Switching 3PLs without a clear plan leads to stockouts, delayed orders, and customer churn—mistakes that cost brands tens of thousands of dollars during transition. This guide breaks down exactly how to switch 3PL providers without disrupting your operations, based on frameworks used in 200+ successful transitions.
We consulted four fulfillment leaders with 20+ combined years managing 3PL transitions:
Tony Runyan, Chief Client Officer, Red Stag Fulfillment
Ryan Marine, Director of Sales, Red Stag Fulfillment
Justin Loftis, Director of Facilities, Safety, and Security, Red Stag Fulfillment
Donovan Sullivan, Operations Manager, NFI
Their insights shaped a three-phase framework: prepare your exit (financials, requirements, contracts, and 3PL selection), execute a controlled migration with built-in testing, and optimize performance once you’re live. But first—7 warning signs that confirm it’s time to make the switch.
7 definitive signs it’s time to switch 3PL providers
Knowing when to switch 3PLs matters as much as knowing how. These seven warning signs—backed by operators who’ve managed hundreds of transitions—tell you it’s time to start looking.
Catching these signals early prevents the revenue loss and reputation damage that compound the longer you stay.
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 fulfillment operation has become a liability. Every 3PL makes occasional errors—the difference is frequency and response. A provider averaging 1-2% error rates with documented root-cause analysis is operating normally. A provider hitting 3%+ errors with no corrective action plan is costing you customers.
Time to switch when:
Error rates exceed 2% and your 3PL can’t explain why—or won’t commit to a fix timeline.
Your 3PL fails to provide documented corrective actions after repeated issues.
You’re discovering problems before your 3PL flags 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
Customers set delivery expectations based on your first few orders. When ship times swing from 1 day to 5 days with no warning, you generate support tickets, negative reviews, and churn—problems that cost far more than the fulfillment itself.
Time to switch when:
Ship-time variance exceeds 48 hours week-over-week with no explanation from your 3PL.
Late deliveries drive 5%+ of your customer service tickets.
Your 3PL misses same-day cutoff times more than once per week.
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.
Tony Runyan
Chief Client Officer
Red Stag Fulfillment
Unresponsive customer service
03
When fulfillment issues arise, response time determines whether you lose one order or one hundred. A 3PL that takes days to reply (or ghosts you entirely) turns small problems into customer service crises.
Time to switch when:
Support requests take more than 24 hours for acknowledgment, or urgent issues sit unanswered for 4+ hours.
You’ve had 3+ account managers in 12 months, each starting from scratch.
Routine issues (tracking updates, inventory questions) require escalation to get any response.
Rising costs without improved service
04
Fulfillment costs rise over time since naturally carrier rates increase and labor costs climb. But when your invoice jumps 10% and your error rate stays the same (or worsens), you’re subsidizing your 3PL’s inefficiency.
Time to switch when:
Annual cost increases exceed 5-10% with no corresponding service improvements or transparent justification.
Surprise fees appear on invoices—peak season surcharges, “special handling,” storage overages—that weren’t in your original agreement.
Your 3PL can’t provide a line-item breakdown explaining where the increases come from.
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
You can’t manage what you can’t see. When your 3PL’s systems lag 24 hours behind reality—or require manual workarounds—you’re making inventory and marketing decisions based on bad data. That leads to oversells, stockouts, and wasted ad spend.
Time to switch when:
You lack real-time visibility into inventory counts and order status—or “real-time” means updated once per day.
Integration failures force you to manually upload orders, creating lag time and data entry errors.
Your 3PL has declined or delayed system upgrades for 6+ months.
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 Facilities, Safety, and Security
Red Stag Fulfillment
Geographic limitations hindering growth
06
Shipping zone costs compound fast. If 40% of your customers now live in zones 5-8 from your 3PL’s warehouse, you’re paying $3-6 more per package than you would with better positioning—and losing 1-2 days of transit time that kills conversion.
Time to switch when:
Your customer distribution has shifted and 30%+ of orders now ship to zones 5+ from your fulfillment center.
Zone-based surcharges have increased your average shipping cost by 15%+ over the past year.
Your 3PL can’t support new sales channels or regions you’re expanding into.
NOTE: More warehouses doesn’t mean better fulfillment. A strategically positioned two-location network beats a 12-warehouse sprawl if you can’t profitably split inventory across all sites. 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
Growth should strain your marketing budget, not your warehouse. When you’re turning down wholesale opportunities or delaying product launches because your 3PL can’t handle the volume, fulfillment has become the ceiling on your business.
Time to switch when:
Your 3PL missed SLAs during last peak season—or warned you they couldn’t guarantee capacity.
