Switching to the right third-party logistics (3PL) partner transforms your fulfillment operations and directly improves your bottom line. This guide delivers a streamlined process for ecommerce businesses to evaluate their current situation, execute a seamless transition, and optimize their new fulfillment partnership.
We’ve consulted industry experts with decades of combined logistics experience to create this practical framework:
Tony Runyan, Chief Client Officer, Red Stag Fulfillment
Ryan Marine, Director of Sales, Red Stag Fulfillment
Justin Loftis, Director of Client Success, Red Stag Fulfillment
Tyler Sellers, Director of Operations, Red Stag Fulfillment
Donovan Sullivan, Operations Manager, NFI
Their insights inform our three-phase approach that will help you prepare to leave your current provider, transition efficiently, and maximize the value of your new fulfillment solution.
7 definitive signs it’s time to switch 3PL providers
Before we dive into how to switch 3PLs, let’s explore a few reasons why it might be time for a change. Our experts offer their words of wisdom, plus several critical signs it’s time to switch.
Recognizing these warning signs early saves you from revenue loss and reputation damage.
There can be multiple signs that it’s time to switch your 3PL provider. Some of them will be data-driven reasons. Others may be harder to quantify, but they’re just as valid because they indirectly affect your bottom line and total cost of fulfillment.
Donovan Sullivan
Operations Manager
NFI
Persistent errors without accountability
01
When mistakes become patterns rather than exceptions, your order fulfillment has become a liability. High-performing fulfillment providers make occasional errors, but the difference lies in error frequency and how those providers respond.
Time to switch when:
High error rates start to affect your brand reputation and bottom line.
Your 3PL provider fails to provide clear, documented corrective actions after repeated issues
You’re constantly discovering problems before your 3PL identifies them
Your 3PL should build trust through transparency. You shouldn’t have to identify and seek out problems. Your 3PL should be bringing them to you. They should propose solutions that limit issues going forward.
Ryan Marine
Director of Sales
Red Stag Fulfillment
Inconsistent delivery performance
02
Order processing time should be predictable and consistent. Variability in shipping timelines creates customer service headaches and damages your brand experience.
Time to switch when:
Shipping times vary drastically without explanation
Late deliveries routinely generate customer complaints
Your 3PL consistently misses same-day shipping cutoff times
Mismanagement of on-time deliveries is a big issue that often drives businesses to seek a new fulfillment provider. If, after processing an order, the time it takes your 3PL to ship that order varies wildly, it’s time to switch.
Tyler Sellers
Director of Operations
Red Stag Fulfillment
Unresponsive customer service
03
Your 3PL relationship requires active communication and responsive support. Unreturned calls and poor communication indicate fundamental service issues.
Time to switch when:
Support requests consistently take more than 24 hours for acknowledgment
Account managers change frequently without proper transitions
You’re forced to escalate routine problems to get attention
Rising costs without improved service
04
Price increases should correspond with service enhancements or expanded capabilities. When costs increase while service quality stagnates or declines, your partnership is deteriorating.
Time to switch when:
Annual cost increases exceed 5-10% without corresponding service improvements
You’re regularly hit with unexpected fees and surcharges
Your 3PL provider can’t clearly justify price increases
If you’re not seeing any added value alongside increasing costs, it’s time to look elsewhere. You’re not getting your money’s worth from your provider.
Donovan Sullivan
Operations Manager
NFI
Technology limitations affecting operations
05
Modern fulfillment requires sophisticated technology for inventory management, order tracking, and data analysis. Outdated backend technology directly impacts your ability to make informed business decisions.
Time to switch when:
You lack real-time visibility into current inventory and order status
System integration issues force you to manually upload orders and create errors
Your 3PL resists technology upgrades or improvements, and the technology work is falling behind
If you’re not receiving accurate data, you’re going to make bad business decisions based on inaccuracies. With Red Stag Fulfillment, you can track your inventory as it’s being put away. You know when your inventory is actually available.
Justin Loftis
Director of Client Success and Operations Integrations Red Stag Fulfillment
Geographic limitations hindering growth
06
Your 3PL’s fulfillment centers should align with your customer distribution and growth plans. Misalignment results in higher shipping costs and longer transit times.
Time to switch when:
Your customer base has shifted geographically away from your 3PL’s network
Shipping costs are rising due to distance-based zone charges
Your 3PL can’t service new markets as your business scales
NOTE: Quality matters more than quantity with warehouse locations. An optimized two-location network often outperforms scattered multi-warehouse arrangements. As Justin Loftis explains: “Red Stag only has two fulfillment centers, but it makes inventory management that much easier. I know it sounds great to have a dozen fulfillment centers, but it’s only a good thing if it makes financial sense to send your inventory to all 12 locations.”
