The holiday season is a make-or-break time for eCommerce fulfillment. Poor fulfillment company performance during the holidays leads some online retailers to switch fulfillment companies in the new year. In fact, Red Stag Fulfillment was founded by two eCommerce entrepreneurs who decided to open the 3PL services company they wished they had after a disastrous holiday fulfillment failure.
At Red Stag Fulfillment, we often see a surge of inquiries in the first quarter of the year, as companies look to switch fulfillment companies after their 3PLs didn’t deliver during the holidays. However, if you’re already unhappy with your fulfillment provider, should you wait or change now? That depends on how fast you can onboard with a new fulfillment company.
Why switch fulfillment providers?
Switching fulfillment companies is not a decision to take lightly. There are costs, both in time and money. For example, you’ll incur the expense of trucking your products to new warehouses, plus time lost during the handover to the new 3PL.
Some of the reasons that you might want to switch fulfillment companies:
- Inventory shrinkage is eating into your profits.
- Your 3PL isn’t providing the agreed-upon level of service.
- You’ve outgrown your current fulfillment center.
- Your business is too big for self-fulfillment, and you’re outsourcing your logistics for the first time.
- You need a fulfillment company that is better equipped to handle the type of merchandise you sell.
- Your current 3PL’s fulfillment error rate is costing you in returns and poor customer experience.
- Warehouse delays, either inbound (receiving) or outbound (shipping), are slowing down your fulfillment and increasing your lead time.
- You need better national fulfillment warehouse locations to reach your customers quickly.
When you need to switch fulfillment companies, your first task is to do a thorough search to find a 3PL that better suits your needs. We have created a fulfillment company questionnaire to help you ask the right questions and find an order fulfillment company that’s a good fit for your brand.
Once you find your ideal 3PL, the next question is when to switch and how long it will take.
Factors that affect the timeline to switch fulfillment companies
The time it will take you to onboard with a new fulfillment company depends on several factors, including:
- How you handle the stock transition. Will you ship stock from your current warehouses to your new ones? Or will you ship inventory from your manufacturer directly to your new 3PL?
- Other logistic factors of the transfer, such as the distance to your new warehouses.
- Onboarding time at the new warehouse, including getting your products into their system and sending test shipments.
- How quickly both parties can complete the paperwork needed to sign on with the new warehouse.
One factor over which you have little control is transport delays. If you plan to switch fulfillment companies during the holidays, consider limited carrier capacity.
How to speed up onboarding with a new fulfillment company
Fortunately, there are steps you and your fulfillment company can take to speed the transition to a new fulfillment company.
Make a transition plan with your new 3PL
Sit down with your new fulfillment company and map out every step in your transition. Leverage the 3PL’s logistics expertise to help you plan the best way to transition to a new fulfillment warehouse.
If you’re moving from self-fulfillment to a third-party logistics provider, you will need to integrate your systems with the 3PL. You might need some startup time to get used to new processes in your supply chain. However, you can apply the time you would have spent managing in-house fulfillment to managing the transition.
When you switch fulfillment companies, your plan should include which warehouse locations will process and ship your orders and inventory management at the new facilities. At Red Stag Fulfillment, we have onboarding specialists who can guide you through this process and help you make informed decisions.
Complete paperwork promptly
During the onboarding process, the 3PL will send you contracts and other documents to review and sign. Every day that you don’t attend to the documents is a day of delay in your onboarding. If you want to get up and running quickly, reading and returning paperwork promptly will speed the process.
Read the instructions
Don’t assume you know everything you need to know from talking with your sales or onboarding rep or because you’re a seasoned eCommerce pro. Every fulfillment company has its own processes and procedures; the more familiar you are with those, the smoother the transition will be. If you’re someone who hates reading instructions (we feel your pain), assign one of your staffers to run that part of the fulfillment switch.
Give the 3PL as much information about your order processing as possible
Ideally, you chose a 3PL with experience fulfilling the types of products you sell. Still, every company is different, so it’s essential to transmit the particulars of your pick and pack process and your shipping needs to your new partner.
Some of the details that will be helpful to your new 3PL include:
- What box sizes your products need
- Whether your products ship in the manufacturer’s packaging or overboxed
- Special handling or shipping instructions, such as bubble wrapping a delicate product to ship it securely
- Whether you want multiple items in the same order to ship separately or get consolidated into a single package
Upload your SKUs to the new system
You can help move the onboarding process forward by uploading all your SKUs into the new provider’s system. Enter additional data, such as the dimensions and weight of each product. That will allow your 3PL to accurately calculate shipping costs for each package.
Provide ASNs before your first deliveries
When an inbound shipment arrives, your fulfillment warehouse will use the advance shipping notice to ensure the products are entered correctly into the system. ASNs are critical when you switch fulfillment companies because the warehouse staff won’t be familiar with your products.
Without an ASN, a shipment may sit on the loading dock for a day or more while the 3PL figures out where the inventory belongs. Also, advance notice of incoming freight allows the warehouse to keep dock space open to receive it and plan for staffing to unload the stock quickly. So, submit ASNs ahead of time for any inbound shipments to ensure a smooth receiving process.
Ask your fulfillment provider to use cross-docking to move backorders quickly
Switching 3PLs can lead to a period (hopefully short) where your products are between warehouses. During that time, you might accumulate backorders. Ask your new fulfillment company if they can do cross docking to clear backorders quickly and reduce the delay for your customers. At Red Stag Fulfillment, we have turned around an entire container of backorders in a day using cross-docking.
Plan to spend time on the transition
The more time you can set aside to work on the transition, the more quickly you can ramp up with your new order fulfillment company. By moving fast on each of the actions you need to take during onboarding, you can take days or even weeks off the process. Then, once you are up and running with your new fulfillment partner, you leave fulfillment to the pros and turn your attention to other aspects of your business.
Is it a bad idea to switch fulfillment companies before the holidays?
The short answer to this question is yes, it’s probably not a good idea to move to another fulfillment company close to the peak holiday season for three reasons:
- You could pay more for freight to move your products because of peak pricing.
- Your inventory might get caught in holiday shipping backlogs.
- Both your new warehouse will be busy managing the holiday rush and might not have as much time to devote to onboarding new clients.
However, there may be situations that demand a fast move, even if it is the peak season:
- You anticipate that your current fulfillment operations can’t handle your holiday rush. It’s better to switch fulfillment companies as early as feasible rather than dealing with fulfillment backlogs. In this situation, you could continue with your current 3PL and add a second fulfillment provider to handle the holiday overflow. After the holidays, you can complete your fulfillment company switch.
- FBA limits throttle your holiday fulfillment. Again, you can ship through FBA plus an independent 3PL. Red Stag Fulfillment has clients that have found this mixed model successful. Don’t let FBA limit your business growth.
For instance, Homestead Brands switched to Red Stag Fulfillment in the middle of the holiday season. After their 3PL’s poor performance for Black Friday sales, the company knew it couldn’t afford a holiday season with a high level of fulfillment errors. And, while switching fulfillment companies during peak eCommerce season can present challenges, you might benefit from being the only new client onboarding at that time, or one of just a few.
Red Stag Fulfillment can help you optimize your order logistics
Red Stag Fulfillment is ready to serve your eCommerce fulfillment needs any time of the year. Our accuracy guarantees will improve your customer experience and make your fulfillment more affordable. And we are the leading fulfillment company for oversized products. If you are ready to switch fulfillment companies, please give us a call.
More about switching fulfillment companies:
- The Complete Guide to Onboarding With a New Logistics Company
- Best Shipping Options for ECommerce
- How to Pick a Warehouse Provider