You’ve been told there’s no room for additional SKUs or inventory depth.
You’ve delayed launching a new sales channel (Amazon, wholesale, retail) because your 3PL can’t support the requirements.
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, start your transition now. Even a well-planned switch takes 30-90 days—and every week you wait compounds the damage.
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 framework below shows you exactly how to switch 3PLs without disrupting operations—from preparing your exit to optimizing your new partnership.
How to switch 3PLs: A strategic three-phase approach
Most 3PL transitions fail because brands rush the process or skip critical steps. This framework breaks the switch into three phases designed to prevent the most common mistakes—missed contract deadlines, inventory gaps, and integration failures.
The three-phase transition framework
Phase 1: Prepare to leave your current provider. Document your true fulfillment costs, map your operational requirements, identify contract exit obligations, and select a new 3PL that fits. This phase typically takes 2-6 weeks and determines whether your transition runs smoothly or creates chaos.
Phase 2: Plan and test your transition. Build a migration timeline, communicate changes to internal teams and customers, and run pilot shipments before going fully live. Expect 2-6 weeks depending on inventory complexity and integration requirements.
Phase 3: Optimize your new partnership. Track KPIs against your old provider’s performance, establish regular business reviews, and build a continuous improvement cadence. The first 60-90 days set the tone for the entire relationship.
The sections below walk through each phase in detail—with specific checklists, timelines, and questions to ask at every stage.
Phase 1: Prepare to leave your current provider
Determine your fulfillment cost ceiling and transition readiness
01
Before you talk to a single prospective 3PL, know exactly what you’re spending now—and what you can afford to spend. Brands that skip this step either overpay for their new provider or choose one they can’t actually afford to transition to.
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
Your current fulfillment spend sets the baseline for every comparison you’ll make. Before reaching out to new providers, document:
Your total monthly invoice from your current 3PL (not just line items—the actual bottom-line number)
One-time transition costs you can absorb (onboarding fees, integration work, potential sales dips during cutover)
The internal business case you’ll need to justify the switch to leadership or investors
The only number that matters for comparison is your total monthly cost. Line-item pricing is a distraction—more on that below.
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
Line-item comparisons between 3PLs are a trap. Here’s why:
Provider A charges $0.50/pick but $45/pallet/month for storage. Provider B charges $0.75/pick but $25/pallet. Without modeling your actual volume, you can’t tell which is cheaper.
Some 3PLs discount visible line items (pick fees, shipping) while padding margins on less-scrutinized charges (receiving, storage, materials).
The only apples-to-apples comparison: run identical order volume through each provider’s rate card and compare total monthly cost.
WARNING: Don’t let a 3PL sales rep walk you through a line-item comparison against your current provider. Build your own model using your actual order volume and SKU mix. The bottom-line monthly total is the only number that matters.
Look beyond the visible costs
The cheapest 3PL on paper becomes the most expensive in practice when you factor in three cost dimensions:
Direct costs: Your monthly invoice—pick/pack, storage, shipping, receiving, materials.
Hidden costs: Fees that surface months into the relationship. Examples: peak season surcharges buried in contract appendices, “special handling” charges for items over 10 lbs, receiving fees for pallets that aren’t perfectly stacked.
Operational impact costs: The financial damage from poor performance—shrinkage, mis-ships, late deliveries, and the customer service labor required to fix them. A 3PL with 97% accuracy instead of 99.5% generates 5x more errors. At $20/error in re-shipping and support time, that’s thousands per month in invisible cost.
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
Switching 3PLs requires cash on hand beyond your normal fulfillment spend. Budget for:
Overlap period: 30-90 days of paying two 3PLs simultaneously while inventory transfers and integrations go live.
One-time transition costs: Onboarding fees ($1,000-10,000 depending on complexity), integration development, and potential expedited freight to move inventory.
Early termination fees: If you’re breaking a contract early, calculate the penalty now—some agreements require paying out remaining monthly minimums.
Revenue buffer: Model a 5-10% sales dip during transition week in case integration hiccups delay shipments.
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
With your current costs and transition budget documented, establish your hard limits:
Monthly ceiling: The maximum you’ll pay for fulfillment, including a buffer for volume growth. If you’re at $50K/month now, is $55K acceptable for better service? $60K?
Transition ROI threshold: What improvement justifies the switch? A 10% cost reduction? 50% fewer errors? Faster shipping? Define the win condition.
Payback period: If transition costs $20K, how many months until better service or lower costs cover that investment?
Rock-bottom pricing is a red flag, not a feature. A 3PL undercutting the market by 30% is cutting corners somewhere—usually accuracy, speed, or support responsiveness.