Capacity constraints blocking expansion
07
Your fulfillment company should enable growth, not restrict it. When fulfillment services become a bottleneck rather than an accelerator, a change is necessary.
Time to switch when:
Your 3PL provider struggles to handle peak season volumes
Warehouse space limits prevent inventory expansion
New sales channel opportunities for your ecommerce store are hindered by fulfillment limitations
Your 3PL can inhibit your growth if they don’t have the tech stack required to enable new sales channels—whether that’s ecommerce platforms or brick-and-mortar retailers. Likewise, if they’re unable to keep up with your volume, especially during your peak season, they’re hindering your growth.
Ryan Marine
Director of Sales
Red Stag Fulfillment
Why you can’t afford to delay switching
If you’ve identified one or more of these warning signs, immediate action is critical. Even under ideal circumstances, the process takes 30-90 days, and the cost of delay is substantial:
Financial impact: Every day with subpar fulfillment directly affects your bottom line through lost sales, customer acquisition costs, and operational inefficiencies.
Customer loyalty risk: According to the Tomorrow’s Commerce 2025 report, 56% of consumers will abandon retailers who don’t meet their shipping expectations. Once customers leave due to fulfillment issues or bad reviews, they rarely return.
The good news: A systematic approach to switching 3PLs can minimize disruption while dramatically improving your fulfillment experience. The following three-phase process will guide you through each step of a successful transition.
How to switch 3PLs: A strategic three-phase approach
A methodical 3PL transition delivers immediate operational improvements while protecting your customer experience. This guide breaks down the process into three actionable phases to minimize disruption and maximize your ROI.
The three-phase transition framework
Phase 1: Prepare to leave your current provider. Build your transition foundation by defining requirements, reviewing contract obligations, and selecting your ideal new fulfillment provider. This preparation prevents costly mistakes and establishes clear success metrics.
Phase 2: Plan and test your transition. Execute a controlled migration with detailed transition plans, stakeholder communication, and progressive testing. This systematic approach maintains service continuity while validating your new provider’s capabilities.
Phase 3: Optimize your new partnership. Establish performance monitoring, refine processes, and align growth strategies with your new 3PL. This optimization ensures your fulfillment operation continues to evolve with your business as it constantly evolves.
By following this structured framework, you’ll transform your fulfillment operation from a business liability into a competitive advantage in your supply chain.
Phase 1: Prepare to leave your current provider
Determine your fulfillment cost ceiling and transition readiness
01
Before approaching potential 3PL providers, establish your total fulfillment cost and operational requirements. This assessment creates clear parameters for your 3PL search and transition planning.
Review your budget
Understanding the financial state of your business is crucial for making informed decisions about switching 3PL providers.
Tony Runyan
Chief Client Officer
Red Stag Fulfillment
A comprehensive understanding of your financial standing provides the foundation for a successful 3PL transition. This insight is essential for:
Justifying your decision to stakeholders with complete financial context
Confirming your organization has the financial stability to manage transition costs (onboarding fees, systems integration, potential sales disruptions)
Evaluating the true value proposition of potential 3PL partners beyond surface-level pricing
This holistic approach recognizes an important reality: the only financial metric that truly matters is the bottom-line amount on your invoice each month.
Companies often change 3PLs for purely financial reasons. Having candid conversations early about what is and is not in your budget will help manage expectations.
Donovan Sullivan
Operations Manager
NFI
Focus on total cost of fulfillment
When reviewing your budget, focus on the total cost of fulfillment rather than attempting line-by-line comparisons between providers. This approach is critical because:
3PL pricing structures vary dramatically, making direct line-item comparisons misleading
Some providers offer discounts on certain services only to increase margins elsewhere
The bottom-line monthly invoice amount reveals the true cost impact on your business
WARNING: Avoid getting caught in the trap of line-item comparisons between 3PLs. Pricing structures vary dramatically between providers, with discounts on some services often offset by higher costs elsewhere. The bottom-line monthly total provides the only reliable comparison point.
Look beyond the visible costs
The cheapest 3PL on paper often becomes the most expensive in practice. When evaluating financial impact, consider these three dimensions of cost:
Direct costs: The invoiced amounts you pay monthly for standard services
Hidden costs: Unexpected fees that may emerge months into the relationship due to contractual fine print or operational issues
Operational impact costs: The financial damage from:
Lost or damaged inventory (shrinkage)
Mis-shipped orders
Late deliveries
Customer service problems
Brand reputation damage
Management time spent solving fulfillment problems
For a deeper understanding of 3PL pricing structures and how to evaluate them effectively, read our comprehensive guide to 3PL costs.
