busy season is tougher because you’re using your inventory more
Different times of the year can indeed pose different challenges when it comes to changing fulfillment partners. For example, holiday periods can be particularly difficult as online retailers experience spikes in demand. The last thing you want is to compound customer service concerns at this time. Your team is focused on restocking and resupplying, but they needed to place those orders months before so that you’ve got the right containers and products moving through your supply chain.
Changing fulfillment partners at this point takes more work because you’ve got goods in transit and can’t afford to have orders dropped, missed, or going unfulfilled. You and your 3PL will need to devote more time to ensuring continuity because of the complexity of this time.
If you’re a seasonal business, you’ll need to consider the fact that your fulfillment partner will need to be able to handle increased volume during your busy season. Red Stag Fulfillment works with companies with strong selling seasons throughout the year, so we have the capacity and space to prep for increased goods. However, some specialized or narrow 3PLs may not be set up for this. Both you and your partner need to be ready and capable to ensure a seamless transition.
Consider shifting to when you’ve got lower demand
The opposite consideration holds true and may give you a better timeframe to make the switch. Seasonal businesses often find they have less inventory on hand during their off-season. While this means you’re likely to use inventory to fill orders, you’ve also got a few opportunities.
Changing fulfillment partners during your off-season makes it easy to run down your inventory at the poorer-performing 3PL while you send stock to your new partner. Then, when inventory is depleted, you can seamlessly switch to the stock at the newer 3PL.
Strong planning makes this relatively easy, and thankfully, many order tools can handle the change automatically so that you’re not sending orders to an old warehouse unable to fill them.
There are different types of time crunches for changing fulfillment partners
When changing fulfillment partners, companies should avoid time crunches whenever possible. This can be a difficult task, as there are many factors to consider, and the process can take some time. However, rushing into a decision can often lead to unnecessary challenges.
Consider the different types of crunches or stress your company may face:
- Order demand increases — this can include your peak season
- Time constraints — while it’s possible to switch quickly, short turnarounds put pressure on you and the 3PL
- Carrier capacity — sometimes switching may make it difficult to secure capacity, though unlikely to be a concern if current trends hold
- Team transitions — changes in your leadership may slow this process because institutional knowledge helps ensure smooth transitions
Look for any other shift that may impact communication and decision-making. Your 3PL wants to ensure your team understands and can support the change. Buy-in at all levels is essential to ensuring a positive relationship and full understanding and acceptance of the agreements.
Changing fulfillment partners is a big decision, so it’s important to do it right. Avoiding a crunch is crucial to ensuring a smooth transition and setting your company up for success.
Can you improve this decision?
It’s always possible to switch 3PLs, and we’ve seen companies do it at just about every point in the year. The good news is that there are tactics you can use to make the switch easy and successful, even if you must change during peak to protect your operations.
Bottom line: It all comes down to planning.
Avoiding times when your company is stressed, in terms of teams or products, can help. When possible, create a long runway for the entire process, such as starting during early spring for a summer transition. That makes it easy to walk through change management procedures for your team and your 3PL. This way, even if the technical change happens during your peak, you’ve spent time putting people, products, and procedures in place for a smooth transition.
Having time also ensures you’ve found the right partner. Ensure they’re experts with products like yours and have room for you to grow. Build a rapport and ask direct, tough questions from the start. A 3PL is a partner designed to help you build your business. If they can’t explain how they support that growth, keep looking.
Can you create value when changing fulfillment partners?
The other aspect of making changing fulfillment partners smooth and successful is identifying where you can create value in the supply chain. Think beyond pure order volume for the 3PL.
For example, say you ship with a single carrier now. If you’re shifting from using your own carrier accounts to the 3PL’s, there’s a good chance you’ll secure some savings based on the 3PL’s volume. Having the flexibility to shift some of this volume to a different carrier may make it easier for the 3PL by enticing this new carrier with additional volume. Moving your fulfillment becomes a value-add for that new carrier and gives the 3PL additional leverage to minimize any chance of a capacity crunch, especially if you’re changing close to peak.
Get started changing fulfillment partners
Don’t let a poor 3PL experience prevent you from finding the right partner or make you rush these decisions. Give yourself time to slow down and do your due diligence when possible. Learn the new SOPs and requirements that potential partners suggest. Give your team time and space to ask the right questions and ensure you’re addressing the issues in your current setup.
Getting that right means understanding the timeline and some requirements. Red Stag’s experts have created a new eBook designed to help you do that. Click the image below to grab a copy of “The Ultimate Guide on How to Transition to a Growth-Driven 3PL” and learn how to switch to a 3PL you’ll love.