Define your operational requirements blueprint
02
With your budget set, document exactly what you need from a 3PL. This requirements list becomes your scorecard for evaluating providers—and the foundation for your contract negotiations.
Document your core business requirements
Start with the non-negotiables—any 3PL that can’t meet these is immediately disqualified:
Volume and capacity needs:
Total monthly order volume (average + peak). If you ship 5,000 orders/month but hit 15,000 in Q4, both numbers matter.
Inventory storage requirements in pallets or cubic feet—including buffer for new product launches.
Special handling: oversized items (dimensions/weight), temperature control, hazmat, or fragile packaging requirements.
Performance requirements:
Order accuracy target (99%+ is table stakes; 99.5%+ with financial guarantees is the goal)
Shipping timeframes: same-day cutoff time, expected days-to-deliver by zone
Real-time inventory visibility: how current is “current”? Hourly? Daily?
Returns processing SLA: turnaround time from receipt to restocked/refunded
If a provider can’t hit these minimums, pricing doesn’t matter.
Establish measurable service standards
Vague service promises lead to finger-pointing when things go wrong. Define concrete, measurable standards now—they become your leverage in contract negotiations and your recourse when performance slips.
Document core fulfillment services
For each service below, specify what “good” looks like—not just that you need it:
Order fulfillment: Processing cutoff time (e.g., orders before 2pm ship same day), packaging specs (branded boxes? inserts?), carrier selection rules (cheapest? fastest? by zone?).
Ecommerce platform integration: Direct API vs. middleware, order sync frequency (real-time vs. batched), inventory update intervals. If sync delays cause oversells, that’s a dealbreaker.
Omnichannel distribution: Marketplace-specific requirements (Amazon labeling, Walmart packaging), retail compliance (EDI, routing guides), channel-level inventory allocation.
Inventory management: Cycle count frequency (daily, weekly, monthly?), annual physical inventory expectations, and reconciliation process when counts don’t match.
FBA prep: Labeling standards (FNSKU, suffocation warnings), poly bagging requirements, shipment creation workflow, and turnaround time from receipt to Amazon-ready.
Inventory planning and forecasting: Reporting cadence, reorder point alerts, allocation recommendations, and demand forecasting support.
Define specialized requirements
If your products fall into any of these categories, generic fulfillment won’t cut it:
Kitting and assembly: Component storage, assembly instructions, QC checkpoints, throughput times. A 3PL unfamiliar with kitting will bottleneck during promos and bundles.
Big, heavy, & bulky fulfillment: Forklift requirements, weight limits per station, LTL/freight carrier relationships, dimensional packaging. Not every warehouse can handle a 75-lb item.
Fragile product packaging: Protective materials, void fill standards, drop-test protocols. If your damage claim rate exceeds 1%, your 3PL is costing you money.
Regulatory compliance (FDA, hazmat): Lot tracking, expiration date management, storage temperature requirements, shipping documentation. Non-compliance isn’t just expensive—it’s a legal liability.
Rather than accepting general service promises, establish concrete metrics for your Service Level Agreement (SLA). Specify:
Create concrete SLA metrics
General promises like “high accuracy” and “fast shipping” are unenforceable. Demand specifics:
Maximum acceptable error rate: 99.5% accuracy minimum. Best-in-class providers guarantee 100% accuracy with $50+ credits per error. If they won’t put penalties in writing, expect problems.
Inventory shrinkage allowance: Zero tolerance is the standard among top 3PLs—full reimbursement for any lost or damaged inventory. Anything above 0.1% annual shrinkage is a red flag.
Order processing timeframes: Same-day shipping for orders received by [specific cutoff, e.g., 2pm local]. Define weekend handling (Saturday shipping? Sunday?) and holiday blackout expectations.
Receiving timeframes: Inventory available for sale within 48 hours of arrival. Some 3PLs commit to 24 hours. If receiving takes a week, you’re losing sales.
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 in the first 30 days because the new provider isn’t staffed for your order patterns. A 3PL expecting steady volume across the week will miss SLAs when 40% of your orders land on Monday.
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: Which days spike? Many ecommerce brands see Monday volume 30-50% higher than midweek. If your 3PL staffs evenly across the week, Monday orders miss cutoff.
Hourly order concentration: When do orders cluster? If 40% arrive after 2pm, your 3PL needs to know—otherwise they’ll schedule picking waves that miss same-day cutoff.
Seasonal variation: Quantify your peaks. “Q4 runs 300% above baseline, with Black Friday week at 5x normal volume” is actionable. “We get busy around the holidays” is not.
Share this data during onboarding. A 3PL that understands your order patterns will staff correctly from day one instead of scrambling through your first peak.