Assess your financial readiness for transition
Beyond understanding your current costs, evaluate your financial capacity to handle the transition:
Available budget for one-time transition expenses
Cash reserves to manage potential overlap period with dual providers
Financial buffer for potential service disruptions during transition
Budget allocation for potential early termination fees
NOTE: Plan for 30-90 days where you might be paying both your old fulfillment center and new fulfillment center simultaneously. Without sufficient cash flow to manage this period, even the most promising new relationship can fail before delivering benefits.
Set your total budget ceiling
Based on your current total fulfillment cost, establish a clear maximum monthly budget for your new 3PL partnership:
Maximum acceptable monthly expenditure
Anticipated ROI from the transition
Expected payback period for transition costs
Remember that the cheapest option often becomes the most expensive when service failures are factored in. A 3PL that offers rock-bottom rates typically achieves those savings by cutting corners in areas that will ultimately impact your customer experience and create hidden costs.
With your total cost framework and operational requirements documented, you can now identify specific service standards and create a growth plan that your new 3PL partner must support.
Define your operational requirements blueprint
02
With your financial assessment complete, document your specific operational needs to identify a 3PL that can support both your current business and future growth.
This comprehensive requirements blueprint becomes your evaluation framework for potential providers and the foundation for your service agreements.
Document your core business requirements
Start by establishing the fundamental capacity and performance standards your new fulfillment provider must meet:
Volume and capacity needs:
Total monthly order volume
Peak season volume requirements
Total inventory storage requirements
Special handling needs (oversized items, temperature control, etc.)
Performance requirements:
Expected order accuracy
Shipping timeframes
Inventory visibility
Returns processing capabilities
These baseline metrics establish minimum thresholds for 3PL consideration. If a provider cannot meet these fundamental requirements, they cannot serve your business effectively regardless of pricing or other factors.
Establish measurable service standards
Vague service promises create endless disputes and disappointment. Protect your customer experience by defining concrete, measurable requirements that provide leverage during contract negotiations and ensure accountability throughout your partnership.
Document core fulfillment services
Start by clearly defining your expectations for fundamental services that every ecommerce business needs:
Order fulfillment: Specify expected order processing times, packaging standards, and carrier selection protocols.
Ecommerce platform integration: Detail required connection methods with your selling platforms, including API capabilities, order sync frequency, and inventory update intervals.
Omnichannel distribution: Define requirements for managing inventory across multiple sales channels, including marketplace-specific processing and retail compliance.
Inventory management: Establish expectations for cycle counting frequency, annual physical inventories, and reconciliation procedures.
FBA prep: Document specific Amazon prep requirements including labeling standards, packaging guidelines, and shipment creation processes.
Inventory planning and forecasting: Outline reporting needs for stock levels, reorder recommendations, and allocation planning.
Define specialized requirements
Depending on your products, additional requirements may be critical to your operations:
Kitting and assembly: Document component storage methods, assembly instructions, quality control checkpoints, and expected throughput times.
Big, heavy, & bulky fulfillment: Specify equipment needs, handling procedures, and special packaging requirements for large or bulky products.
Fragile product packaging: Detail protective materials, packing methods, and quality testing standards to prevent damage claims.
Regulatory compliance (FDA, hazmat): Establish procedures for regulated products, including documentation requirements, storage protocols, and shipping restrictions.
Rather than accepting general service promises, establish concrete metrics for your Service Level Agreement (SLA). Specify:
Create concrete SLA metrics
Rather than accepting general service promises, establish specific, measurable standards for your Service Level Agreement (SLA):
Maximum acceptable error rate: Define the percentage of orders that can contain errors before penalties apply. Leading 3PLs offer guarantees of 100% accuracy with financial penalties for mistakes.
Inventory shrinkage allowance: Specify the maximum acceptable inventory loss percentage. Top-performing providers offer zero shrinkage policies with reimbursement for any lost or damaged items.
Order processing timeframes: Establish clear cutoff times for same-day shipping versus next-day processing, including expectations for weekend and holiday handling.
Receiving timeframes: Define how quickly inbound inventory must be processed and made available for sale after arrival at the warehouse. Industry leaders commit to 48 hours or less.
WARNING: Without specific, measurable standards in your SLA, you’ll have little recourse when service falls short. Generic agreements without defined metrics and consequences almost always favor the 3PL, not you. Each performance standard should include both measurement methodology and specific remedies for non-compliance.