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:
WMS compatibility: Does their system support your SKU complexity? Lot tracking? Expiration dates? Serial numbers? Ask for a capabilities list, not just a demo.
Ecommerce platform integration: Native connector or middleware required? Shopify and WooCommerce are usually straightforward; custom platforms or ERP-first setups need scrutiny.
ERP/accounting sync: Can their system push order and inventory data to your accounting platform? In what format? How often?
Real-time inventory visibility: What does “real-time” mean—updated every hour? Every 15 minutes? On every scan? Delayed visibility causes oversells.
Order status and tracking: Can customers get tracking updates automatically? Does their system push to your platform or require manual export?
API/EDI specs: If you need custom integrations, request their API documentation upfront. No documentation = no custom work.
Data security: SOC 2 compliance? How is customer PII handled? Where is data stored? This matters for GDPR and CCPA.
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
A 3PL that fits today but can’t handle next year’s volume forces another transition in 12 months. Project your growth with specific numbers so providers can confirm capacity—or disqualify themselves.
Essential growth projections to document:
Quarterly order volume projections: Where will you be in 12 months? 24 months? If you’re at 5,000 orders/month now and projecting 15,000 by next Q4, your 3PL needs to confirm they can scale with you.
Geographic distribution shifts: Is your customer base moving? Expanding into new regions? If 30% of future customers will be on the West Coast, a single East Coast warehouse may not cut it.
Seasonal inventory fluctuations: How much buffer space do you need for pre-peak inventory builds? If you 3x your stock in September, that storage capacity must exist.
New sales channel additions: Amazon, Walmart, Target+, wholesale, retail—each channel has different requirements. Confirm your 3PL can support them before you commit.
Upcoming product launches: New SKUs, new categories, oversized items, bundles. If you’re launching 50 new SKUs next year, make sure your 3PL can handle the catalog expansion.
Evaluate 3PL fulfillment centers against these projections. The right solution balances shipping cost (strategic warehouse locations) with operational simplicity (fewer facilities to manage).
NOTE: More warehouses reduces shipping zones but increases inventory complexity. Every location you add means splitting stock, managing transfers, and multiplying error potential.
For most growing ecommerce brands, a single optimally-located fulfillment center or a two-warehouse setup delivers the best balance of cost and manageability.
Decode contract traps to avoid expensive exit penalties
03
Overlooked contract clauses cost brands tens of thousands of dollars when leaving a 3PL. Review your current agreement before giving notice—or risk inventory holds, surprise fees, and legal exposure.
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 triggers financial penalties. Common structures include:
Payment of all remaining monthly minimums (if you’re 6 months into a 2-year contract with $10K minimums, that’s $180K exposure)
Lump sum termination fees (often 2-3 months of average billing)
Accelerated payment of outstanding balances
Calculate your exact exposure and factor it into your transition budget. Sometimes paying the penalty is still cheaper than staying.
03
Inventory lien provisions
Most 3PL contracts include a warehouseman’s lien—a legal right to hold your inventory until all invoices are paid. This isn’t a negotiating tactic; it’s enforceable.
Budget for immediate payment of your final invoice (often due within 7-15 days of termination notice). If cash flow is tight, negotiate payment terms before you give notice—not after.
04
Performance-based exit clauses
Some contracts allow penalty-free termination if the 3PL consistently fails to meet SLAs. To invoke these clauses, you’ll need documented proof:
Evidence of repeated service failures (error logs, shipping reports, customer complaints)
Written notice you provided to the 3PL about each issue
Proof the 3PL had reasonable time to correct (typically 30-60 days after notice)
Legal review before claiming breach—get this wrong and you’re liable for early termination fees
Start documenting now, even if you’re not sure you’ll use this exit path.
05
Asset return procedures
Your contract specifies how inventory transfers work and what fees apply. Before giving notice, identify:
Handling/transfer charges: Some 3PLs charge $2-5 per case to pull and palletize inventory for removal. On 1,000 cases, that’s $2,000-5,000 you didn’t budget for.
Packaging material buyback: If your 3PL purchased custom boxes or inserts, you may owe for unused stock.
Disposal fees: Unused custom materials you don’t buy back may incur disposal charges.
Removal timeline: Most contracts require inventory removal within 30-60 days of termination. Miss the deadline and storage fees continue—often at a premium rate.
Request a written exit procedure from your current provider before giving notice.
06
Data ownership specifications
Your order history and customer data belongs to you—but your contract may complicate access after termination. Confirm:
Data accessibility: Can you export full order history and customer records? In what format? Some 3PLs charge for data exports or limit access after termination.
Transfer requirements: What format does your new 3PL need? CSV? API access? Plan the handoff before you lose access.
Licensed software/equipment: If you’re using 3PL-provided hardware (scanners, printers) or software licenses, confirm return procedures and deadlines.
System access termination: When does your login get cut off? Make sure you’ve exported everything before that date.
PRO TIP: Timing matters. Secure your new 3PL partner and confirm their onboarding timeline before giving notice to your current provider. Premature notification frequently results in declining service quality—your current 3PL has little incentive to prioritize a departing client.
With your exit costs calculated and contract traps identified, you’re ready to evaluate new providers—starting with a structured selection process that separates real capabilities from sales promises.
Select a 3PL partner that fits—and verify before you commit
04
Every 3PL sounds great in a sales pitch. These four validation steps separate providers who can actually deliver from those who’ll overpromise and underperform.
Verify capabilities through targeted requirements assessment
Start by matching your requirements blueprint (from Step 02) against each provider’s actual capabilities—not their marketing claims.
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 scorecard covering these ten categories. For each provider, rate fit as strong/acceptable/weak:
Product type expertise: Have they handled your category before? Heavy/bulky, fragile, regulated, temperature-controlled? Ask for client references in your vertical.
Order volume capacity: Can they handle your daily average and your peak? Get specific confirmation on Black Friday/Cyber Monday capacity.
Specialized services: Kitting, FBA prep, customization, subscription box assembly—if you need it, confirm they’ve done it at scale.
Technology compatibility: Direct integration with your platform? Real-time inventory sync? API access for custom reporting?
Geographic coverage: Where are their warehouses relative to your customers? What’s the zone breakdown for your order distribution?
Business stability: How long in operation? Client retention rate? Ask for 3 references from brands your size.
Total monthly cost: Does the modeled cost fit your budget ceiling from Step 01? Don’t get seduced by low line-item rates—compare bottom-line totals.
SLA guarantees: Will they contractually commit to your accuracy, shipping, and shrinkage requirements? With financial penalties?
Contract flexibility: What happens if your volume drops? If you need to pause? If you get acquired? Understand exit and adjustment terms upfront.
Support responsiveness: During the sales process, how quickly did they respond? That’s the best service you’ll ever get from them.
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 Facilities, Safety, and Security
Red Stag Fulfillment
During facility visits, look beyond the polished tour:
Staff engagement: Are floor workers focused and efficient, or standing around? High turnover shows in disorganization and slow processes.
Live operations: Ask to watch actual receiving, picking, and packing—not a staged demo. How do they handle a mis-pick or damaged item?
Inventory organization: Is the warehouse clean and logically organized? Can staff quickly locate a random SKU?
Storage conditions: If you have temperature, humidity, or fragility requirements, verify the actual storage areas—not just the showroom.
Your actual team: Meet the account manager and support staff you’ll work with daily. The sales rep won’t be answering your emails post-launch.
Similar products: Ask to see how they handle products like yours. If they ship heavy/bulky items, watch that process specifically.
If geography prevents an in-person visit, request a live video walkthrough—not a produced marketing video. Ask them to show you specific areas in real-time.
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: Did they proactively update you during receiving, or did you have to chase them?
Dock-to-stock time: How many hours/days from delivery to inventory available for sale? Under 48 hours is the benchmark.
Inventory accuracy: Did received counts match your ship manifest exactly? Any discrepancies?
Order processing speed: How quickly did test orders ship after placement? Did they hit the same-day cutoff?
Packaging quality: Was the product protected appropriately? Any damage potential from inadequate void fill or box sizing?
Documentation accuracy: Were packing slips, invoices, and shipping labels correct?
Tracking timeliness: How quickly did tracking information appear? Was it accurate throughout transit?
Prepare for your 3PL selection with our comprehensive guide on choosing a 3PL.
Compare total cost impact through comprehensive analysis
Line-item rate comparisons are misleading. Build a total cost model instead:
Standardize your scenario: Use your actual monthly order volume, SKU count, and storage needs—not the 3PL’s example case.
Apply complete rate cards: Get every fee in writing. Receiving, storage, pick/pack, shipping, returns, materials, special handling.
Model the full year: Include seasonal spikes. A 3PL that looks cheap at 5,000 orders/month may have surge pricing at 15,000.
Project forward: Add your growth forecast and ask about annual price increase caps. A 3PL with 8% annual increases costs more in year 3 than one with 3% increases.
Quantify service risk: A 3PL with 97% accuracy and no guarantees will cost you more in re-ships and refunds than one charging 10% more with 99.5% accuracy and error credits.
WARNING: The cheapest provider on paper becomes the most expensive in practice once you factor in service failures, inventory shrinkage, and the management hours spent fixing problems.