Map your order flow patterns
Many 3PL transitions fail because the new provider isn’t prepared for your unique order patterns. Without this critical intelligence, your new partner will struggle to properly staff, allocate space, and manage resources for your account—leading to shipping delays, missed cutoff times, and frustrated customers.
Giving your new 3PL an expectation of your order flow will help them minimize order fulfillment disruptions straight out of the gate.
Donovan Sullivan
Operations Manager
NFI
Analyze your historical data
Daily order distribution: Determine which days consistently see the highest volume (typically Mondays for many ecommerce businesses) and which days remain relatively quiet. This helps your new 3PL schedule appropriate staffing throughout the week.
Hourly order concentration: Track when orders arrive throughout the day to identify rush periods. If 40% of your daily orders arrive after 2 PM, your 3PL needs to know this to meet same-day shipping cutoffs and properly distribute picking waves.
Seasonal variation: Document your peak seasons, holiday spikes, and promotional periods with specific volume increases. For example, “November-December orders increase 300% over baseline with Black Friday week seeing 5x normal volume.”
This intelligence helps your new fulfillment center properly staff and resource your account from day one, preventing the service disruptions that often accompany transitions.
PRO TIP: Some 3PLs will be able to take your raw order data and generate these insights themselves. However, it doesn’t hurt to prepare them ahead of time.
Verify technical compatibility requirements
Technical integration issues derail more 3PL transitions than any other factor. Document your current systems and integration requirements thoroughly before evaluating potential providers.
Critical technology checkpoints:
Warehouse Management System (WMS) capabilities and limitations
Direct integration with your ecommerce platform(s) for your online store
ERP/accounting system compatibility
Real-time inventory visibility mechanisms
Order status and tracking capabilities
API/EDI specifications and documentation
Data security protocols and compliance
PRO TIP: Request technical documentation from potential 3PLs and have your IT team or developer review it before proceeding. Most 3PLs claim “seamless integration” with all platforms, but the reality is often more complex and limited.
Project capacity needs based on growth forecasts
Your next 3PL must accommodate not just your current business operations, but your future expansion as well. Map your growth trajectory with concrete metrics that potential providers can evaluate.
Essential growth projections to document:
Warehouse Management System (WMS) capabilities and limitations
Quarterly order volume projections
Geographic distribution of future customers
Seasonal inventory fluctuations
New sales channel additions (marketplace expansions, wholesale, etc.)
Upcoming product launches or line extensions
Evaluate 3PL fulfillment centers against your growth plans. The ideal solution typically balances minimizing shipping costs (through strategic warehouse locations) with simplifying inventory management (by using fewer facilities).
NOTE: While distributing inventory across many warehouses can reduce shipping costs and delivery times, it also increases complexity and potential for errors.
For many growing ecommerce businesses, a single optimally-located fulfillment center or a two-warehouse solution offers the best balance of efficiency and manageability.
Decode contract traps to avoid expensive exit penalties
03
Overlooked contract clauses can cost you tens of thousands of dollars when leaving your current 3PL. A thorough contract review protects your inventory and prevents unexpected financial liabilities.
Before giving notice, carefully review your existing contract to determine your obligations if you choose to end the contract early or at the end of its term. Failure to do so could result in hefty fees. Case in point: A 3PL customer in Memphis, TN, didn’t identify their obligations beforehand and was stuck paying a year’s worth of minimum order and minimum storage charges.
Donovan Sullivan
Operations Manager
NFI
WARNING: Engage legal counsel before taking any action. Have an attorney review both your current contract and any potential new agreements to identify exit requirements and financial exposure.
Six critical contract clauses to examine
01
Termination notice & auto-renewal terms
Most 3PL agreements automatically renew unless you provide written notice 60-90 days before the term ends. Mark these deadline dates on your calendar and set multiple reminders. Submit termination notices exactly as specified in your contract—many require certified mail or specific email addresses.
02
Early termination penalties
Exiting mid-contract typically triggers financial penalties. These often include:
Payment of all remaining monthly minimums
Lump sum termination fees
Accelerated payment of outstanding balances
Calculate these potential costs and factor them into your transition budget.
03
Inventory lien provisions
3PLs commonly assert a warehouseman’s lien on your inventory until all outstanding invoices are paid. This means they can legally hold your products hostage until you settle all balances.
Plan for immediate payment of final invoices to secure prompt inventory release.