Secure your interests during contract negotiation
Once you’ve selected a provider, lock in protections before signing. Two documents matter most: the Statement of Work (SOW) and the Service Level Agreement (SLA).
Key agreements to establish:
Statement of Work (SOW)
The SOW defines exactly what the 3PL will deliver and how performance gets measured. Review it line by line—anything not explicitly included can become an add-on charge later. Specify KPIs with clear measurement methods (how is accuracy calculated?) and reporting frequency (weekly? monthly?).
Service Level Agreement (SLA)
The SLA defines performance standards and what happens when the 3PL misses them. Get specific:
Order accuracy: Target 99.5%+ with financial credits per error ($25-50 per mis-ship is standard among top providers)
On-time shipping: 100% same-day for orders before cutoff, with credits for misses
Inventory shrinkage: Zero tolerance with full reimbursement for lost/damaged inventory
Receiving timeframes: Inventory available within 24-48 hours of dock receipt
Issue response times: Acknowledgment within 4 hours, resolution within 24-48 hours depending on severity
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 contracts signed, the real work begins: executing the transition without disrupting your customers.
Phase 2: Plan and test your transition
Develop a detailed transition plan that prevents fulfillment disruptions
05
Most 3PL transitions fail during execution, not planning. A detailed transition plan with specific owners, hard deadlines, and weekly checkpoints prevents the service gaps that damage customer relationships and tank your reviews.
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.
Establish weekly checkpoints. Regular review meetings with all stakeholders help identify emerging risks early.
Schedule during lower-volume periods. February-March or August-September work best—moderate volume and distance from major sales events.
Target quarter or year boundaries. Starting fresh simplifies accounting, inventory reconciliation, and performance baselining.
Stay 60-90 days away from peak season. A struggling 3PL is better than a mid-transition disaster during Black Friday. Never risk your most profitable period.
Plan 2-4 weeks of dual-provider overlap. Running both 3PLs simultaneously lets you test with real orders and transfer inventory without stockouts. Yes, you’ll pay double—it’s worth it.
Build buffer into every milestone. Add 2-3 business days between critical activities. When (not if) something takes longer than expected, you won’t cascade into a full timeline collapse.
Hold weekly checkpoint meetings. All stakeholders, standing agenda, documented action items. This is where you catch problems before they become crises.
WARNING: Rushing a transition to save on overlap costs creates service failures that damage customer relationships and brand reputation—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.
Tony Runyan
Chief Client Officer
Red Stag Fulfillment
Critical inventory protection steps:
Document expected counts at SKU level before giving notice. Your current 3PL has less incentive to be careful once they know you’re leaving. Have your baseline locked in.
Schedule specific pickup and receiving dates with both providers. Confirm in writing. Inventory sitting in limbo between warehouses can’t be sold.
Require verification scans at departure and arrival. Your old 3PL scans out; your new 3PL scans in. Discrepancies surface immediately.
Reconcile count discrepancies within 24 hours. The longer you wait, the harder it is to recover missing inventory or get credits.
Photograph received inventory condition. If damage claims arise later, you’ll need evidence of how inventory arrived.
Implement a phased migration to minimize risk
Transfer order volume in stages—not all at once. This three-phase approach lets you catch problems at low volume before they affect your entire customer base:
Phase 1: Pilot testing
Find integration issues and operational gaps before they hit your full customer base.
Route 5-10% of orders to your new 3PL (typically 1-2 weeks of volume)
Pick one sales channel or region—isolate variables
Track all KPIs against targets before expanding
Fix every issue that surfaces. This is the cheapest time to find problems.
Phase 2: Dual fulfillment
Running both 3PLs simultaneously protects your customer experience while you validate the new provider at scale.
Both 3PLs handle live orders—route by channel, region, or percentage split
Daily standups between your team and both providers. Problems surface fast; communication must be faster.
Keep backup capacity at your old 3PL until you’re confident. If the new provider stumbles, you can temporarily shift volume back.
Volume transfer
Increase volume only as performance holds. Transitioning too fast is the most common execution mistake.
Ramp from 10% → 25% → 50% → 75% → 100%, verifying KPIs at each stage
Pause immediately if error rates exceed your SLA threshold (e.g., accuracy drops below 99%)
Resolve every issue before adding more volume. Speed matters less than getting it right.
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. Document your fallback plan for each of these common transition failures:
Integration failures: Manual order entry process documented and tested. Who enters orders? Into which system? How do you avoid duplicates when integration resumes?
Inventory delays: Emergency replenishment contacts at your manufacturer or backup supplier. Know lead times and minimum order quantities before you need them.