04
Performance-based exit clauses
Some contracts include termination rights for consistent service failures. Document all performance issues thoroughly if you plan to invoke these clauses. Be prepared to:
Show proof of repeated service failures
Demonstrate you provided notice of problems
Verify the 3PL had reasonable time to correct issues
Consult legal counsel before claiming breach of contract
05
Asset return procedures
Contracts specify how inventory transfers occur and what fees apply. Identify:
Handling or transfer charges for shipping inventory removal
Packaging material buyback requirements
Disposal fees for unused custom materials
Timeline requirements for inventory removal
Request a written exit procedure from your current provider to avoid surprises.
06
Data ownership specifications
Maintain control of your business intelligence by confirming:
Order history and customer data remains accessible to you
Requirements for data transfer to your new provider
Return procedures for any licensed software or equipment
Timeframe for system access termination
PRO TIP: Strategic timing is essential when notifying your current provider. Secure your new 3PL partner first, then provide contractually required notice to your existing provider. Premature notification often leads to declining service quality during your remaining contract period.
With contract obligations clearly understood, you can develop a realistic transition timeline and budget. These insights provide the foundation for selecting your next 3PL partner without risking costly surprises or service disruptions.
Select a 3PL partner that guarantees your future success
04
Your 3PL selection determines whether your supply chain becomes a competitive advantage or an operational liability. Execute these four validation steps to identify a partner who will deliver on their promises rather than just their sales pitch.
Verify capabilities through targeted requirements assessment
Begin with a formal capabilities assessment that matches your specific needs against each potential provider’s core competencies.
Finding a 3PL that can meet your needs from a cost or order volume perspective is critical. If you have specialized SKUs like oversized or refrigerated items, finding a provider that specializes in your market might also be necessary.
Donovan Sullivan
Operations Manager
NFI
Create a requirements scorecard covering these critical categories:
Expertise with your product type (heavy, fragile, regulated, etc.)
Order volume capacity (daily, seasonal peaks)
Specialized services (kitting, FBA prep, customization)
Technology compatibility (WMS, integrations, reporting)
Geographic coverage (warehouse locations, shipping reach)
Business stability (years in operation, client retention)
PRO TIP: Trust your instincts during provider interactions. A 3PL that demonstrates poor communication, delays responses, or shows disorganization during the sales process will likely exhibit these same issues during your partnership.
Inspect facilities to witness operational reality
Marketing materials tell half-truths. Physical facility tours reveal operational reality.
On-site tours let you assess the 3PL’s facilities and operations firsthand, and can reveal the actual capabilities and limitations of the 3PL that may not be evident through marketing materials or phone conversations.
Justin Loftis
Director of Client Success Red Stag Fulfillment
During facility visits, look beyond the obvious:
Observe staff engagement and expertise, not just management presentations
Request to see the actual receiving, picking, and packing processes
Examine inventory organization methods and accuracy controls
Check storage conditions relevant to your products
Ask to meet your potential account representative and support team
Request to see other products similar to yours being processed
If geography prevents in-person visits, request a live video tour rather than settling for promotional videos.
Test performance with a trial shipment
Documentation and discussions can’t predict real-world performance. Only actual testing reveals operational truth.
Unless your contract precludes it, send a test container to your potential new fulfillment center before committing. Often, your current provider doesn’t need to know about this test run.
Ryan Marine
Director of Sales
Red Stag Fulfillment
A limited test shipment allows you to evaluate:
Communication quality throughout the receiving process
Time from dock to stock availability
Inventory accuracy and processing attention to detail
Order processing speed and accuracy
Packaging quality and damage prevention
Documentation completeness and correctness
Tracking information timeliness and accuracy
Prepare for your 3PL selection with our comprehensive guide on choosing a 3PL.
Compare total cost impact through comprehensive analysis
Create a standardized cost comparison that evaluates total impact, not just line-item prices.
Rather than falling for misleading rate comparisons, build a comprehensive annual cost projection:
Create a standardized inventory and order volume scenario
Apply each provider’s complete rate card to this scenario
Include all fees (receiving, storage, pick/pack, shipping, returns)
Calculate projected annual costs with seasonal variations
Factor in projected growth and potential price increases
Estimate the financial impact of service guarantees and error rates
WARNING: The cheapest provider on paper often becomes the most expensive in practice when service failures, inventory shrinkage, and management overhead are factored in.
Secure your interests during contract negotiation
After selecting your preferred provider, negotiate comprehensive agreements that protect your business.
Key agreements to establish:
Statement of Work (SOW)
The SOW defines your specific requirements and the 3PL’s agreed deliverables. Review this document meticulously—anything not explicitly included can become an additional charge. Specify performance metrics (KPIs) with clear measurement methods and reporting timelines.
Service Level Agreement (SLA)
The SLA establishes performance standards and consequences for non-compliance. Define specific metrics for:
Order accuracy rates
On-time shipping percentages
Inventory shrinkage allowances
Receiving timeframes
Response times for issues
Best shared early and often, the SLA requirements you expect will likely not be met right away. Planning for a 30- or 60-day ramp-up period where performance against SLA is measured but not penalized can help manage expectations on both sides of the relationship.
Donovan Sullivan
Operations Manager
NFI
With your new 3PL partner selected and agreements signed, you’re ready to develop your detailed transition plan.
Phase 2: Plan and test your transition
Develop a detailed transition plan that prevents fulfillment disruptions
05
A detailed transition plan prevents costly service gaps and protects your customer experience during the switch. Break your migration into manageable phases with clear ownership, deadlines, and checkpoints to maintain control throughout the process.
Build a realistic timeline with adequate overlap
The most common cause of 3PL transition failure is unrealistic timeline expectations. Successful migrations require meticulous planning and deliberate pacing to prevent inventory gaps, shipping delays, and customer service nightmares.
Remember, most 3PL transitions take 30-90 days to execute properly, with the timeline varying based on your order volume, inventory complexity, and technical integration requirements.
Schedule your transition during lower-volume periods. February-March or August-September typically offer ideal windows with moderate volume and distance from major sales events.
Target the beginning of a quarter or year when possible. This timing simplifies accounting, inventory reconciliation, and performance reporting.
Avoid holiday proximity by keeping transitions at least 60-90 days away from your peak season. Working with a struggling provider is preferable to risking catastrophic disruptions during your most profitable selling period.
Plan for 2-4 weeks of overlap where both 3PLs operate simultaneously. This dual-operation period allows you to test systems with real orders and systematically transfer inventory while maintaining availability.
Include buffer days between major milestones to absorb unexpected delays. Adding 2-3 business days between critical activities prevents cascading timeline failures when individual steps take longer than anticipated.
Establish weekly checkpoints. Regular review meetings with all stakeholders help identify emerging risks early.
WARNING: Rushing a 3PL transition to save on overlap costs often creates service failures that damage customer relationships and brand reputation—ultimately costing far more than the temporary dual-provider expense.
Secure your inventory during the physical transfer
Inventory loss during transition represents one of the most common and costly risks when switching 3PLs. Protect your assets with rigorous documentation and verification:
Not all 3PLs will treat your inventory with care once they know you’re leaving. Make sure your new 3PL receives every piece of inventory you’re expecting them to receive.
For example, if you’re switching to Red Stag, we barcode all incoming inventory to verify it matches your expected counts. If we don’t receive all your inventory, we’ll immediately alert you to follow up with your old fulfillment center.
Tyler Sellers
Director of Operations
Red Stag Fulfillment
Critical inventory protection steps include:
Document your expected inventory counts with SKU-level detail before notifying your current provider
Schedule specific pickup and receiving dates with both providers
Require verification scans at both departure and arrival
Conduct immediate reconciliation of any count discrepancies
Photograph condition of received inventory if product damage is a concern
Implement a phased migration to minimize risk
A staged approach to transferring order volume creates a controlled testing environment while maintaining service continuity. This three-phase method has proven most effective for successful transitions:
Phase 1: Pilot testing
This controlled testing phase reveals integration issues and operational gaps before they can impact your broader customer base.
Route 5-10% of orders to your new 3PL
Select one sales channel or region to test
Verify all KPIs are met before proceeding
Focus on identifying and fixing operational issues at small scale
Phase 2: Dual fulfillment
Operating both fulfillment centers simultaneously creates a safety net that protects your customer experience while validating the new 3PL’s processes.
Run both 3PLs concurrently for core operations
Maintain daily communication between all parties
Create backup capacity in case issues arise with either provider
Volume transfer
A measured transfer of inventory ensures your new 3PL can maintain quality and consistency as volume increases, preventing the common mistake of transitioning too quickly.
Gradually increase new 3PL volume as performance is verified
Pause volume transfer if error rates spike
Resolve all operational issues before adding more volume
How Red Stag addresses common transition challenges
| 3PL transition challenge |
Potential risk | Red Stag solution | Your benefit |
|---|---|---|---|
| Inventory transfer | Careless handling once old 3PL knows you’re leaving | Comprehensive barcode verification system | Complete inventory accountability during transition |
| Inventory count accuracy | Receiving fewer items than expected | All incoming inventory barcoded and verified against expected counts | Precise matching of received vs. expected inventory |
| Discrepancy resolution | Undetected loss of valuable inventory | Immediate alerts for any inventory discrepancies | Quick follow-up with previous 3PL before issues compound |
| Transition management | Complex logistics coordination between providers | Structured receiving process with verification checkpoints | Peace of mind during critical business transition period |
PRO TIP: Test edge cases early with your new 3PL. Send international orders, oversized items, gift orders, and returns during the pilot phase. It’s better to discover processing issues when only handling a small volume rather than after fully transitioning the entire operation.