Service degradation: Define hard triggers for pausing volume transfer (e.g., error rate exceeds 2%, shipping SLA drops below 95%). Don’t wait for gut feel.
Customer service backlogs: Pre-written response templates for “where’s my order,” “tracking not updating,” and “wrong item received.” Your CS team shouldn’t be improvising.
Transportation disruptions: Backup carrier accounts activated and tested. Know your expedited shipping options and costs before you need them.
Document these now. During a crisis, you won’t have time to figure it out.
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 operational details to maintain service levels and set accurate customer expectations. Document:
New workflows and system access: How do they check order status? Track inventory? Process returns? Provide login credentials and step-by-step guides before go-live.
Changed responsibilities: Who owns what during the transition? Who’s the escalation point for fulfillment issues?
Updated tracking and reporting: Where do reports come from now? What changes in format or timing?
New 3PL contacts: Name, email, phone, and role for everyone your team might need to reach. Not just the account manager—receiving, support, escalations.
Training schedule: When does training happen? Who attends? Is it recorded for team members who miss it?
Customers
Proactive communication reduces support tickets and prevents cancellations. Tell customers what’s changing before they notice something’s different:
Delivery timeline changes: If transit times may shift during transition, say so upfront. “Orders placed this week may take 1-2 additional days” beats angry “where’s my order” emails.
Tracking information: Will tracking links look different? Come from a different sender? Let customers know so they don’t think the email is spam.
Return procedures: New return address? Different process? Update your website and confirmation emails before the first customer tries to send something back.
Send a brief email to recent customers if changes are significant. For minor changes, update your order confirmation templates and FAQ page.
Suppliers
Inventory sent to the wrong warehouse during transition creates stockouts and delays. Send suppliers updated documentation before your cutover date:
New shipping addresses and receiving hours: Include dock appointment requirements if applicable. Wrong address = inventory in limbo.
Updated routing guides: Carrier preferences, freight forwarding instructions, pallet configuration requirements.
Documentation requirements: BOL format, PO references, labeling standards. Shipments rejected for documentation errors delay availability.
Transition dates: Exact date to start shipping to the new location. Build in buffer—better to have inventory arrive early than late.
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, special handling flags. Missing data causes shipping cost miscalculations and packing errors.
Accurate inventory counts: Reconciled counts, not stale data. Your new 3PL’s system is only as accurate as what you load into it.
Order history: Gives context for support inquiries and helps identify patterns during transition.
Customer shipping preferences: Saved addresses, delivery instructions, carrier preferences. Losing these creates friction for repeat customers.
Thoroughly test integration points:
Test orders through every sales channel: Shopify, Amazon, wholesale portal—each one separately. Don’t assume they’ll all behave the same.
Inventory sync in both directions: Sell a unit—does inventory decrement? Receive stock—does availability update? Test both flows.
Shipping label generation: Correct weight, dimensions, carrier, and service level? Address formatting accurate?
Order modifications: Cancel an order—does it stop fulfillment? Change shipping address—does the update push through?
Returns processing: Initiate a return—does the RMA flow work? Does inventory restock correctly?
Establish procedures for handling in-transit orders:
Backorders and pre-orders: Which 3PL fulfills orders placed before cutover but shipping after? Document the handoff to avoid orders falling through cracks.
Returns during transition: Returns will arrive at your old 3PL for weeks after you switch. Define the process: forward to new location? Process and credit in place?
Order status inquiries: During overlap, customer service needs to check two systems. Document which orders are where and how to look them up.
Get your team access to the new 3PL’s reporting tools during pilot phase—not after full cutover. Familiarity with the system before it’s critical reduces errors when it matters.
Phase 3: Optimize your new partnership
Make your 3PL switch pay off—starting in the first 90 days
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The transition is complete—now the real work begins. The first 60-90 days with your new 3PL determine whether you get the ROI you planned for or inherit a new set of problems. This phase is about holding your new provider accountable and building a partnership that improves over time.
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
Customers notice fulfillment changes before your dashboards do. Build systems to catch problems early:
WARNING: A spike in “received wrong item” or “package damaged” complaints signals systemic issues—not one-off mistakes. Set alert thresholds (e.g., 2x baseline) and escalate immediately when triggered.
Verify fulfillment quality through systematic testing
Data tells only part of the story. Direct observation catches quality issues that dashboards miss:
Mystery shopper program: Place test orders monthly across different SKUs and destinations. Evaluate packaging quality, accuracy, and transit time yourself.
Packaging audits: Request photos of packed orders weekly, or have samples of shipping materials sent to you. Is presentation consistent with your brand standards?
Unannounced facility visits: If geography allows, drop by without scheduling. What you see without warning is closer to reality than a planned tour.