Create specific contingency plans for common failure points
Don’t leave your ability to ship orders to chance. Develop targeted contingency plans for these common transition challenges:
Integration failures: Create manual ordering procedures if system connections fail
Inventory delays: Establish emergency replenishment options from manufacturers
Service degradation: Define triggers for pausing additional volume transfer
Customer service backlogs: Prepare templated communications for common issues
Transportation disruptions: Identify backup carriers and expedited shipping options
Documenting these contingency options ensures you can react immediately to problems rather than scrambling for solutions during a crisis.
Establish clear communication channels with all stakeholders
Proactive communication prevents confusion and builds confidence during your transition. Develop dedicated communication plans for each key stakeholder group:
Proactive messaging, especially if transportation timelines are changing, can significantly reduce disruption for everyone involved. This includes both large client accounts and guidance for your front-line customer service staff.
Donovan Sullivan
Operations Manager
NFI
Internal teams
Your team needs specific operational details and timeline updates to maintain service levels and properly set customer expectations during the transition period. Create detailed documentation for:
New workflows and system access
Changed responsibilities
Updated tracking and reporting methods
Contact information for new 3PL representatives
Training schedule for new systems
Customers
Tell customers exactly how fulfillment changes will affect their orders to reduce support tickets and prevent cancellations during your transition. Communicate these essential details:
Any potential delivery timeline changes
New tracking information formats
Updated return procedures
Suppliers
Provide suppliers with exact shipping instructions and dates to prevent inventory delays and ensure products arrive at the correct warehouse on time. Send documentation with:
New shipping addresses and receiving hours
Updated routing guides and freight forwarding instructions
Changed documentation requirements
Transition dates for redirecting inventory
NOTE: Regular status meetings during the transition (daily for the first week, then weekly) help address emerging issues quickly and keep all stakeholders aligned on progress and upcoming milestones.
Test and verify all technical systems before full migration
Technical failures derail more 3PL transitions than any other factor. Verify complete system compatibility before transferring significant order volume:
Migrate all critical data to the new 3PL’s systems, including:
Complete product information (weights, dimensions, packaging requirements)
Accurate inventory counts
Order history for context
Customer shipping preferences
Thoroughly test integration points:
Place test orders through each sales channel
Verify inventory syncing in both directions
Confirm shipping label generation
Test order cancellation and modification workflows
Validate return processing procedures
Establish procedures for handling in-transit orders:
Clear ownership for backorders and pre-orders when you need to reorder inventory
Protocol for returns received during transition
Process for order status inquiries during overlap period
Gaining early access to your new 3PL’s reporting tools allows your team to become familiar with the new system before relying on them for critical business operations.
Phase 3: Optimize your new partnership
Transform your 3PL switch into a long-term competitive advantage
06
Successfully transitioning to your new 3PL marks the beginning—not the end—of your fulfillment transformation. The first 60-90 days after migration establish the foundation for your ongoing partnership and determine whether your investment delivers the expected returns.
Implement a data-driven monitoring system
Rigorous performance tracking during the initial months reveals whether your new 3PL is delivering on their promises and helps identify optimization opportunities before they affect your customers. Here’s what you should look for:
| Essential KPI | What to monitor | Why it matters |
|---|---|---|
| Order accuracy | % of orders without errors | Directly impacts customer satisfaction and return costs |
| On-time shipping | % of orders meeting same-day cutoff | Affects delivery promises and customer experience |
| Inventory accuracy | Variance between system and physical counts | Prevents stockouts and overstock situations |
| Receiving timeline | Days from arrival to inventory availability | Ensures product availability for sale |
| Customer complaints | % of orders generating service tickets | Early indicator of fulfillment issues |
Compare these metrics against your previous 3PL’s performance to identify improvements or regressions. While a minor efficiency dip during the first 2-3 weeks is normal as workflows stabilize, any persistent performance issues demand immediate attention.
NOTE: Schedule daily performance reviews during the first two weeks, then transition to weekly meetings as operations stabilize. Document all discussions and maintain a running list of action items to ensure accountability on both sides.
Establish active customer feedback channels
Your customers will notice changes in your fulfillment operations—often before your metrics show problems. Create systems to capture and analyze their feedback:
Deploy post-purchase satisfaction surveys focused on delivery experience
Create specific customer service tags for fulfillment-related issues
Monitor social media mentions related to order delivery
Track changes in product reviews mentioning packaging or shipping
Compare return rates before and after transition
WARNING: An increase in specific complaints like “received wrong item” or “package damaged” often signals systemic issues that require immediate intervention. Set up alert thresholds that make sense for your business and create escalation protocols for these high-impact problems.
Verify fulfillment quality through systematic testing
Data tells only part of the story. Direct observation reveals quality issues that numbers might miss:
Mystery shopper program: Place regular test orders across different product categories and shipping destinations to evaluate consistency
Packaging audits: Request photos of packaged orders or samples of shipping materials to verify presentation quality
Facility visits: If geographically possible, conduct unannounced warehouse visits to observe actual operations
Video reviews: Request recorded walkthroughs of picking, packing, and shipping processes
Returns inspection: Examine returned items to identify potential packaging failures or damage patterns
PRO TIP: Test your new 3PL’s responsiveness by occasionally placing rush orders or making special packaging requests. Their handling of these exceptions often reveals their true service commitment better than routine operations.
Build a continuous improvement partnership
The most successful 3PL relationships evolve beyond vendor-client interactions into strategic partnerships. Establish frameworks for ongoing optimization:
It’s fairly common in the 3PL industry to take on contracts for 3 to 5 years at a time. During this time, your business will not be stagnant, and your future growth plans should include your new partner. They should be not just a provider but a strategic ally in your success.
Donovan Sullivan
Operations Manager
NFI
Essential partnership development activities:
Quarterly business reviews: Evaluate performance, discuss upcoming initiatives, and align strategic goals
Shared improvement projects: Identify opportunities to reduce costs or improve service through collaborative optimization
Growth planning: Include your 3PL in expansion discussions early to ensure fulfillment capability aligns with business goals
Technology roadmap: Develop a joint plan for system enhancements and integration improvements
Cost reduction initiatives: Establish shared targets for reducing fulfillment costs while maintaining service levels
Formalize account management expectations
A structured account management framework prevents service degradation over time. Document expectations for:
Designated primary and backup contacts for different issue types
Response times for various request categories
Regular meeting cadence and required attendees
Report delivery schedules and formats
Escalation procedures for unresolved problems
Executive sponsor relationships
Creating this structure ensures your needs receive consistent attention even as your 3PL grows and adds other clients.
Leverage your new 3PL’s expertise
Beyond basic fulfillment services, leading fulfillment providers offer valuable insights that can drive broader business improvements:
Inventory management recommendations to reduce carrying costs
Packaging improvements that reduce dimensional weight charges
Carrier mix adjustments to balance service and cost
Demand forecasting assistance for better inventory planning
Returns management strategies to recapture lost value
The best 3PL partnerships go far beyond picking and packing. Look for ways your 3PL can help improve performance across your entire supply chain.
Tony Runyan
Chief Client Officer
Red Stag Fulfillment
By implementing a rigorous optimization program during the first 90 days, you transform your 3PL switch from a tactical change into a strategic advantage that delivers ongoing value to your business and customers.
Calculate what your current 3PL is really costing you
Every day with a problematic fulfillment partner drains your business in measurable ways:
Revenue evaporates when shipping deadlines slip
Marketing costs increase to replace customers lost due to fulfillment problems
Management spends valuable time solving logistics problems instead of growing sales
Star ratings plummet when customers vent about delivery issues on social platforms
The math is simple: switching costs hurt once, but staying with the wrong partner bleeds you daily.
Guarantees that eliminate these costly fulfillment problems
Red Stag backs every service with contractual guarantees that align our success with yours:
Same-day shipping: Orders received by 5pm ship the same day, guaranteed
100% order accuracy: Financial compensation for any picking or packing errors
Zero inventory shrinkage: Full reimbursement for any lost or damaged inventory
These aren’t aspirational goals—they’re contractual obligations that protect your business from the most common fulfillment failures.
After switching to Red Stag, I spend about an hour each week on routine fulfillment tasks. At my old fulfillment center, I was spending more than 10 hours a week dealing with fulfillment issues. Now I can focus on growing the business instead of babysitting operations.
Sarah K
Founder
Bare Nut Butter
These guarantees directly address the most common problems that drive ecommerce businesses to switch 3PLs in the first place.
See if we’re a good fit for your business
We’re selective, which means we don’t serve every business. Our specialized fulfillment services work best for companies with specific needs, particularly those shipping heavy, bulky, or high-volume products.
Tell us about your fulfillment requirements, and we’ll determine if Red Stag can transform your operations. If we’re not the ideal partner, we’ll tell you directly and recommend alternatives better suited to your business.