Video walkthroughs: Request recorded picking, packing, and shipping processes. Look for shortcuts or inconsistencies that explain error patterns.
Returns inspection: When products come back, examine the packaging. Damage patterns reveal whether the problem is packing, carrier handling, or product design.
PRO TIP: Test your new 3PL’s responsiveness by occasionally placing rush orders or making special packaging requests. How they handle exceptions reveals their true service commitment better than routine operations ever will.
Build a continuous improvement partnership
The best 3PL relationships improve over time—they don’t just maintain. Build structures that drive continuous optimization, not just problem-solving:
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: Review KPIs vs. targets, discuss upcoming volume changes (promotions, new products, seasonal shifts), and identify process improvements. Come with an agenda—don’t let these become status updates.
Shared improvement projects: Pick one cost or service metric to improve together each quarter. Example: “Reduce average shipping cost by $0.30/order through box size optimization.
Growth planning: Loop in your 3PL 60-90 days before major changes—new sales channels, product launches, geographic expansion. Surprises create capacity problems.
Technology roadmap: What integrations or system improvements would help both sides? Build a 6-12 month plan with milestones.
Cost reduction initiatives: Set a shared annual target (e.g., 5% cost reduction). Your 3PL has visibility into inefficiencies you don’t—make it worth their time to surface them.
Formalize account management expectations
Service quality degrades over time without documented expectations. Lock these in early:
Primary and backup contacts: Who do you call for urgent issues? For billing questions? For technical problems? Get names and direct lines—not just a support queue.
Response time expectations: Urgent issues acknowledged within 2 hours, resolved within 24. Routine requests within 1 business day. Put it in writing.
Meeting cadence: Weekly ops calls during the first 90 days, then biweekly or monthly. Define required attendees on both sides.
Reporting schedule: What reports do you get? When? In what format? Automate delivery so you’re not chasing data.
Escalation procedures: If your account manager can’t resolve an issue in 48 hours, who’s next? Document the escalation chain.
Executive sponsor relationship: Know who the senior leader is on their side. You shouldn’t need them often, but when you do, you need direct access.
This structure ensures your account doesn’t get deprioritized as your 3PL takes on new clients.
Leverage your new 3PL’s expertise
Your 3PL sees operational patterns you don’t. Tap into their expertise beyond pick-and-pack:
Inventory management: Are you overstocked on slow movers? Understocked on fast sellers? Your 3PL has the data to recommend reorder points and safety stock levels.
Packaging optimization: Dimensional weight charges add up fast. Your 3PL can recommend box size changes that reduce shipping costs by 10-20%.
Carrier mix optimization: Which carriers perform best to which zones? Your 3PL’s volume gives them negotiating leverage and performance data you don’t have.
Demand forecasting: Historical order patterns, seasonality trends, promotion impact—your 3PL can help you plan inventory buys more accurately.
Returns optimization: How can you reduce return rates? Recapture more value from returned inventory? Process returns faster to get products back in stock? Your 3PL handles returns daily—use that insight.
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
A rigorous first 90 days transforms your 3PL switch from a one-time fix into a partnership that gets better over time—lower costs, fewer errors, and more capacity to grow.
Calculate what your current 3PL is really costing you
Every day with a problematic fulfillment partner drains your business in measurable ways:
Lost revenue: A missed shipping deadline doesn’t just delay one order—it kills repeat purchases and lifetime value.
Increased CAC: Replacing customers lost to fulfillment failures costs 5-7x more than retaining them.
Management overhead: Every hour spent chasing your 3PL is an hour not spent on growth. At $100+/hour fully loaded, that adds up fast.
Reputation damage: One “arrived damaged” or “wrong item” review offsets dozens of 5-star ratings. Recovery takes months.
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—financial penalties we pay when we miss, not just promises:
Same-day shipping: Orders received before cutoff ship the same day. Every time. Guaranteed.
100% order accuracy: We pay you for every picking or packing error—not just an apology, actual money back.
Zero inventory shrinkage: Full reimbursement for any lost or damaged inventory. Your products are covered from the moment they arrive.
These aren’t aspirational goals—they’re contractual obligations that put our money behind our performance.
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
The problems that drive most brands to switch 3PLs—errors, shrinkage, missed shipments—are the exact problems these guarantees eliminate.
See if we’re a good fit for your business
We’re selective—we don’t serve every business. Our fulfillment services work best for companies shipping heavy, bulky, or high-volume products. If that’s not you, we’re probably not the right fit.
Tell us about your fulfillment requirements. If Red Stag can deliver better results than your current 3PL, we’ll show you exactly how. If we’re not the right partner, we’ll tell you directly—and point you toward providers better suited to your needs.
